Class 3

Question 1

Brand Equity

Answer 1

• Brand equity is created by brand awareness and brand image
• Brand awareness is whether people remember the brand
• Brand image is the associations they have with the brand
• Brand awareness can be further distinguished between brand recognition (walking the aisles) and brand recall (thinking about the product before entering the store)
• When using brand recognition, consumers are more likely to buy and remember unfamiliar products
• When using brand recall, consumers are more likely to buy and remember familiar products

Question 2

Positive associations

Answer 2

• Companies should try to build positive associations with their brands by highlighting positive attributes of their product
• Reinforcement will automatically shut-down negative associations
• Therefore companies should never remind consumers that their brand is not related to negative attributes
• Halo-Effect: customer’s favoritism towards products due to positive experiences with other products by this maker; people extrapolate positive characteristics to unrelated domains

Question 3

Branding situations

Answer 3

• Companies should include positive images together (not sequentially) with the brand/product (Coca-cola’s happiness campaign)
• Putting the brand/product together with a positive image creates an affective reaction in the mind of consumers who cannot figure out whether the positive
  affect comes from the product/brand or the positive image
• Companies should show the brand together with the product endorser. The affection people feel towards the endorser will transfer to the brand (if the endorser changes behavior it will not affect the brand)

Question 4

Consumer-Participation

Answer 4

• Empowering consumers to participate in the production process is a very good strategy (the ikea effect)
• It is only not a good for luxury products. For luxury products we don’t want ourselves or other customers to make the product but experts instead
• Christoph Fuchs finds that asking consumers to help the production of the product increases intention to
  purchase and willingness to pay by 50%

Question 5

Priming

Answer 5

• Priming (unconscious activation of ideas) has a strong influence on consumers. People are much influenced by what was just activated in their minds
• If this activation is nonconscious, people cannot avoid it because they are missing mechanisms to counteract its influence
• Companies should try to activate the brand unobtrusively by embedding the brand in
  movies, video games, shows

Question 6

Consumers attention

Answer 6

• There are 4 strategies that companies use to get consumers attention (humor, threats, music and sex)
• Music is more complex than the other stimuli
  (it’s more difficult to process). But it may have stronger effects. This is because its effects can occur even unconsciously (negatively and positively)
• Sex and violence shouldn’t be used in ads and commercials. Most people are against the objectification of bodies in ads. Sexual stimuli also makes less likely to remember the brand and disrupts their thinking