Module 2 Flashcards
(CBBE)
Customer-Based Brand Equity
Customer-Based Brand Equity
“The differential effect that brand knowledge has on consumer response to the marketing of that brand.”
Answers two main questions:
What makes a brand strong?
How do you build a strong brand?
CBBE answers these questions from the perspectives of the consumer – as an individual and as an organization.
When does a brand have POSITIVE CBBE?
When consumers react favorably to a product and the way it is marketed when the brand is identified - than when it is not identified.
When does a brand have NEGATIVE CBBE?
A brand has NEGATIVE CBBE if consumers react less favorably to marketing activity for the brand compared with an unnamed or fictitiously named version of the product.
There are 3 key “ingredients” to CBBE:
- Differential Effect
- Brand Knowledge
- Consumer Response to Marketing
Differential Effect
Differences in consumer response
Brand Knowledge
A result of consumers’ knowledge about the brand
Consumer Response to Marketing
perceptions, preferences, & behavior related to all aspects of brand marketing
Marketing Advantages Of Strong Brands
Improved perceptions of product performance
Greater loyalty
Less vulnerability to competitive marketing actions
Less vulnerability to marketing crises
Larger margins
More inelastic consumer response to price increases
More elastic consumer response to price decreases
Greater trade cooperation and support
Increased marketing communication effectiveness
Possible licensing opportunities
Additional brand extension opportunities
Consumer knowledge drives the differences that manifest themselves in terms of…
…brand equity.
Brand equity provides marketers with a vital strategic __ from their past to their future.
bridge
Brands as a Reflection of the Past
Marketers should consider all the dollars spent on manufacturing and marketing products each year not as “expenses” but rather as “investments” in what consumers learned, felt and experienced about the brand.
Quality of brand building is more important than quantity.
Brands as a Direction for the Future
Past results can be interpreted to design future marketing programs. The brand knowledge that marketers create over time dictates appropriate and inappropriate future directions for the brand.
Brand knowledge is the key to creating brand equity because…
…it creates the differential effect that drives brand equity.
Associative Network Memory Model
Views memory as a network of nodes and connecting links
Nodes
stored information & concepts
Links
associations between information or concepts
Brand knowledge has two components:
Brand Awareness
Brand Image
Brand Awareness
The strength of the brand “node” in memory.
The consumer’s ability to identify the brand under different conditions.
Brand Image
Consumer’s perceptions about a brand. It is reflected by the brand associations held in the consumer’ memory
Customer-based brand equity occurs when the consumer:
- Has high levels of awareness & familiarity with the brand.
- Holds strong, favorable & unique brand associations in memory.
In some cases (low involvement) brand awareness alone is enough to create…
…favorable consumer responses.
In other cases, however, the strength, favorability, and uniqueness of brand associations play a critical role in determining the differential response that makes up brand equity.
Brand Awareness consists of…
Brand Recognition
Brand Recall
Brand Recognition
consumer’s ability to confirm prior exposure to a brand when cued (eg: POP displays)
Brand Recall
consumer’s ability to retrieve the brand from memory when given the product category, the needs fulfilled by the category, or a purchase or usage situation as a cue (eg: services & online brands).
Advantages of Effective Brand Awareness
Learning Advantages
Consideration Advantages
Choice Advantages
Learning Advantages
Brand awareness influences the formation and strength of the associations that make up the brand image.
Registers the brand in the minds of consumers.
Consideration Advantages
Likelihood that the brand will be a member of the consideration set.
Consumers must consider the brand whenever they are making a purchase for which it could be acceptable or fulfilling a need it could satisfy.
Choice Advantages
Affects choices among brands in the consideration
set
- Consumer purchase motivation
- Consumer purchase ability
Creating brand awareness means…
…increasing the familiarity of the brand thru repeated exposure, this is generally more effective for brand recognition than for brand recall.
Repetition increases…
…recognizability.
Improving brand recall also requires…
…linkages in memory to right product categories or other purchase or consumption cues (eg: names, symbols, logos, packaging, etc)
The way marketers pair the brand with its product category, such as with an advertising slogan, helps determine…
…the strength of product category links. (eg: Ford cars)
Many marketers have attempted to create brand awareness through so-called…
…“shock advertising” with bizarre themes.
The problem with such “shock advertising” methods is that…
…they invariably fail to
create strong category links because the product is just not
prominent enough in the ad (eg: Outpost.com – came across as desperate with an unclear message).
Creating a positive brand image requires…
…strong, favorable, and unique brand associations.
Strength of brand associations is based on:
Personal Relevance
Consistency of Presentation
Consumers form beliefs about brand attributes and benefits in different ways called:
Brand attributes
Brand benefits
Brand attributes
descriptive features that are characteristic of a product or service.
Brand benefits
the personal value and meaning that consumers attach to the product or service attributes.
Company-influenced advtg creates the __ associations.
weakest
Direct experiences create the __ brand attribute and benefit associations.
strongest
Creative communications (instead of advtg) can be used to create…
…strong brand associations (eg: Starbucks, Google, Red Bull, etc)
To choose which favorable and unique associations to link to the brand, marketers carefully analyze the…
…consumer and the competition to determine the best positioning for the brand.
Favorable brand associations are those that are…
…desirable and deliverable to consumers.
Desirability depends on:
how (i) relevant (ii) distinctive, and (iii) believable consumers find the brand associations.
Deliverability depends on:
(i) the actual or potential ability of the product to perform
(ii) the current or future prospects of communicating that performance
(iii) the sustainability of the actual and communicated performance over time.
The essence of brand positioning is that the brand has a…
…sustainable competitive advantage or “unique selling proposition” that gives consumers a compelling reason to should buy it.
Within brand positioning, marketers can make this unique difference explicit through…
…direct comparisons with competitors, or they may highlight it implicitly.
Strong and unique associations are critical to…
…a brand’s success.
If the brand faces no competition, it will likely…
…share some associations with other brands.
The Body Shop Example
The Body Shop created a global brand image without using conventional advertising. Its strong association to personal care and environmental concern occurred through its products, packaging, merchandising, staff, sourcing policies, social action program, and public relations program and activities.
Building a Strong Brand: The Four Steps of Brand Building
IDENTITY
MEANING
RESPONSE
RELATIONSHIP
IDENTITY
Ensure identification of the brand with customers and an association of the brand in customers’ minds with a specific product class or customer need.
MEANING
tangible & intangible associations linked to certain product properties.
Firmly establish the totality of brand meaning in the minds of customers.
RESPONSE
consumer responds to brand identification and brand meaning as intended.
Elicit the proper customer responses to this brand identification and brand meaning.
RELATIONSHIP
convert brand response to create an intense, active loyalty relationship between customers and the brand.
Four main questions customers ask of brands, and how they relate to the four steps:
Who are you? (brand identity)
What are you? (brand meaning)
What about you? What do I think or feel about you? (brand responses)
What about you and me? What kind of association and how much of a connection would I like to have with you? (brand relationships)
Building blocks up the left side of the pyramid represent a more __ __ to brand building.
“rational route”
Building blocks up the right side of the pyramid represent a more __ __.
“emotional route.”
Most strong brands were built by going up which side of the pyramid?
Both sides.
Customer-Based Brand Equity Pyramid
Resonance
Judgments | Feelings
Performance | Imagery
Salience
Stages of Brand Development
Rational Route
- Identity: Who are you?
- Meaning: What are you?
- Response: What about you?
- Relationship: What about you and me?
Brand Objective at Each Stage (Emotional Route)
- Deep, broad brand awareness
- Points of parity and difference
- Positive, accessible reactions
- Intense, active loyalty
Salience
Category identification
Needs satisfied
Performance
Primary Characteristics and Secondary Features
Product Reliability, Durability, and Serviceability
Service Effectiveness,
Efficiency, and Empathy
Style and Design
Price
Imagery
User profiles
Purchase and Usage Situations
Personality And Values
History, Heritage, and Experiences
Judgments
Quality
Credibility
Consideration
Superiority
Feelings
Warmth
Fun
Excitement
Security
Social Approval
Self Respect
Resonance
Loyalty
Attachment
Community
Engagement
Achieving the right brand identity means creating __ __ with customers.
brand salience
Brand Salience
measures awareness of the brand - how often and how easily the brand is evoked under various situations or circumstances.
Depth of brand awareness
Measures how likely it is for a brand element to come to mind, and the ease with which it does so. A brand we easily recall has a deeper level of brand awareness than one that we recognize only when we see it.
Ease of recognition and recall
Strength and clarity of category membership
Breadth of brand awareness
Measures the range of purchase and usage situations in which the brand element comes to mind and depends to a large extent on the organization of brand and product knowledge in memory.
Usage consideration
Purchase consideration
Tropicana Example
Marketers at Tropicana want its consumers to at least recognize the brand when it is presented to them. Beyond that, they should think of Tropicana whenever they think of orange juice, particularly when they are considering buying orange juice. Ideally, consumers would think of Tropicana whenever they were deciding which type of beverage to drink, especially when seeking a “tasty but healthy” beverage…
To fully understand brand recall, we need to appreciate…
…product category structure.
product category structure
how product categories are organized in memory.
It is usually easier to __ consumers of existing brand attitudes than it is to __ them.
remind, change
ex: Campbell’s Soup
Brand Performance
Describes how well the product or service meets customers’ functional needs.
Transcends the products ingredients and features to include dimensions that differentiate the brand.
5 important types of attributes often correlate to brand performance
Primary characteristics and supplementary features
Product reliability, durability, and serviceability
Service effectiveness, efficiency, and empathy
Style and design
Price
Customer Performance Perception
Reliability
Durability
Serviceability
Customer Performance Perception leads to…
…performance-related associations with service
Performance-Related Associations
Service Effectiveness
Service Efficiency
Service Empathy
Brand Imagery
Reflects the customer’s abstract view of the brand.
How does the brand meet the customer’s psychological or social needs?
Brand Imagery: Intangible Brand Links
1) User Profiles (Demographics & Psychographics)
2) Purchase and usage situations (Store, Time, Usage Context)
3) Personality & Values (Sincerity, Excitement, Ruggedness, etc.)
4) History, Heritage, and Experiences (Nostalgia, Memories)
One set of brand imagery associations is about the type of person or organization who uses the brand. This imagery may result in customers’…
…mental image of actual users or more aspirational, idealized users.
Within brand imagery, demographic factors might include the following:
- Gender
- Age
- Race
- Income
Brand Judgments
Customers’ personal opinions and evaluations of the brand, which consumers form by putting together all the different brand performance
and imagery associations.
4 typical brand judgments made by consumers.
- Brand Quality
- Brand Credibility
- Brand Consideration
- Brand Superiority
Brand attitudes are…
Brand Quality is…
…consumers’ overall evaluations of a brand & form the basis for brand choice.
…perceived quality, value & satisfaction measures are inherent in many approaches to brand equity.
Brand Credibility
Brand credibility describes the extent to which customers see the brand as credible in terms of 3 dimensions:
- Expertise
- Trustworthiness
- Likeability
Brand Consideration
Consideration depends in part on how personally relevant customers find the brand & is a crucial filter in terms of building brand equity.
-Relevance
Brand Superiority
Superiority measures the extent to which customers view the brand as unique & better than other brands. Critical to building intense and active relationships with customers.
-Differentiation
Brand Feelings
Customers’ emotional responses and reactions to a brand. Also relates to the social currency evoked by the brand.
Six Important Types Of Brand-Building Feelings
Warmth Fun Excitement Security Social approval Self-respect
Warmth
The brand evokes soothing type of feeling and makes consumers feel a sense of calm or peacefulness.
Fun
Upbeat types of feelings makes consumers feel amused, lighthearted, joyous, playful, cheerful, etc.
Excitement
The brand makes consumers feel energized and that they are experiencing something special.
Security
The brand produces a feeling of safety, comfort, and self-assurance.
Social approval
Consumers feel that others look favorable on their appearance, behavior, etc.
Self-respect
The brand makes consumers feel better about themselves; consumers feel a sense of pride, accomplishment, or fulfillment.
The 10 Commandments of Emotional Branding
- From Consumers to People
- Consumers buy. People live. - From Product to Experience
- Products fulfill needs. Experiences fulfill desires. - From Honesty to Trust
- Honesty is expected. Trust is engaging and intimate. It needs to be earned. - From Quality to Preference
- Quality is a given. Preference creates the sale. - From Notoriety To Aspiration
- Being known does not mean that are also loved. - From Identification to Personality
- Identity is recognition. Personality is about character and charisma. - From Function To Feel
- Function is about practical qualities. Sensorial design is about experiences. - From Ubiquity To Presence
- Ubiquity is seen. Presence is felt. - From Communication To Dialogue
- Communication is selling. Dialogue is sharing. - From Service To Relationship
- Service is selling. Dialogue is sharing.
Hallmark Example
Hallmark has tapped into consumer emotion to create a wide-ranging business. Since 1994, the company’s slogan that appears on the back of every greeting card, “When you care enough to send the very best.”
Brand Resonance
The ultimate relationship & level of identification a consumer has with the brand
2 dimensions of resonance are:
Intensity
Activity
Intensity
(strength of attachment/psychological bond to the brand)
Activity
(how frequently the brand is used)
Dimensions Of Brand Resonance
Behavioral Loyalty
Attitudinal Attachment
Sense of Community
Active Engagement
Behavioral Loyalty
brand’s share of category volume
Attitudinal Attachment
customers view brand as something special
Sense of Community
sense of kinship with fellow customers or the company
Active Engagement
customer is willing to invest time, energy, and money into the brand
Harley Davidson Example
Harley Davidson is an example of a brand with high resonance. The world-famous motorcycle company sponsors the Harley Owners Group (HOG), which by 2005
had 900,000 members in chapter groups all over the world sharing a very simple mission, “To Ride and Have Fun.”
Brand-Building Implications
The CBBE model reinforces a number of important branding tenets, five of which are particularly noteworthy:
Customer’s Own Brand
Don’t Take Shortcuts With Brands
Brands Should Have A Duality
Brand Should Have Richness
Brand Resonance Provides Important Focus
Customer’s Own Brand
The power of the brand and its ultimate value to the firm lies with customers
Don’t Take Shortcuts With Brands
The time to build a strong brand will therefore be directly proportional to the time it takes to create sufficient awareness and understanding so that firmly held and felt beliefs and attitudes about the brand are formed that can serve as the foundation for brand equity
Brands Should Have A Duality
Strong brands blend product performance and imagery to create a rich, varied, but complementary set of consumer responses to the brand
Brand Should Have Richness
The level of detail in the CBBE model highlights the number of possible ways to create meaning with consumers and the range of possible avenues to elicit consumer responses. Collectively, these various aspects of brand meaning and the resulting responses produce strong consumer bonds to the brand
Brand Resonance Provides Important Focus
Brand resonance is the pinnacle of CBBE model and provides important focus and priority for decision making and marketing
Weldbond Adhesives Example
With claims that it “bonds almost anything!” the marketers of Weldbond Adhesives decided to put their product to the test.
For a one-year period, they ran a contest, “You Glued What?” that asked customers to submit their most outrageous product applications.
Demonstrating the product’s versatility and inspiring creativity in use, winning entries appeared in photos and stores on hangtags attached to the product’s packaging for all to see.
What is the foundation of brand resonance and building a strong brand?
Customer-brand relationships
The customer-based brand equity model certainly places this notion at the forefront:
Making it clear that the power of a brand resides in the minds of customers.
Customer Relationship Management (CRM)
Uses a company’s data systems and applications to track consumer activity and manage customer interactions with the company.
Customer Equity
The sum of lifetime values of all customers.
Customer lifetime value (CLV) is affected by revenue and by the cost of customer acquisition, retention, and cross-selling
Customer Equity consists of three components:
Value equity
Brand equity
Relationship equity
Blattberg and Deighton (1996) offer eight guidelines as a means of maximizing customer equity:
Invest in highest-value customers first.
Transform product management into customer management.
Consider how add-on sales and cross-selling can increase customer equity.
Look for ways to reduce acquisition costs.
Track customer equity gains and losses against marketing programs.
Relate branding to customer equity.
Monitor the intrinsic retainability of your customer.
Consider writing separate marketing plans—or even building two marketing organizations—for acquisition and retention efforts.
Customers drive the success of brands, but brands are the necessary __ that firms have to connect with their customers.
touch-point
CBBE maintains that brands create value by…
…eliciting differential customer responses to marketing activities.
Customers need and value brands, but a brand is ultimately only as good as…
…the customers it attracts.
Retailers serve as the __ between firms and consumers.
“middleman”
Both retailers and manufacturers create brand portfolios to…
…attract the most profitable customer portfolio.
