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CHAPTER 9

CHAPTER 9. Creating Brand Equity. WHAT IS BRAND EQUITY. BRAND A name, term, sign, symbol, or design, or combination of them – To identify the goods or services of one seller or group of sellers To differentiate them from those of competitors. It is possible to brand -

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CHAPTER 9

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  1. CHAPTER 9 Creating Brand Equity

  2. WHAT IS BRAND EQUITY BRAND A name, term, sign, symbol, or design, or combination of them – • To identify the goods or services of one seller or group of sellers • To differentiate them from those of competitors

  3. It is possible to brand - A physical good, a service, a store, a person, a place, an organization, or an idea To brand a product, it is necessary to teach consumers– • “WHO” the product is • “WHAT” the product does • “WHY” consumers should care

  4. BRAND EQUITY Brand equity is the added value endowed to product services. This value reflected in – • How consumers think, feel and act with respect to the brand. • The prices, market share, and profitability that the brand commands for the firm.

  5. Customer-based brand equity can be defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand. • Brand equity arises from differences in consumer response • These differences in response are a result of consumer’s brand knowledge. • The differential response by consumers that makes up the brand equity is reflected in perceptions, preferences and behavior related to all aspects of the marketing of a brand.

  6. BUILDING BRAND EQUITY • The initial choices for the brand elements or identities making up the brand. (Choosing the brand element) • The product and service and all accompanying marketing activities and supporting marketing programs. (Designing holistic marketing activities) • Other associations indirectly transferred to the brand by linking it to some other entity. (Leveraging secondary associations)

  7. 1. Choosing brand elements Brand elements are those trademarkable devices that serve to identify and differentiate the brand. • Brand elements choice criteria – • Memorable • Meaningful • Likeability • Transferable • Adaptable • Protectable Brand building Defensive

  8. Developing brand elements – • NameAssociation test (What images come to mind) Learning test (How easily is the name pronounced) Memory test (How well is the name remembered) Preference test (Which names are preferred) • Symbol • Slogan

  9. 2. Designing holistic marketing activities • Personalization Personalizing marketing is that the brand and its marketing are as relevant as possible to as many customers as possible. • Integration Integrating marketing involves mixing and matching marketing activities to maximize their effects. • Internalization Internal branding is activities and processes that help to inform and inspire employees.

  10. 3. Leveraging secondary associations Brand equity may be created by linking the brand to other information in memory that conveys meaning to consumers. Source factors / entities – • The company • Countries or other geographical regions • Channels of distribution • Other brands • Characters • Spokespeople • Sporting or cultural events

  11. MANAGING BRAND EQUITY • Brand reinforcement Reinforcing brand equity requires innovation and relevance throughout the marketing programs. • Brand revitalization Reversing a brand’s fortunes requires either that - • It “returns to its roots” and lost sources are restored or • New sources of brand equity are established

  12. Brand crisis The more that brand equity and a strong corporate image has been established, the more likely it is that the firm can weather the storm. The key to managing a crisis – 1. SwiftnessThe longer it takes a firm to respond to a marketing crisis, the more likely it is that consumers can form negative impressions. 2. Sincere The more sincere the response by the firm, the less likely it is that consumers will form negative attributes.

  13. DEVISING A BRANDING STRATEGY Devising a branding strategy involves deciding the nature of new and existing brand elements to be applied to new and existing products. • It can develop new brand elements for new product • It can apply some of its existing brand elements 3. It can use a combination of new and existing brand elements

  14. Branding decisions • The first branding strategy decision is whether to develop a brand name for a product. • Assuming a firm decides to brand its products or services, it must then choose which brand names to use.

  15. Four general strategies for brand name selection - Individual names Blanket family names Separate family names for all product Corporate names combined with individual product names

  16. 2. Brand extensions • When a firm uses an established brand to introduce a new product, it is called brand extension. • Advantages of brand extensions – • New-product success • Positive feedback effects

  17. New-product success • Consumers can make inferences and form expectations based on their knowledge about the parent brand. • It is easier to convince retailers to stock and promote a brand extension. • For communication, a campaign can create awareness of the new product, not the brand. • They can avoid the difficulty and expense of coming up with a new name. • Extensions allow for packaging and labeling efficiencies.

  18. 2. Positive feedback effects • They can help to clarify the meaning of a brand and its core brand values • They can improve consumers perceptions of the credibility of the company behind the extensions • They can renew interest and liking for the brand • They can benefit the parent brand by expanding market coverage

  19. Disadvantages of brand extensions – • Risk of losing its more specific meanings • The question of integrity and competence of the brand • Harmful for parent brand image, if it fails • Switching to the extension from existing product offerings of the parent brand

  20. 3. Brand portfolios The brand portfolio is the set of all brands and brand lines a particular firm offers for sale to buyers in a particular category. The basic principle in designing a brand portfolio is to maximize market coverage but to minimize brand overlap.

  21. The reasons for introducing multiple brands in a category include – • To pursue different market segments • To increase shelf presence and retailer dependence in the store • To attract consumers seeking varieties who may otherwise have switched to another brands • To increase internal competition within the firm • To yield economies of scale in other areas

  22. The specific roles brands can play as part of a brand portfolio - • Flankers or fighter brands • Cash cows • Low-end entry-level • High-end prestige

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