CHAPTER 2
Marketing Communications Challenges:
Enhancing Brand Equity, Influencing
Behavior, and Being Accountable
© 2010 South-Western, a part of Cengage Learning
All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama
Eighth Edition
Chapter Objectives
After reading this chapter you should be able to:
1. Explain the concept of brand equity from both the
company’s and the customer’s perspectives.
2. Describe the positive outcomes that result from
enhancing brand equity.
3. Appreciate a model of brand equity from the
customer’s perspective.
4. Understand how marcom efforts must influence
behavior and achieve financial accountability..
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–2
Introduction:
Framework for Marcom Process
Fundamental
Decisions
Implementation
Decisions
Desired
Outcomes
Evaluation and
Corrective Action
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–3
Basic IMC Issues
Marketing
Communicators
How to enhance
brand equity
How to affect
customer
behavior
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
How to justify
marcom
investments
How to
demonstrate
financial
accountability
2–4
Basic IMC Issues
• What can marketing communicators do to
enhance the equity of their brands?
• How can marketing communicators affect the
behavior of their present and prospective
customers?
• How can marketing communicators justify their
investments in advertising, sales promotions,
and other marcom elements?
• How can marketing communications
demonstrate financial accountability?
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–5
Brand
• Brand
 Is a name, term, sign, symbol, or design.
 Identifies and differentiates goods and services of one
seller or group of sellers from those of the
competition.
 Communicates a particular set of values.
• Brand Equity
 Can be considered either from the perspective of the
organization that owns it or from the vantage point of
the customer.
 Is valuable when consumers believe the brand can
deliver on its promises.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–6
A Firm-Based Perspective on Brand Equity
Effects of Brand
Equity Increases
Higher
market share
Increased
brand loyalty
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Premium
pricing
Revenue
premiums
2–7
Table 2.1
Children’s Taste Preferences (In percents)
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2–8
Brand Equity Increases
• Revenue Premium
 The revenue differential between a branded item and
a corresponding private labeled item.
 Revenue premium for a branded item (b) compared to
a private label (pl) =
(volumeb)(priceb) – (volumepl)(pricepl)
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–9
Figure 2.1
A Customer-Based Brand Equity Framework
Source: Adapted from Kevin Lane Keller, “Conceptualizing, Measuring, and Managing
Customer-Based Brand Equity,” Journal of Marketing 57 (January 1993), 7.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–10
Forms of Brand Knowledge
• Brand Awareness
 Whether a brand name comes to mind when
consumers think about a particular product category
 The ease with which the name is evoked
• Brand Image
 The types of associations that come to the
consumer’s mind when contemplating a particular
brand
• Top-of-Mind Awareness (TOMA)
 Occurs when a brand is the first brand that
consumers recall when thinking about brands in a
particular product category.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–11
Figure 2.2
The Brand Awareness Pyramid
Source: David A. Aaker, Managing Brand Equity (New York: Free Press, 1991), 62.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–12
Brand Associations
Brand image
associations that
build brand equity
Positive
Attributes
Perceived
Benefits
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Favorable
Attitude
2–13
Dimensions of Brand Personalities
Sincerity
Competence
Excitement
Sophistication
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Ruggedness
2–14
Ways of Enhancing Brand Equity
Enhancing Brand
Equity
Speak-for-Itself
Message-Driven
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Leveraging
2–15
Figure 2.3
Leveraging Brand Meaning from Various Sources
Source: Kevin Lane Keller, “Brand Synthesis: The Multidimensionality of Brand Knowledge,”
Journal of Consumer Research 29 (March 2003), 598. By permission of the University of Chicago Press.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–16
Types of Branding for Leveraging
• Co-Branding
 A partnership between two brands
• Ingredient Branding
 Inclusion of one brand within the other
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–17
What Benefits Result from Enhancing
Brand Equity?
• Increased consumer loyalty
• Long-term growth and profitability for the brand
• Maintain brand differentiation from competitive
offerings
• Insulate brand from price competition
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–18
Measuring World-Class Brands
Evaluating
World-Class Brands
Quality
Salience
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Equity
2–19
Characteristics of a World-Class Brand
• Delivers benefits
consumers want
• Brand helps build brand
equity
• Stays relevant
• Good positioning
• Brand’s managers
understand what the
brand means to
consumers
• Consistency
• Support over long run
• Fits into brand portfolio
• Monitoring of the sources
of brand equity
• Price equals value
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–20
Table 2.2
Top Ten World-Class Brands Overall (Among 1,030 total
brands included in EquiTrend’s Spring 2006 survey)
Source: Spring 2006 EquiTrend brand study by Harris Interactive,
http://www.harrisinteractive.com/news/allnewsbydate.asp?NewsID=1063 (accessed July 26, 2007).
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–21
Table 2.3
Interbrand’s Top 20 Global Brands, 2007
Source: Interbrand Report, “Best Global Brands 2007,” http://www.interbrand.com/best_brands_2007.asp.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–22
Affecting Behavior and Achieving
Marcom Accountability
• The Importance of Brand Awareness
 Creating brand awareness and boosting brand image
serve little positive effect unless individuals make
purchases or engage in desired behaviors
 Marcom’s objective is ultimately to affect sales
volume and revenue
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–23
Measuring Marketing Investment
Performance
• Return on Marketing Investment (ROMI)
 Measures the effect of marcom, or of its specific
elements such as advertising, in terms of whether it
generates a reasonable revenue return on the
marcom investment
• Why Measure Marcom Effectiveness?
 Demands for greater accountability on the marketing
function
 To become better at marcom activities
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–24
Measuring Marketing Investment
Performance
• Difficulties in Measuring Marcom Effectiveness
 Choosing an appropriate metric
 Gaining agreement on measures
 Collecting accurate data for marcom assessment
 Determining effects of specific marcom elements
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–25
Difficulties in Measuring Marcom
Effectiveness: Choosing a Metric
What to Measure?
Change in
brand
awareness
Improvement
in attitudes
toward
the brand
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
Increased
purchase
intentions
Larger sales
volume
2–26
Difficulties in Measuring Marcom
Effectiveness: Gaining Agreement
• Finance Departments’
Measures of Success:
 Discounted cash flows
 Net present values of
investment decisions
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
• Marketing Departments’
Measures of Success:
 Measures of brand
awareness, image, and
equity
2–27
Difficulties in Measuring Marcom
Effectiveness: Collecting Accurate Data
and Calibrating Special Effects
• What exact sales figures should be used to
calculate sales?
• How much relative effect does each program
element have on sales volume compared to the
effect of other elements?
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
2–28
Measuring Marcom Effectiveness
• Marketing-Mix Modeling
 Employing econometric statistical techniques to
estimate the effects that elements of the marcom mix
have in driving sales volume.
• Example:
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2–29