Session 13 MG 220 Marketing Management MBA 10

1. Part 4: Building Strong Brands > What is Brand Equity? > Building Brand Equity > Measuring Brand Equity > Discussion on Assignment > Discussion on Term Project Class Presentation | Session 14 | 5 Oct 2010

2. BRANDS!!!!ALL AROUND US…. Class Discussion on what brands are: MG 220 Marketing Management 2

3. What is Brand EquityDefining Brands & Role of Brands What is a brand? AMA definition: “a name, term, sign, symbol ,or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors” Brands identify source Consumer identify products through brands as to which satisfy their needs and which don’t For Companies: Brands simplify product handling | inventory management Legal Protection Brands signal a certain level of quality => predictability of demand for firm Competitors can duplicate manufacturing process, but cannot match impressions created from years of marketing MG 220 Marketing Management 3

4. What is Brand EquityThe scope of Branding Branding is all about creating differences. To brand a product, it is necessary to teach consumers: Who the product is What the product does Why consumers should care Consumers must be convinced that there are meaningful differences among products in a category Branding can be applied virtually anywhere where there is choice. Consider branding: Goods Services Stores Person Place Organization Ideas and so on… MG 220 Marketing Management 4

5. What is Brand EquityDefining Brand Equity Brand Equity is added value endowed to product or service Most important is to see what the brand is for customers Thus the concept of Customer-based brand equity: Differential effect that brand knowledge has on consumer response to the marketing of that brand It can be either positive or negative based on customers reaction Three key components of brand equity: Differences in customer response Brand Knowledge Perceptions, preferences and behavior related Brand Equity as a Bridge Marketing investments in brand-building need to be carefully evaluated Brand knowledge created in this process acts dictates future direction of brand MG 220 Marketing Management 5

6. What is Brand EquityBrand Equity Models 1. Brand Asset Valuator (BAV) Developed by Young & Rubicam (Y&R) ad agency Four key pillars of brand equity: Differentiation (how much it is seen different from others) Relevance (breadth of brand’s appeal) Esteem (respect) Knowledge (familiarity of consumers) Differentiation & Relevance: Brand Strength – the future direction Esteem & Knowledge: Brand Stature – report of past performance A power grid is formed to identify brand development New brands (low on all DREK) Strong New brands (high on D than R, but low on EK) Leadership brands (high on all DREK) Declining brands (K highest, then E and low DR) Some examples for BAV model from local brands MG 220 Marketing Management 6

7. What is Brand EquityBrand Equity Models 2. Aaker Model Developed by David Aaker Five key categories of brand asset (or liability) are: Brand Loyalty Brand Awareness Perceived Quality Brand Associations Proprietary assets Brand identity is key to building brand equity. Its 4 perspectives are: Brand as product (prod scope, attributes, quality, uses, users, country of origin) Brand as organization (org. attributes, local vs global) Brand as person (brand personality, brand-customer relationships) Brand as symbol (visual imagery/metaphors and brand heritage) Brand identity includes: Core identity – central, timeless essence of brand Extended identity - combination of various brand identity elements organized into meaningful, cohesive groups Some examples for Aaker model MG 220 Marketing Management 7

8. What is Brand EquityBrand Equity Models 3. BRANDZ Developed by Market Research consultants Millward Brown and WPP Brand building is a process of sequential steps each completed after the other: Presence – Do I know about it? Relevance – Does it offer me something? Performance – Can it deliver? Advantage – Does it offer something different than others? Bonding – Nothing else beats it Bonded consumers are loyal and spend more but are less in numbers 4. BRAND RESONANCE Also in sequential steps Identity: Ensuring brand’s identification with specific product/category Meaning: Firmly establishing totality of brand meaning in minds Response: eliciting proper customer response Relationships: converting responses into relationships Brand building blocks: Brand salience (how often and easily brand is though about in purchase) Brand performance (how brand meets customer needs) Brand imagery (how brand meets psych. and social needs) Brand judgments (consumer’s own personal opinion and judgments) Brand feelings (customer’s emotional responses and reaction) Brand resonance (extent to which customers are in synch) MG 220 Marketing Management 8

9. What is Brand EquityBrand Equity Models Brand resonance pyramid helps identify psychological bond consumers have with the brand MG 220 Marketing Management 9

10. What is Brand EquityBuilding Brand Equity Process of building brand equity is: Initial choices for brand elements or identities that make a brand Product and services and all accompanying marketing activities and supporting marketing programs Other associations by linking it to some other entity 1. Choosing Brand Elements Trademark elements which are used to identify and differentiate brand Brand element choice criteria Developing Brand Elements – through strong research and understanding of consumer preferences and perceptions MG 220 Marketing Management 10

11. What is Brand EquityBuilding Brand Equity 2. Developing Holistic Marketing Activities Brands are not built by advertising alone Range of contacts and touchpoints are used Brand contact is an information-bearing experience a customer or prospect has with the brand, the product category or the market that relates to the marketer’s product or services Three important themes in marketing activities for brand development are: Personalization Making it as relevant to consumers Integration Mixing and matching marketing activities Brand awareness is consumers’ ability to identify brand under different circumstances Brand image is perception and belief held by consumer as reflected in associations held in memory Internalization Ensuring that employees also ‘live the brand’ B2E – Business to Employees MG 220 Marketing Management 11

12. What is Brand EquityBuilding Brand Equity 3. Leveraging Secondary Associations Brands associations may be linked further to other entities having their own associations thus creating ‘secondary associations’ This is an important way of building brand equity by ‘borrowing it’ MG 220 Marketing Management 12

13. What is Brand EquityMeasuring Brand Equity Indirect approach – assessing potential sources of brand equity by identifying consumer’s brand knowledge structures Direct approach – actual impact of brand knowledge on consumer’s response to different aspect of marketing Important for marketers: Identify sources of brand equity – Brand audits How these sources and outcomes change, if at all over time – Brand tracking Brand audits Consumer-focused exercise Involving series of procedures to assess health of brand and uncover its sources of brand equity and suggest ways to improve and leverage its equity Brand tracking Information collection to understand the performance of brands Generally use quantitative measures Brand Valuation Putting a financial value to brand May even be shown in balance sheet! MG 220 Marketing Management 13

14. Part 4: Building Strong Brands > Managing Brand Equity > Devising a Branding Strategy > Developing & Communicating a Positioning Strategy > Differentiation Strategies > Product Life-Cycle Marketing Strategies > Quiz 4 (Part 3: Chap 7 & 8) Class Presentation | Session 14 | 7 Oct 2010