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CREATING

Chapter. CREATING. 9. Brand Equity. In this chapter, we address the following questions:. What is a brand and how does branding work? What is brand equity? How is brand equity built, measured & managed? What are the important decisions in developing a branding strategy?.

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CREATING

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  1. Chapter CREATING 9 Brand Equity Marketing Management An Asian Perspective

  2. In this chapter, we address the following questions: • What is a brand and how does branding work? • What is brand equity? • How is brand equity built, measured & managed? • What are the important decisions in developing a branding strategy? Marketing Management An Asian Perspective

  3. Googlefounders Larry Page and Sergey Brin Marketing Management An Asian Perspective

  4. What is Brand Equity?- The Role of Brands Brand: name, sign, symbol, design, to identify goods/services of seller & differentiate from competitors’ • Identify product source & firm • Perform valuable functions for firm • Signal quality: satisfied buyer - re-buy • Valuable legal property Marketing Management An Asian Perspective

  5. The Brand Report Card World’s strongest brands 10 attributes 1. benefits consumers truly want 2. stays relevant 3. pricing - on consumer perceptions of value 4. properly positioned 5. consistent 6. portfolio makes sense 7. use marketing to build equity 8. Managers understand its meaning to consumers 9. given proper, sustained support 10. sources of brand equity monitored Marketing Management An Asian Perspective

  6. What is Brand Equity?- The Scope of Branding • Branding: Endow products with brand power • To create brand value – convince consumers of meaningful differences among brands • Related to attributes of product • Branding can be applied wherever consumer has a choice Marketing Management An Asian Perspective

  7. In Hong Kong, Oxfam brands its idea to stop poverty through the “Make Trade Fair” campaign. Marketing Management An Asian Perspective

  8. The Joseph Conrad suite at the Oriental Hotel, Bangkok. The hotel brands itself by creating a premium image that appeals to guests who seek superior service Marketing Management An Asian Perspective

  9. What is Brand Equity?- Defining Brand Equity • Brand equity - added value endowed to products & services • Important intangible asset with psychological & financial value • Customer-based brand equity effect brand knowledge has on consumer response to marketing of that brand Marketing Management An Asian Perspective

  10. What is Brand Equity?- Defining Brand Equity 3 keys to customer-based brand equity • Arise from differences in consumer responses • A result of consumer’s knowledge about brand • Reflected in perceptions, preferences, & behavior related to marketing of brand • To build a strong brand - ensure customers have right experiences & marketing create desired brand knowledge Marketing Management An Asian Perspective

  11. Table 9.1 Marketing Advantages of Strong Brands Improved Perceptions of Product Performance Greater Loyalty Less Vulnerability to Competitive Marketing Actions Less Vulnerability to Marketing Crises Larger Margins More Inelastic Consumer Response to Price Increases More Elastic Consumer Response to Price Decreases Greater Trade Cooperation & Support Increased Marketing Communications Effectiveness Possible Licensing Opportunities Additional Brand Extension Opportunities Marketing Management An Asian Perspective

  12. What is Brand Equity?- Brand Equity as a Bridge • Product marketing expenses are investments in consumer brand knowledge • Brand knowledge dictates future directions • A brand - marketer’s promise to deliver predictable product/service performance • A brand promise is the marketer’s vision of what the brand must be & do for consumers Marketing Management An Asian Perspective

  13. What is Brand Equity?- Brand Equity Models BAV Power Grid BRAND ASSET VALUATOR (BAV) • provides comparative measures of brand equity of thousands of brands across hundreds of different categories • 4 key components of brand equity: • Differentiation • Relevance • Esteem • Knowledge Marketing Management An Asian Perspective

  14. What is Brand Equity?- Brand Equity Models BAV Power Grid Differentiation + Relevance = Brand Strength Brand’s future value Esteem + Knowledge = Brand Stature Brand’s past performance • Both form a Power Grid: stages in cycle of brand development • New brands - low levels on all 4 pillars • Leadership brands - high levels on all 4 pillars • declining brands show high Knowledge Marketing Management An Asian Perspective

  15. What is Brand Equity?- Brand Equity Models Figure 9.1 BAV Power Grid Marketing Management An Asian Perspective

  16. Brand equity5 categories of brand assets & liabilities linked to a brand that form value of product to a firm and/or to its customers Brand loyalty Brand awareness Perceived quality Brand Associations Other proprietary assets What is Brand Equity?- Brand Equity Models AAKER MODEL Marketing Management An Asian Perspective

  17. What is Brand Equity?- Brand Equity Models AAKER MODEL • brand identity - unique set of brand associations that represent what brand stands for & promises to customers • 12 dimensions, 4 perspectives: • brand-as-product • brand-as-organization • brand-as-person • brand-as-symbol Marketing Management An Asian Perspective

  18. What is Brand Equity?- Brand Equity Models AAKER MODEL • brand identity = core + extended • The core identity - central, timeless essence of brand - likely to remain constant as brand travels to new markets & products • The extended identity - various brand identity elements, organized into cohesive & meaningful groups Marketing Management An Asian Perspective

  19. Building Brand Equity- Overview • Building Brand Equity - create right brand knowledge structures with right consumers • 3 brand equity drivers: • Initial choices for elements make up brand • The product, marketing activities & programs • Other associations indirectly transferred to the brand by linking it to some other entity Marketing Management An Asian Perspective

  20. Building Brand Equity- Choosing Brand Elements • Brand elements – trademarkable devices that identify & differentiate brand • Strong brands - multiple brand elements • Nike has the “swoosh” logo, the “Just Do It” slogan & the “Nike” name • Brand elements can be chosen to build as much brand equity as possible Marketing Management An Asian Perspective

  21. Building Brand Equity- Choosing Brand Elements BRAND ELEMENT CHOICE Memorable • Memorable • How easily is brand recalled, recognized? • Name to look distinctive to be memorable • Meaningful • Interpreted in values consumers seek • Marketers in the Asia Pacific should probe taboos, religious connotations conveyed by colors, numbers which are part of brand name Marketing Management An Asian Perspective

  22. Korean electronics manufacturer LG incorporates its name in its slogan, “Life’s Good.” Its simple-to-pronounce letter-name reinforced by its slogan & logo elements makes the brand name memorable Marketing Management An Asian Perspective

  23. Building Brand Equity- Choosing Brand Elements BRAND ELEMENT CHOICE Likeability • Likeability • Is it inherently likable visually, verbally? • for Fuji/Xerox Shagaku, a handheld copier, fits its image well • Transferable • Can brand element be used to introduce new products in other categories? Marketing Management An Asian Perspective

  24. Building Brand Equity- Choosing Brand Elements BRAND ELEMENT CHOICE Adaptable • Adaptable • How adaptable & updatable is the brand? • Asian brands need to retain traditional brand values as they modernize • Eg: Dutch Baby – 1965 Dutch Baby; • 2000 Dutch Lady - new name - brand market strength- more modern image Marketing Management An Asian Perspective

  25. Building Brand Equity- Choosing Brand Elements BRAND ELEMENT CHOICE Adaptable • Protectible • How legally protectible is the brand element? • unique brand name can become intimately identified with product category • eg Scotch Tape & Post-it notes Marketing Management An Asian Perspective

  26. Building Brand Equity- Choosing Brand Elements DEVELOPING BRAND ELEMENTS DEVELOPING BRAND ELEMENTS • Elements to identify products are aplenty • Likeability & appeal of brand elements - critical role in equity of a brand • play a number of brand-building roles • the less concrete brand benefits are, as is typical of service businesses, the more important that brand elements capture the brand’s intangible characteristics Marketing Management An Asian Perspective

  27. Building Brand Equity- Choosing Brand Elements DEVELOPING BRAND ELEMENTS • Slogans are a powerful brand element • Function as “hooks” to help consumers grasp what the brand is & what makes it special • Indispensable means of summarizing & translating intent of a marketing program • Think of the inherent brand meaning in slogans such as, “A Great Way to Fly” (Singapore Airlines) & “Connecting People” (Nokia) Marketing Management An Asian Perspective

  28. Building Brand Equity- Designing Holistic Marketing Activites • A brand contact - any product-related information-bearing experience a customer/prospect has with the brand, category or market • Holistic marketers emphasize 3 important new themes in designing brand-building marketing programs: • personalization, integration & internalization Marketing Management An Asian Perspective

  29. Building Brand Equity- Designing Holistic Marketing Activites • PERSONALIZATION • The Internet - opportunities to personalize marketing • experiential, one-to-one & permission marketing • Personalizing marketing is making sure the brand & its marketing is relevant to as many customers as possible – a challenge, given that no 2 customers are ever identical Marketing Management An Asian Perspective

  30. Building Brand Equity- Designing Holistic Marketing Activites integratation • Integrating marketing - mix & match activities to maximize effects • Brand awareness - consumers’ ability to identify brand under different conditions through recognition or recall • Brand image - perceptions & beliefs held by consumers through associations held in their memory Marketing Management An Asian Perspective

  31. Building Brand Equity- Designing Holistic Marketing Activites INTERNALIZATION • internal perspective - employees understand brand & how they can help brand equity • Internal branding: inform, inspire employees • Brand bonding: customers experience brand promise • Delivered if EVERYONE in company lives the brand • Customer experience with company staff influence brand perception: eg, the inflight service by the Singapore Girl - critical ingredient of Singapore Airlines’ branding success Marketing Management An Asian Perspective

  32. Building Brand Equity- Leveraging Secondary Associations • Brand associations - linked to other entities with their own associations, creating “secondary” brand associations • Brand equity created -link brand to other information in memory that conveys meaning to consumers Marketing Management An Asian Perspective

  33. Figure 9.3 Secondary Sources of Brand Knowledge Marketing Management An Asian Perspective

  34. Measuring Brand Equity- Brand Audits • A brand audit - consumer-focused exercise- procedures to assess brand health, brand equity sources & how to improve & leverage equity • Profound implications for strategic direction & brands’ resulting performance • Brand audits consist of 2 steps: • the brand inventory • the brand exploratory Marketing Management An Asian Perspective

  35. 21st Century Branding • Relying on brand awareness has become marketing fool’s gold • You have to know it before you can grow it • Always remember the Spandex rule of brand expansion • Great brands establish enduring customer relationships • Everything matters • All brands need good parents • Big is no excuse for being bad • Relevance, simplicity & humanity Marketing Management An Asian Perspective

  36. Managing Brand Equity- Brand Reinforcement • Brand equity reinforced by marketing: • What products brand represents? • How brand makes products superior? • Which strong, favorable & unique brand associations should be in consumers’ minds? • Brand Reinforcement requires innovation & relevance in marketing to satisfy target markets Marketing Management An Asian Perspective

  37. Managing Brand Equity- Brand Revitalization Refresh OR create brand equity sources: • Expand depth, breadth of brand awareness - improve brand recall & recognition in purchase/consumption • Improve strength, favorability & uniqueness of brand associations Marketing Management An Asian Perspective

  38. A corporate TIGER BALM ad showing its different products for different uses Marketing Management An Asian Perspective

  39. Billboard ads of Eu Yan Sang promote health benefits of its bottled bird’s nest & Bak Foong pills, seen throughout Malaysia Marketing Management An Asian Perspective

  40. Managing Brand Equity- Brand Crisis • More brand equity established, more likely firm can weather crisis • Careful preparation &well-managed crisis management program - critical • The key to managing a crisis is that consumers see the response by firm as both swiftand sincere Marketing Management An Asian Perspective

  41. Hello Kitty has been licensed to many products including credit cards, toasters, purses, confectionery & UNO card games Marketing Management An Asian Perspective

  42. Devising a Brand Strategy • Brand strategy – reflectselements applied to products • Brand extension – established brand used to introduce a new product • Sub-brand - new brand + existing brand • Parent brand - existing brand that gives birth to a brand extension • Family brand - parent brand associated with multiple products through brand extensions Marketing Management An Asian Perspective

  43. Devising a Brand Strategy 2 categories of Brand extensions • Line extension - parent brand used to brand new product, new target market in current product category • Category extension - parent brand used to enter a new product category Marketing Management An Asian Perspective

  44. Devising a Brand Strategy • A brand line – all products sold under brand • A brand mix - all brand lines available to buyers • Branded variants - specific brand lines supplied to specific retailers or distribution channels • A licensed product - brand name licensed to other manufacturers who make the product Marketing Management An Asian Perspective

  45. Devising a Brand Strategy- Branding Decision: To Brand or not to Brand? • 4 strategies when choosing brand names: • Individual names • Blanket family names • Separate family names for all products • Corporate name combined with individual product names Marketing Management An Asian Perspective

  46. Devising a Brand Strategy- Brand Extensions • Advantages of Brand Extensions • New Product Success: • Consumers form expectations of new product based on knowledge on parent brand • Reduce risk - easier to convince retailers to stock & promote a brand extension • Reduced costs of launch campaign – no need to create brand & new product awareness • Positive Feedback Effects • Line extensions renew interest & benefit parent brand by expanding market coverage Marketing Management An Asian Perspective

  47. Devising a Brand Strategy- Brand Extensions • Disadvantages of Brand Extensions • line-extension trap - brand name not strongly identified with any one product • Brand dilution - consumers do not link brand with specific product & start thinking less of brand • If extensions inappropriate, integrity questioned • If extension fails - harm parent brand • Switch from parent brand - cannibalizing parentbrand • Firm forgoes chance to create a new unique brand Marketing Management An Asian Perspective

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