SU 3: Brand Equity And Brand Value Chain

Question 1

Define brand equity

Answer 1

Brand equity is added value given by the brand to the product

Question 2

What are the different brand equity perspectives

Answer 2

• employee based: the differential effect that brand knowledge has on an employees response to their work environment
• customer based: the differential effect of brand knowledge on customer response to the marketing of the brand
• financial based: the total value of a brand which is a separate acid when it is sold or included in a balance sheet

Question 3

What are the benefits of the employee-based brand equity perspective

Answer 3

• brand citizenship behavior: which refers to voluntary actions taken by employees that promote and enhance the reputation of the organizations brand
• employee satisfaction: EBBE can foster a positive work culture which can lead to higher jobs satisfaction and better employee retention
• employee intention to stay (allegiance): EBBE can increase employees commitment to the organization leading to a greater intention to stay with the company

Question 4

What are the brand equity dimensions/models

Answer 4

• brand awareness
• brand association
• brand loyalty
• perceived quality
• other propriety

Question 5

Define brand awareness

Answer 5

A buyers capacity to recognize or recall the brand within the category with sufficient details to facilitate a purchase

Question 6

What are the two outcomes of brand awareness

Answer 6

Brand recognition and brand recall

Question 7

What are the degrees of awareness that the brand awareness pyramidic depicts

Answer 7

• top of mind awareness: this is the brand that buyers think of first among other brands, for example when you think of cereal the first thing that comes to mind is Kellogg’s
• brand recall: the ability to remember a brand without any external prompts or assistance also known as unaided recall (a person remembers the brand when prompted with the product category such as peanut butter, you think of Black Cat)
• brand recognition: the level at which brand recognition reappears after aided recall.
• unaware of the brand: consumers have no knowledge or awareness of a specific brand

Question 8

Indicate the four ways in which brand awareness adds value

Answer 8

• anchor: acts as a hook for other associations
• preference: customers develop a strong preference for a brand
• commitment: can create a constant presence in customers minds, leading to a sense of commitment to the brand
• consideration: customers including the brand in their options when making a purchasing decision

Question 9

Explain brand association

Answer 9

Anything linked to the memory of a brand (Nike being associated with sports, athleticism and motivation from the famous ‘just do it’ slogan)

Question 10

What are the types of brand association

Answer 10

• product related attributes: relates to a products tangible qualities or physical structure. Customers evaluate a brand by comparing its performance with its functional features and quality
• non-product related attributes: also known as non-functional attributes are symbolic in nature and refer to the logo or brand name.

Question 11

What are the main types of non-product related attributes

Answer 11

• price information
• packaging or product appearance information
• user imagery attributes (what type of person uses the product)
• usage imagery

Question 12

What are the benefits of brand association (for customers)

Answer 12

> functional benefits - correspond to the product related attributes, the natural advantages of product or service consumption

> experiential benefits - correspond to the product related attributes, what it feels like to use the product or service

> symbolic benefits - correspond to non-product related attributes and relates to underlying needs for social approval or personal expression

Question 13

What are brand association characteristics

Answer 13

> favorable - whether association is positive , negative or neutral

> strength - degree to which the association is firmly held in the customers mind

> uniqueness - degree to which the association is distinctive and differentiates the brand from its competitors

Question 14

What are ways brand association adds value

Answer 14

• help customers to process and retrieve information
• provides a reason to buy for customers
• help differentiate a brand from their competitors
• create positive attitudes and feelings towards the brand
• opportunity to develop brand extensions

Question 15

Define brand loyalty

Answer 15

The attachment that a customer has towards a brand

Question 16

What are the categories/types of brand loyalty

Answer 16

• attitudinal loyalty: refers to the emotional attachment that customers have towards a brand. Which consists of three dimensions > cognitive (customers belief, perception of the brand) > affective (customers feelings and emotional connection to brand) and > conative (customers inclination to use the same brand in the future, customers commitment)
• behavioral loyalty: a measure of the customers actual purchase behavior, it relates to the tendency of customers to repeat a purchase

Question 17

What consists of the brand loyalty pyramid

Answer 17

> committed buyer (pride from using the brand)

> likes the brand (deep connection, family time)

> satisfied buyer with switching costs (unwilling to invest time to try other brands)

> habitual buyer, no reason to change (neutral)

> switcher/price sensitive, no brand loyalty (convenience)

Question 18

What is the value of brand loyalty

Answer 18

• reduce marketing costs
• attracts new customers (loyal customers spread positive word-of-mouth)
• time to respond to competitive threats (loyal customers are less price sensitive and the risk of losing customers to competitor is decreased)

Question 19

Define perceived quality

Answer 19

A customer’s judgment about a products overall excellence or superiority

Question 20

What are the dimensions of perceived quality

Answer 20

• durability > expected lifespan of a product
• serviceability > convenience in which a product can be repaired and maintained
• reliability > steadiness of a product performance across time
• performance > how well it operates at various levels, battery life, speed
• features > supplementary components of a product that enhance its primary performance characteristics
• style and design > pertains to how the product looks and the impression of its quality
• conformance quality > the extent to which a product or service conforms to predetermined standards

Question 21

What is the value of perceived quality

Answer 21

• a reason to buy
• differentiating the brand
• attracting channel member interest
• basis for line extensions
• supporting a higher price

Question 22

What are proprietary brand assets

Answer 22

• patent: prevents competitors from imitating products
• trademarks: the source of identification including a symbol, design, word phrase
• channel relationships: represents valuable business relationships with suppliers, distributors and other partners in the supply chain

Question 23

What is the value of other proprietary brand assets

Answer 23

Establish a brand’s unique identity, build customer loyalty, and create a competitive advantage

Question 24

Define brand value chain

Answer 24

A structured approach to assessing sources and outcomes of brand equity and the manner by which marketing activities create brand value

Question 25

What are the brand value chain components

Answer 25

> assumes that the custodians(overseer) of the brand value are customers

> stage 1 - the production of brand value starts when a business invest in a marketing strategy

> stage 2 - the subsequent marketing effort has an impact on customers perceptions and attitudes towards the brand

> stage 3 - the collective thinking of a large customer base determines how well the brand performs in the marketplace

> stage 4 - the investing community (shareholders) evaluates shareholders value and brand value by taking into account market performance

> the various linking elements would operate as mediators between the stages

Question 26

Brand value chain model pg 94

Question 27

What are the 4 stages of the brand value chain model

Answer 27

> marketing program investment

> customer mindset

> market performance

> shareholder value