CUSTOMERBASED BRAND EQUITY www assignmentpoint com CustomerBased Brand
CUSTOMER-BASED BRAND EQUITY www. assignmentpoint. com
Customer-Based Brand Equity n “The differential effect that brand knowledge has on consumer response to the marketing of that brand. ” Keller, 1993 www. Assignment. Point. com
Customer-Based Brand Equity n Differential effect n n Brand knowledge n n Differences in consumer response A result of consumers’ knowledge about the brand Consumer response to marketing Choice of a brand n Recall of copy points from an ad n Response to a sales promotion n Evaluations of a proposed brand extension n www. Assignment. Point. com
Brand Equity as a “Bridge” Reflection of past investments in the marketing of a brand n Direction for future marketing actions or programs n www. Assignment. Point. com
Making a Brand Strong: Brand Knowledge Brand knowledge is the key to creating brand equity. n Brand knowledge consists of a brand node in memory with a variety of associations linked to it. n Brand knowledge has two components: brand awareness and brand image. n www. Assignment. Point. com
Sources of Brand Equity n Brand awareness Brand recognition n Brand recall n n Brand image n Strong, favorable, and unique brand associations www. Assignment. Point. com
Brand Awareness Advantages n Learning advantages n n Consideration advantages n n Register the brand in the minds of consumers Likelihood that the brand will be a member of the consideration set Choice advantages n Affect choices among brands in the consideration set www. Assignment. Point. com
Establishing Brand Awareness Increasing the familiarity of the brand through repeated exposure (for brand recognition) n Forging strong associations with the appropriate product category or other relevant purchase or consumption cues (for brand recall) n www. Assignment. Point. com
Creating a Positive Brand Image n Brand Associations Does not matter which source of brand association n Need to be favorable, strong, and unique n Marketers should recognize the influence of these other sources of information by both managing them as well as possible and by adequately accounting for them in designing communication strategies. n www. Assignment. Point. com
The Four Steps of Brand Building 1. 2. 3. 4. Ensure identification of the brand with customers and an association of the brand in customers’ minds Establish the totality of brand meaning in the minds of consumers Elicit the proper customer responses to the brand identification and brand meaning Convert brand response to create an intense, active loyalty relationship between customers and the brand www. Assignment. Point. com
Four Questions Customers ask of Brands 1. 2. 3. 4. 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) www. Assignment. Point. com
Customer-Based Brand Equity Pyramid 4. RELATIONSHIPS = RESONANCE What about you and me? 3. RESPONSE = JUDGMENTS FEELINGS What about you? 2. MEANING = PERFORMANCE IMAGERY SALIENCE www. Assignment. Point. com What are you? 1. IDENTITY = Who are you?
Sub-Dimensions of CBBE Pyramid LOYALTY ATTACHMENT COMMUNITY ENGAGEMENT QUALITY CREDIBILITY CONSIDERATION SUPERIORITY PRIMARY CHARACTERISTICS & SECONDARY FEATURES PRODUCT RELIABILITY, DURABILITY & SERVICEABILITY SERVICE EFFECTIVENESS, EFFICIENCY & EMPATHY STYLE AND DESIGN PRICE WARMTH FUN EXCITEMENT SECURITY SOCIAL APPROVAL SELF-RESPECT USER PROFILES PURCHASE & USAGE SITUATIONS PERSONALITY & VALUES HISTORY, HERITAGE & EXPERIENCES CATEGORY IDENTIFICATION NEEDS SATISFIED www. Assignment. Point. com
Salience Dimensions n Depth of brand awareness Ease of recognition and recall n Strength and clarity of category membership n n Breadth of brand awareness Purchase consideration n Consumption consideration n www. Assignment. Point. com
Depth and Breadth Importance The product category hierarchy shows us not only the depth of awareness matters but also the breadth. n The brand must not only be top-of-mind and have sufficient “mind share, ” but it must also do so at the right times and places. n www. Assignment. Point. com
Product Category Structure n To fully understand brand recall, we need to appreciate product category structure, or how product categories are organized in memory. www. Assignment. Point. com
Performance Dimensions n Primary characteristics and supplementary features n Product reliability, durability, and serviceability n Service effectiveness, efficiency, and empathy n Style and design n Price www. Assignment. Point. com
Imagery Dimensions n User profiles n n Purchase and usage situations n n n Type of channel, specific stores, ease of purchase Time (day, week, month, year, etc. ), location, and context of usage Personality and values n n Demographic and psychographic characteristics Actual or aspirational Group perceptions—popularity Sincerity, excitement, competence, sophistication, and ruggedness History, heritage, and experiences n Nostalgia www. Assignment. Point. com
Judgment Dimensions n Brand quality n Value n Satisfaction n n Brand consideration n n Brand credibility Relevance Brand superiority n Differentiation Expertise n Trustworthiness n Likeability n www. Assignment. Point. com
Feelings Dimensions Warmth n Fun n Excitement n Security n Social Approval n Self-respect n www. Assignment. Point. com
Resonance Dimensions n Behavioral loyalty n n Attitudinal attachment n n n Love brand (favorite possessions; “a little pleasure”) Proud of brand Sense of community n n n Frequency and amount of repeat purchases Kinship Affiliation Active engagement n n n Seek information Join club Visit website, chat rooms www. Assignment. Point. com
Customer-Based Brand Equity Model INTENSE, ACTIVE LOYALTY Consumer. Brand Resonance Consumer Judgments Brand Performance Consumer Feelings Brand Imagery Brand Salience www. Assignment. Point. com RATIONAL & EMOTIONAL REACTIONS POINTS-OFPARITY & POINTS-OFDIFFERENCE DEEP, BROAD BRAND AWARENESS
J-2 J-1 3 Judgment R-10 F-2 F-1 11 3 F- I-1 I-12 I-2 0 F-1 1 3 R-2 R-1 P-10 I-1 5 9 F- FF-6 F-7 F-8 I-6 I-7 I-8 5 I-10 I-9 www. Assignment. Point. com R-4 R- F-4 R-6 Feelings R-7 R-8 I-4 9 Imagery R- 0. 58 0. 24 R- 5 J-6 J-7 J-8 5 P-6 P-7 P-8 Resonance 0. 66 0. 17 R-1 9 J- J- 9 P- P- 0. 49 2 J-4 1 0. 65 1 R- P-4 J- P- 3 J- 11 P-2 P-1 P- Performance J-10 11 2 Application: Identify the Key Drivers of Brand Equity
Brand Building Implications Customers own brands. n Don’t take shortcuts with brands. n Brands should have a duality. n Brands should have richness. n Brand resonance provides important focus. n www. Assignment. Point. com
Creating Customer Value n n Customer-brand relationships are the foundation of brand resonance and building a strong brand. The customer-based brand equity model certainly puts that notion front and center. www. Assignment. Point. com
Is a company consumercentric? 1. 2. 3. 4. 5. Is the company looking for ways to take care of you? Does the company know its customers well enough to differentiate between them? Is someone accountable for customers? Is the company managed for shareholder value? Is the company testing new customer offers and learning from the results? Sources: Larry Selden and Geoffrey Colvin, 2004. www. Assignment. Point. com
Customer Relationship Management (CRM) n Uses a company’s data systems and applications to track consumer activity and manage customer interactions with the company www. Assignment. Point. com
Customer Equity n Blattberg and Deighton (1996) offer eight guidelines as a means of maximizing customer equity: n n n n 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 www. Assignment. Point. com retention efforts
Customer Equity The sum of lifetime values of all customers n Customer lifetime value (CLV) is affected by revenue and by the cost of customer acquisition, retention, and cross-selling n Consists of three components: n Value equity n Brand equity n Relationship equity n Rust, Zeithamal & Lemon, 2004 www. Assignment. Point. com
Relationship of Customer Equity to Brand Equity Customers drive the success of brands but brands are the necessary touchpoint that firms have to connect with their customers. n Customer-based brand equity maintains that brands create value by eliciting differential customer response to marketing activities. n The higher price premiums and increased levels of loyalty engendered by brands generate incremental cash flows. n www. Assignment. Point. com
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