RESUME + CASE CHAPTER 11 CREATING BRAND EQUITY FAIRUZA NADIRA (202160091) CASE: Apple, which is considered the most popular brand in 2015, is a typical example of a brand with positive equity. The company got its positive reputation with Mac computers before expanding the brand to iPhones, which brings in the brand promise expected by Apple’s computer users. Regional supermarket chain Wegmans has gained much brand equity. As stores extend in new territories, the brand reputation creates crowds so huge that police have to direct traffic inside and outside store parking spaces. RESUME: 1. How Does Branding Work? The American Marketing Association (AMA) defines a brand as "a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors". * THE ROLE OF BRANDS Consumers may evaluate identical products differently depending on how branded. Consumers learn about the brand through past experiences with the product and know the brand meets their needs. Simplify decision making and reduce risk. Brands' Role for Consumers A brand is a promise between a company and a consumer. This is a way to manage consumer expectations and reduce risk. Brands' Role for Firms Brands also perform valuable functions for the company. First, they simplify product handling by helping to organize inventory and accounting records. A brand also offers strong legal protection for a unique feature or aspect of a product. THE SCOPE OF BRANDING Branding is the process of endowing products and services with the power of a brand. Branding can be applied almost anywhere consumers have a choice. It is possible to brand either a physical (Pantene shampoo), a service (Indian Airlines), a shop (Big Bazaar), a person (Rani Mukherjee), a place (Education city), an organization (UNICEF), or an idea (freedom of speech). *Branding Branding is the process of endowing products and services with the power of a brand. It's all about making a difference between products. 2. Defining Brand Equity *Brand Equity added value is endowed for products and services. How consumers think, feel, and act with respect to the brand, as well as the price, market share and profitability that the brand commands for the company. Important intangible assets that have psychological and financial value to the company. *Customer-based brand equity the effect of differences in brand knowledge on consumer responses to marketing that brand. A brand has positive customer-based brand equity when consumers react better to the product and the way it is marketed when the brand is identified that when it is not identified. A brand has a negative customer-based consumer brand equity, reacting less favorably to marketing activities for the brand in a similar situation. *Brand Promise the marketer's vision of what the brand should be and do for consumers. * BRAND EQUITY MODELS Although marketers agree on the basic principles of branding, a number of brand equity models offer different perspectives. Here we highlight three that were established. Brand Asset Evaluator *Energized differentiation measures the extent to which a brand is seen as different from others as well as the strength of its pricing. *Relevance measure the suitability and breadth of appeal of this brand *Esteem measures of perceived quality and loyalty, or how well a brand is perceived and respected. *Knowledge measures how aware and familiar consumers are with the brand and the depth of their experience. Brand Brand success along three dimensions, in turn, is reflected in three important outcome measures: *Power predict brand volume share *Premium the brand's ability to command a premium price relative to the category average *Potential probability that the brand will grow in share value Brand Resonance Model The resonance brand model also views brand building as a series of ascending steps, from the ground up (1) ensure customers identify the brand and associate it with a particular product class or need, (2) firmly establish the brand meaning of the customer's mind by strategically linking a number of tangible and intangible brand associations, (3) elicit appropriate customer responses in terms of brand-related judgments and feelings, and (4) change the customer's brand response intense, active loyalty. *Brand salience is how often and how easily customers think about a brand under various buying or consumption situations - the depth and breadth of brand awareness. *Brand performance is how well the product or service meets the functional needs of the customer. *Brand imagery describes the extrinsic nature of a product or service, including the ways in which the brand tries to meet the psychological or social needs of the customer. *Brand judgments focus on the customer's own personal opinion and evaluation. *Brand feelings are the customer's emotional response and reaction to the brand. *Brand resonance describes the relationship customers have with the brand and the degree to which they feel they are in sync with it. 1. Building Brand Equity Marketers build brand equity by creating the right brand knowledge structure for the right consumers. This process relies on all contact with the brand whether it is done by the marketer or not. However, from a marketing management perspective there are three main sets of brand equity drivers: 1.) Initial choice of elements or brand identity that make up the brand (brand name, URL, logo, emblem, character, spokesperson, slogan, song, packaging and billboard) 2.) Products and services and all marketing activities and supporting marketing programs that accompany them. 3.) Other associations given indirectly to a brand by associating the mark with some other entity (person, place or thing) Choosing Brand Elements *Brand elements are tools, which can be trademarked, that identify and differentiate brands. Brand Element Choice Criteria There are 6 criteria for selecting brand elements. The first three, namely memorable, meaningful, likeable are brand building. The last 3 namely transferable, adaptable, protectable are defensive and leverage help and preserve brand equity against challenges. 1.) Memorable 2.) Meaningful 3.) Likeable 4.) Transferable 5.) Adaptable 6.) Protectable Developing Brand Elements Such as brand names, slogans, is a very efficient means of building brand equity DESIGNING HOLISTIC MARKETING ACTIVITIES Brands are not built by advertising alone. Customers come to know the brand through a variety of contacts and touch points: personal observation and usage, word of mouth, interactions with company personnel, online or telephone experiences, and payment transactions. *Brand Contact is an information-bearing experience, whether positive or negative, a customer or prospect has with a brand, product category, or market. * LEVERAGING SECONDARY ASSOCIATIONS INTERNAL BRANDING Internal branding consists of activities and processes that help inform and inspire employees about the brand. Some important foundations for internal branding are: 1) Choose the Right Moment 2) Marketing Internal and External Links 3) Bringing the Brand to Life for Employees 4) Keep it Simple 1. Measuring Brand Equity How do we measure brand equity? The indirect approach assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures. The direct approach assesses the actual impact of brand knowledge on consumer responses to various aspects of marketing. "Marketing Insight: The Brand Value Chain" shows how to link the two approaches. *Brand Audit is a series of focused procedures for assessing brand health, uncovering sources of brand equity, and suggesting ways to increase and leverage equity. *Brand-tracking Studies use brand auditing as an input to collect quantitative data from consumers over time, providing consistent, basic information about how brands and marketing programs are performing. Marketers must distinguish brand equity from brand valuation, which is the job of estimating the total financial value of a brand. 1. Market Segmentation The first step is to divide the market in which the brand is sold into exclusive segments which help determine the variation between the different customer groups of the brand. 2. Financial Analysis Interbrand assesses purchase price, volume, and frequency to help calculate accurate estimates of future brand sales and revenue. 3. Role of Branding Interbrand next attributes the proportion of Economic Profit to brands in each market segment by first identifying the various drivers of demand and then determining the extent to which the brand directly affects each. 4. Brand Strength Interbrand then assesses the brand strength profile to determine the likelihood that the brand will realize the estimated Brand Profit. 5. Brand Value Calculation Brand Value is the net present value of the brand's estimated profit, discounted by the brand's Discount Rate.
