Chapter 9
Creating Brand Equity
Brand Equity: added _____ endowed to products and services
- value is reflected in how we think, feel and act with respect to the brand, as well as the prices, market share, and profitability that the brand commands for the firm.
• Value to customer: interpretation/processing of information, confidence in purchase decision, use satisfaction www.littletikes.com
• Value to firm: marketing programs, brand loyalty, prices/margins, brand extensions, trade leverage, competitive advantage

Brand Equity Implications

Trade leverage in bargaining with retailers because customers expect them to carry the brand

Company can charge ______ price because brand has higher perceived quality

Easier to launch extensions because brand name carries high ___________________

Brand offers defense against price competition

Building Brand Equity (p. 281)
Brand elements: trademarkable devices that serve to identify and differentiate the brand.
Developing Brand Elements (p. 282)
What images come to mind?
How easily is the name pronounced?
How well is the name remembered?
Which names are preferred?

Building Brand Equity
Designing Holistic Marketing Activities (p. 284)
Customers come to know a brand through a range of contacts and touch points – personal observation and use, word of mouth, interactions with company personnel, online or telephone experiences, and payment transactions.
Application –

Devising a Branding Strategy
Brand extension – established brand name is used to launch new products
Honda:
Advantages: Consumers have positive expectations of brand; reduced costs – introducing a new name, creating awareness of brand and new product, packaging and labeling, etc.

Devising a Branding Strategy
Disadvantages of brand extensions: brand name may not be as strongly identified with any one product
– Cadbury: chocolates and candy,
Cannibalization: customers switch to the extended brand from the parent brand

Crafting the Brand Positioning
(Chapter 10)
Positioning – act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market

Points of Parity and Points of Difference
(p. 312)
Points-of-Difference: attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand –
Points-of-Parity: associations that are not necessarily unique to a brand but may in fact be shared with other brands – all travel agencies must be able to make air and hotel reservations,

Points of Parity and Points of Difference
Challenge:
To achieve a point of parity on a particular attribute or benefit, a sufficient number of customers must believe that the brand is “good enough” on that dimension. http://www.hyundaiusa.com/
With points of difference, the brand must demonstrate clear superiority

Choosing POPs and PODs (p. 315)
1.
Relevance – target customers must find the POD personally relevant and important
2.
Distinctiveness – target customers must find the POD distinctive and superior
3.
Believability – target customers must find the POD believable and credible
4.
Feasibility – the firm must be able to actually create the POD
5.
Communicability – consumers must be given a compelling reason and understandable rationale as to why the brand can deliver the desired benefit
6.
Sustainability – can the favorability of a brand association be reinforced and strengthened over time?

Adding Further Differentiation
Differentiation – adding a set of meaningful and _______ differences to distinguish the company’s offering from the competitors’ offerings

Adding Further Differentiation
Meaningful or worthwhile differentiation
Criteria:
Important : highly valued
Distinctive : delivered in a distinctive way
Superior : superior to other ways of obtaining the benefit
Preemptive : cannot easily be copied by competitors
Affordable : buyer can afford to pay the difference
Profitable : company will find it profitable to introduce the difference google.com

Sales and Product Life Cycles (p. 332)
Introduction - slow sales growth; high cost per customer; technological problems, recover R&D
Create product awareness and trial; samples/coupons to induce trial; offer a basic product
Growth – rapidly rising sales; rising profits; growing number of competitors
Maximize market share; offer product extensions, service, warranty

Sales and Product Life Cycles
Maturity – peak sales; profits stabilize or decline because of increased competition
Maximize profit while defending market share; diversify brands and items models (diet cola)
Decline
– declining sales; declining profits
Reduce expenditure and milk the brand

Sales and Product Life Cycles
Implications
Different products have different life spans
Anticipate differences in sales over time and develop appropriate strategies

Sales and Product Life Cycles
Time Time