Bm 8 brand equity & management

“ We can, We will ”
Brand Management 8
Brand Equity & its management
Shim, Jae hak

Cold Call
2015-04-13 Shim, Jaehak (jaehak_shim@cambridgejbs.net) 2
Brand platform?
Brand Identity?
Brand Essence?

Contents
Concept of the Brand Equity
1
2
CBBE Management over time3
2015-04-13 Shim, Jaehak (jaehak_shim@cambridgejbs.net)
What we will discuss and achieve today ?
3
Customer Based Brand Equity
Brand Name & Brand Extension4

Brand Equity
“A set of associations and behaviors on the part of a brands
customers, channel members, and parent corporation that
permits the brand earn greater volume or greater margins than it
could without the brand name and that gives the brand a strong,
sustainable, and differentiated advantage over competitors”
(Marketing Science Institute,1989)

Definition of
Brand Equity
“Brand Equity is the set of brand assets and liabilities linked to a
brand that add or subtract from brand value”
(David A. Aaker)
“a set of memories in the extended minds of a brand's customers,
distribution channel members, parent company, and other key
members of its network that will impact future cash-flow. Memory
is here used in the sense of both what we have learned about how
to do things e.g. habits and behaviors, and things we remember
e.g. prior experience with the brand.”
(Srivastava and Shocker, 1991)

Practical meaning
of Brand Equity
2015-04-13
Shim, Jaehak (jaehak_shim@cambridgejbs.net)
6
http://www.revenuestrategy.com/Brand.htm

Tell me

Drivers of
Brand Equity
• Enduring
preference
• Sponsorships,
admired people
using the product,
corporatecitizenship
• Seen as better /
best fit for me
(functionality,
trust, long
lasting)
• Share of mind
Brand
Awareness
Perceived
Quality
Brand
Loyalty
Positive
Associations
Brand
Equity
Other Assets
• Trade marks, exclusive
channels,
merchandising systems

4 Major Dimensions
 Brand Awareness
 An often undervalued asset
 Has been shown to affect perceptions and even taste.
 People like the familiar and are prepared to ascribe all sorts of
good attitudes to items that are familiar to them.
 Which one ???
• TOM
• Aided Awareness
• Un Aided Awareness
 The ‘Intel Inside’ campaign
• Dramatically transferred awareness
into perceptions of technological
superiority and market acceptance.

4 Major Dimensions
 Perceived quality
 Special type of association
 Influences brand associations in many contexts
 Empirically shows to affect profitability (as measured by both
ROI and stock return)
 Brand loyalty
 The heart of any brand’s value

4 Major Dimensions
 Brand associations
 Anything that connects the customer to the brand.
 Such as user imagery, product attributes, use situations,
organizational associations, brand personality and symbols.
 Much of brand management involves determining what
associations to develop and then creating programs that will link
the associations to the brand.

Brand Association
 Anything which is deep seated in customer’s mind about
the brand
 Not benefits, but are images and symbols associated
with a brand or a brand benefit.

Component of
Brand Association
Strength
Uniqueness
Favorability
 Strength of B.A.
: Extensiveness or depth of
information processing relevant to
a brand
 Personal relevance
 Consistency over time
 Favorability of B.A.
: Extent of positive image and
capability of satisfying
consumers’ needs
 Uniqueness of B.A.
: Image not shared with
competing brands

How to form
 Quality of the product
 Product class/category to which the brand belongs;
 Price at which the brand is sold
 POP ( Point of purchase) displays; etc
 Advertisements
 Celebrity/big entity association
 Word of mouth publicity;
 Customers contact with the organization and it’s employees
 Products and schemes offered by competitors;

Brand Association
Networks
 Process starts by understanding how brand is currently
perceived
IMAGE
2015-04-13 16Shim, Jaehak (jaehak_shim@cambridgejbs.net)

Customer-based
Brand Equity (CBBE)
 The added value by a brand to the physical product or
service as perceived by customers
“ Customer-based brand equity is defined as the differential effect
of brand knowledge on consumer response to the marketing of
the brand” (Keller 1993)

Powerful Brand
in CBBE Model
Powerful
Brand
1
2
3
4
Establish proper
Brand Identity
Create the appropriate
Brand Meaning
Elicit the right
Brand Responses
Forge appropriate
Brand Relationship

Practical Example
Case of C.R.M.
 Quantitative research every month to track the trends
and bottle neck
 Development marketing activities focus on bottle neck
2015-04-13
All Target LoyalRegularRepertoireTrialConsiderationAwareness
19Shim, Jaehak (jaehak_shim@cambridgejbs.net)
• C.D.M. (Consumer Disposition Funnels)

The iconic bike design
The unparalleled performance engine
The unique low-slung ride
The legendary rallies
Harley Davidson Assets
Slides containing imagery/reference to other brands are not to
be used externally, not to be printed or downloaded

Driver Analysis & Communication Objectives
DRIVER
ANALYSIS
What’s the
problem?
OBJECTIVE
What must the
communication
do?
Visibility
Aware/
Consider
Trial/
Repertoire
Regular/
Loyalty
Repertoire Regular Loyal
CDF Analysis
Old
fashioned.
Old
technology
Few
opportunities
to ride.
Not for
everyday
transport.
Impractical.
Expensive.
Just a bike.
Create
desire and
stand out
Boast
classic
performance
creds
Invite them to
belong to a
community
Indulge your
dreams.
Own the
legend.
Extension of
personality.
Provide
finance.
Community.
Personalise,
Add value.
ASSETS/BENEFI
TS
What aspects of
the brand should
we leverage?
The bike The engine The experience
ATL, www,
DM,
Dealership
POP
Dealerships,
Custom
options, HD
Merch.,
H.O.G.®
H.O.G.® ,
www,
Accessories
HD Merch
“ My funnel issue is…
My bottle neck is …
Therefore I must …
By leveraging…”

Driver Analysis & Communication Objectives
DRIVER
ANALYSIS
What’s the
problem?
OBJECTIVE
What must the
communication do?
Low
Visibility
Aware/
Consider
Trial/
Repertoire
Regular/
Loyalty
Repertoire Regular LoyalCDF Analysis
Old
fashioned.
Old
technology
Few
opportunities
to ride.
Impractical.
Expensive.
Just a bike.
Create
desire and
stand out
ASSETS/BENEFITS
What aspects of the
brand should we
leverage?
The bike
Boast
classic
performance
creds
The engine
Invite them to
belong to a
community
The
experience
Not for
everyday
transport.
Indulge your
dreams.
Own the
legend.
ATL, www,
DM,
Dealership
POP
Extension of
personality.
Provide
finance.
Dealerships,
Custom
options, HD
Merch.,
H.O.G.®
Community.
Personalise,
Add value.
H.O.G.® ,
www,
Accessories
HD Merch

Harley Davidson Assets
2015-04-13 23Shim, Jaehak (jaehak_shim@cambridgejbs.net)

Managing CBEE
Over Time
Reinforcingbrands
Brand Vision
RevitalizingBrands
Managing
theBrandPortfolio

 Objectives
 Retain an appropriate range of brands to meet differentiation objectives
 Managing the brand portfolio to meet customers’ needs and preferences
as they change over time
 Multi-brand portfolio allows
 Greater market coverage (as new segments emerge)
 Increase customer relevance : right brand targeting right customer
 Sustaining & building market size
 Tactical flexibility
 Careful consideration on
 Retailer / manufacturing concentration & cost increase
 Marketing budget
 Retiring brands should be considered when
 Brand has attained unchangeable negative associations
 Source of uniqueness has dried up
Managing CBEE Over Time
Portfolio Management

 Quantified Portfolio
Analysis [QPAⓒ]
 To guide strategic
investment priorities by
market, business unit,
channel or brand because a
quantified process
 To helps set priorities
objectively by using a
common scoring system
across markets and
countries

 Management for Both of
 Portfolio Width : Number of brands across product categories
 Portfolio Depth : Number of brands within a product category

Low end entry point for customers
Scale economies in marketing activities
Increase shelf presence & retailer dependence
Cash cows milked for profit
Flanker for flagship brands
Cater for new segment
High end prestige brand to lend credibility
Brand
Portfolio
Brand
Portfolio

Brand Hierarchy
 Ordering of brands according to a logical
organization of ‘ brand attributes and values’
 Layers
 Corporate Brand
• Signal product’s pedigree
• Easy to be protected legally
 Family Brand
• Used as an umbrella
• Endorse individual brand value & characteristics
 Individual brand
• Restricted to one product category
 Modifier
• Used to designated a specific model or capability

NIVEA Sun
Caring Lotion
SPF 50
Brand Hierarchy
Corporate Brand
Family Brand
Individual Brand
Modifier
32

Brand Relationships
within a Portfolio
 Single brand across organization
 These brands use a single name across all their activities
 Examples include Virgin, Red Cross
 Known to all their stakeholders – consumers, employees, shareholders, partners,
suppliers and other parties.
 Endorsed brands
 The endorsement of a parent brand should add credibility to the endorsed brand
in the eyes of consumers.
 Like Nestle’s KitKat, Sony Playstation or Polo by Ralph Lauren
 This strategy also allows companies who operate in many categories to
differentiate their different product groups’ positioning
 House of brands
 The individual sub-brands are offered to consumers, and the parent
brand gets little or no prominence
 Like Procter & Gamble’s Pampers or Unilever’s Persil.
 Other stakeholders, like shareholders or partners, know the company by
its parent brand

Brand Relationships
within a Portfolio

 Migration strategies
 Provide a clear path for customers to follow within the brand
franchise (e.g., BMW’s sequential numbering of models versus
Renault’s individual names)
 Potential pitfall: attempting to cater for too diverse values and
lifestyles
 Retreat and Refocus
 As brands decline, return to the die-hard consumers, wind back
brand variations, use targeted media (e.g., Lux, West Coast Wine
Coolers)
 Retiring Brands
 Brand has attained unchangeable negative
associations
 Source of uniqueness has dried up

Managing CBEE
Over Time
 Simply
 Retire it from Market
 Fade out After milking more
 Revitalize
 Reposition

 New brand built for new product
 Brand Extension
 Leverage an existing brand
 Use combination of existing & new brand

Ansoff Matrix
 The Ansoff Product-Market Growth Matrix (1957, Ansoff,)
 Product strategy for diversification
 Two variables in strategic marketing decision
• The market in which the firm was going to operate
• The product intended for sale
 Two options for marketer
• Remain in the existing market
• Enter new ones

 Maintain consistency in brand image over time
 Require tactical adjustment to change with customer perceptions
and competitive activity
 Fortify brands through
 Maintaining relevance if associations are
symbolic or experiential
 Innovation if brand associations are functional
 Careful at repositioning
 More challengeable than positioning
 Sometimes only result in diluting
the original positioning

 The need to revitalize : the result of consumer neglect
 Prospects for revival
 Is there residual goodwill among customers and distributors?
 Is there a group of loyal customers with potential for growth?
 Is it the brand or company which is responsible for the decline?
 Revitalization should only be pursue where strong,
favorable and unique brand association remain
 Method
 Increase usage frequency / breadth of usage
situation
 Improve brand image through reposition or change
brand elements

Continuously
Brand Evolution
 Brand must evolve, Even the logo evolves

Brand Equity Case
- PEPSI

The first face of BI
Brand Name
 One of the most powerful forces in branding
 Ambassador of the company
 First impression to consumer
 Words project both meaning and feeling
 Strategically sound : Communicate in a way to fit brand strategy
 Linguistic appealing : Roll off the tongue across languages
 Must consider the globalization
 Legal issues (Trade mark)
 Linguistic & Cultural value
Ex) Resxona (Unilever) : The world’s largest deodorant brand
• Degree in US / Sure in UK
• Shield in South Africa
• Rexena in some Asian countries
Nova

Can you sell the
in English Countries?
From Japan From Korea

Language
(Chevrolet case)
 Nova (English Dictionary)
a star suddenly increasing in
brightness and then slowly returning to
normal. , ORIGIN Latin, from novus
‘new’ (because such stars were
thought to be newly formed)
 Nova (Spanish Dictionary)
• No : adverbio (como respuesta) no;
(modificando adverbios, oraciones,
verbos) not
• Va : vdrbo (trasladarse, desplazarse)
to go;

The process of
Naming
Creative Mock-ups
Globalization possibility
Legal concerns : Trade Mark
Name conceptualization
Analytical Survey of the market
Positioning
Final Deliverable
48

+) Most defensible in media coverage
Rational business discussion
-) Can be constraining for future aspirations
(Expand to different industry)
+) Immediately differentiated
Easily registered
-) Substantial investment in communication
Limited application
+) Often more memorable and admirable
-) More time and huge budget required
Spectrum for generating
Brand Naming
Descriptive
Names
Associative
Names
Abstract
Names
Shoe Market
Ford Mondeo
49

Strategic Options
 Tendency of following endorsement option, expecting
 Halo effect association in closed communication environment
 Short ROI under shortened product life cycle
 To enable efficient customer relationship focused marketing
 But…
Target Audience
Product Life Stages
Budget & Risk
Strategic Opportunities
(Over brand)
Endorsement
Strategy
Free standing
Brand Strategy
51

The importance of Fit
 Customers’ perception that the brand extension ‘makes
sense’
 Compatible functional benefits
 Compatible brand image
 Perceived fit is dependent on customer expertise
(level of technical knowledge)
 Low expertise usage situation must be complementary
 High expertise company must have technical expertise
 Plan brand extensions based on ‘Similarity of Customers’
not ‘Similarity of Products’
 Require Comprehensive assessment of the market’s
perceptions of brand associations

Brand Extensions
 Vertical Extension
 Extending the brand ‘up’ or
‘down’ the value spectrum
 Horizontal extensions
 Extending the brand within
its current value position

Key Questions in
Brand Extension
 How does a band extension leverage the equity in the
parent brand ?
 How effectively does the extension contribute to the
equity in the parent brand ?
Most importantly, ‘How consumer think ?’

Scope of
Brand Extension
 Optimum level of extension
Focal Brand
Performance ($)
Number of
Brand Extension
Overstretched
Extension
can revitalize
the brand
56

Brand Extensions
 Reduce risk perceived by customers
 Permits consumer variety seeking
 Increase relevance of brand to new
markets (segmentation)
 Increase probability of getting
distribution &trial
 Increase efficiency of promotional
expenditures
 Reduce costs of introduction &
developing new brand
 Increase pricing breadth
 Enhance parent brand image
 Revitalize parent brand
 Confuse customers (weaker
line logic)
 May lead to retailer resistance
 Both success and failure can
hurt parent brand’s image
 Cannibalize parent brand’s
sales
 Don’t always build category
demand
 May dilute a brand’s meaning
 Increased direct costs
 Opportunity cost of developing
a new brand
+ Advantage Disadvantage --
57

Wrap-up
 Brand equity is set of brand assets and liabilities linked to a
brand that add or subtract from brand value
 Customer Based Brand Equity
 Management CBBE over time
 Growth
 Brand Portfolio
 Migration
 Retiring

Bm 8 brand equity & management

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