Kapferer (2008): Strategic Brand Management

Question 1

Overview of Brands

Answer 1

• Brands are everywhere in modern life, influencing economic, social, cultural, and personal
  spheres.
• As symbols of modern economies, brands have faced growing criticism but remain essential to
  strategic business management.

Question 2

What is a Brand?

Answer 2

• Customer-Based Definition:
• A set of mental associations adding to the perceived value of a product or service.
• Associations should be unique (exclusive), strong (memorable), and positive (desirable).
• Financial View:
• Brand equity reflects added financial value from consumer preference and loyalty, often
  quantified in terms of additional cash flow.

Question 3

Brand as an Asset

Answer 3

• Brands are intangible assets that require products or services as their foundation.
• Conditional Assets: Brands deliver value only when working alongside tangible assets (e.g.,
  production facilities).
• Legal definitions emphasize brands as identifiers and differentiators, protecting them against
  counterfeiting.

Question 4

Brand influence

Answer 4

• Brands influence consumer choices by:
• Acting as a trust signal
• Reducing perceived risk (economic, functional, psychological, or social)
• A strong brand builds loyalty and creates a long-lasting impact on consumer preferences

Question 5

Brand Equity and Measurement

Answer 5

• Brand Equity: The added value a brand contributes to a product, evaluated through awareness,
  loyalty, and financial indicators
• Measuring Brand Equity:
• Aaker’s Measures: Includes market share, distribution, and price premium
• Lethesser’s Definition: Brand equity combines customer behavior and channel dynamics to
  create greater margins and volumes

Question 6

Key Functions of Brands for Consumers

Answer 6

1. Identification: Simplifies product recognition
2. Practicality: Saves time and energy through loyalty
3. Guarantee: Ensures consistent quality
4. Optimisation: Confirms the best choice within a category
5. Badge: Reflect personal or social identity
6. Continuity: Builds trust through long-term familiarity
7. Hedonistic: Enhances enjoyment and experience
8. Ethical: Represents responsible and sustainable practices

Question 7

Brand Awareness:

Answer 7

• A collective phenomenon where awareness builds trust and reduces risk
• Correlates with positive attributes like quality, reliability, and accessibility but not necessarily
  innovation or style

Question 8

How Brands Create Value

Answer 8

• Brands reduce consumer anxiety by signalling quality and value
• Brand loyalty and trust enable higher price premiums and market resilience
• Functions vary by product type:
• Strong in high-risk categories like cosmetics, perfumes, and luxury goods
• Weaker in low-involvement categories like basic food staples

Question 9

The Brand System

Answer 9

• A brand operates as a living system integrating:
  1. Brand Concept (value proposition, both tangible and intangible).
  2. Brand Name and Symbols (semiotic elements).
  3. Product/Service Experience.

Question 10

Brand Equity and Value

Answer 10

• Key Drivers of Brand Equity:
• Brand awareness.
• Consumer loyalty and emotional attachment.
• Perceived exclusivity and quality.

Question 11

Brand assets

Answer 11

• Brand awareness
• Brand reputation
• Perceived brand personality
• Perceived brand values
• Reflected customer imagery
• Brand preference or attachment
• Patents and rights

Question 12

Brand strength

Answer 12

• Market share
• Market leadership
• Market penetration
• Share of requirements
• Growth rate
• Loyalty rate
• Price premium
• Percentage of products the trade cannot delist

Question 13

Brand value

Answer 13

• Net discounted cashflow attributable to the brand after paying the cost of capital invested to produce and run the business and the cost of marketing

Question 14

Functions of a Brand

Answer 14

• Brands create value for consumers through:
• Identification: Helps locate and recognize products quickly.
• Practicality: Saves time through brand loyalty.
• Guarantee: Ensures consistent quality.
• Optimisation: Indicates the best product in its category.
• Badge: Reflects consumer self-image and social identity.
• Continuity: Builds long-term trust and familiarity.
• Hedonistic: Adds emotional and experiential pleasure.
• Ethical: Reflects social responsibility and sustainability.

Question 15

Levers of Brand Profitability
- Key Elements:

Answer 15

• Corporate resources and investments (R&D, patents, marketing).
• Brand saliency and adaptation to market needs.
• Sustainable competitive advantages, including price premium and customer loyalty.

Question 16

How Brand Awareness Creates Value

Answer 16

• Brand awareness is correlated with valuable dimensions like trust, reliability, and quality.

Question 17

Brand Financial Valuation

Answer 17

• Strong brands provide higher financial stability and future cash flow.

Question 18

Brand Tracking Studies

Answer 18

• Tracking metrics include:
  ◦ Aided and unaided awareness.
  ◦ Evoked set (consideration in purchase decisions).
  ◦ Consumption patterns.