BRAND MANAGEMENT

MKT 543
CUSTOMER-BASED EQUITY AND Chapter 2
BRAND POSITIONING
CBBE

Focus
▪ Defining Customer-Based Brand Equity
▪ Brand Equity as a Bridge
 DEFINING CUSTOMER BASED BRAND
EQUITY (CBBE)
Approaches brand equity from the perspective
of the consumer
Stresses that the power of a brand lies in what
resides in the minds and hearts of customers
Differential effect that brand knowledge has on
consumer response to the marketing of that
brand
 DEFINING CUSTOMER BASED BRAND
EQUITY (CBBE)
• Positive customer-based • Negative customer-
brand equity - When based brand equity -
consumers react more When consumers react
favorably to a product less favorably to
and the way it is
marketed when the brand marketing activity for the
is identified than when it brand compared with an
is not. unnamed or fictitiously
named version of the
product.
DEFINING CUSTOMER BASED BRAND
EQUITY (CBBE)
The three key ingredients of CBBE:
Differential effect
 Differences in consumer response
Brand knowledge
 A result of consumers’ knowledge about the brand
Consumer response to marketing
 Choice of a brand
 Recall of copy points from an ad
 Response to a sales promotion
 Evaluations of a proposed brand extension
FIGURE- MARKETING ADVANTAGES OF
STRONG BRANDS
BRAND EQUITY AS A BRIDGE

▪ Brand as a Reflection of the Past

▪ Brand as a Direction for the Future
BRAND AS A REFLECTION OF THE PAST

• Marketers should consider the money spent in

brand building as an “ investment”.
• On the basis of the past experience, what
consumers saw, heard, learned, felt, and
experienced about the brand should be
analysed.
• The quality of the investment in brand building is
the most critical factor, not the quantity.
BRAND AS A DIRECTION TO THE FUTURE

• Brand knowledge that marketers create over

time, which allows them to determine
appropriate and inappropriate future
directions for the brand.
• Brand equity offers focus and guidance,
provides a means to interpret past marketing
performance and design future marketing
programs.
MAKING A BRAND STRONG:
BRAND KNOWLEDGE
Brand knowledge is the key to creating
brand equity.
Brand knowledge consists of a brand node
in memory with a variety of associations
linked to it.
 Marketers need an insightful way to represent how
brand knowledge exists in consumer memory

Brand knowledge has two components:

brand awareness and brand image.
BRAND KNOWLEDGE

Key to create brand equity

 Creates the differential effect that drives
brand equity
ASSOCIATIVE NETWORK MEMORY MODEL

Views memory as a network of nodes and

connecting links
Nodes - Represent stored information or concepts

Links - Represent the strength of association between

the nodes

Brand associations are informational nodes

linked to the brand node in memory
FIGURE - POSSIBLE APPLE COMPUTER
ASSOCIATIONS
SOURCES OF BRAND EQUITY
SOURCES OF BRAND EQUITY
Brand awareness
 Brand recognition
 Brand recall
Brand image
 Strong, favorable, and unique brand
associations
Examples include:
Luxurious Car = Success, wealth, only the best
5 Star Hotel = Paradise fit for kings and queens
Sportswear = strong athletic body, no pain no gain,
enhance your moves
Djuice = A young aspiration generation
BRAND AWARENESS ADVANTAGES
Learning advantages
 Register the brand in the minds of consumers
Consideration advantages
 Likelihood that the brand will be a member of
the consideration set
Choice advantages
 Affect choices among brands in the
consideration set
BRAND IMAGE
Strength of • More deeply a person thinks about product
information and relates it to existing brand
Brand knowledge, stronger is the resulting brand
Associations association

Favorability • Is higher when a brand possesses relevant

of Brand attributes and benefits that satisfy
consumer needs and wants
Associations

Uniqueness • “Unique selling proposition” of the product

of Brand • Provides brands with sustainable
competitive advantage
Associations
IDENTIFYING AND ESTABLISHING BRAND
POSITIONING
▪ Basic Concepts
▪ Target Market
▪ Nature of Competition
▪ Points-of-Parity and Points-of-Difference
 BASIC CONCEPTS
Brand positioning
 Act of designing the company’s offer and
image so that it occupies a distinct and
valued place in the target customers’
minds
 Finding the proper “location” in the minds
of consumers or market segment
 Allows consumers to think about a product
or service in the “right” perspective
TARGET MARKET
Market segmentation: Divides the market into
distinct groups of homogeneous consumers who
have similar needs and consumer behavior
Involves identifying segmentation bases and
criteria
Criteria
− Identifiability
− Size
− Accessibility
− Responsiveness
FIGURE – CONSUMER/B2B SEGMENTATION BASES
NATURE OF COMPETITION
Competitive analysis
• Considers resources, capabilities and
likely intentions of other firms.
• Allows marketers to choose markets
where consumers can be profitably
served.
NATURE OF COMPETITION
Indirect competition
• Even if a brand does not face direct
competition in its product category, and
thus does not share performance related
attributes with other brands, it can still
share more abstract associations and
face indirect competition in a more
broadly defined product category.
NATURE OF COMPETITION
Multiple frames of reference
• Result of broader category competition
or the intended future growth of a brand.
POINTS OF PARITY AND POINTS OF
DIFFERENCE
Points-of-difference associations
 Points-of-parity associations
 Points-of-parity versus points-of-
difference
POINTS- OF-PARITY ASSOCIATIONS
•Attributes shared with other brands.
•Three types of associations are:
• Category points- of-parity: Necessary
conditions for brand choice.
• Competitive points-of-parity: Associations
designed to negate competitors’ points-of-
difference.
• Correlational points-of-parity: Potential
negative associations that arise from the
existence of other, more positive associations for
the brand.
POINTS-OF-PARITY VERSUS POINTS-OF-
DIFFERENCE
• Unless certain points-of-parity can be achieved
to overcome potential weaknesses, points-of-
difference may not even matter.
• There is a “zone” or “range of tolerance or
acceptance” with points-of-parity.
• Points-of-parity are easier to achieve than
points-of-differences.
POSITIONING GUIDELINES
Defining and Communicating the Competitive Frame of
Reference

Choosing Points-of-Difference

Establishing Points-of-Parity and Points-of-Difference

Straddle Positions

Updating Position Overtime

Developing a Good Positioning

DEFINING AND COMMUNICATING THE
COMPETITIVE FRAME OF REFERENCE
• Communicating category benefits - Marketers use
product benefits to announce category
membership.
• Exemplars - Well-known, noteworthy brands in a
category can also be used as exemplars to
specify a brand’s category membership.
• Product descriptor - The product descriptor that
follows the brand name is often a very compact
means of conveying category origin.
CHOOSING POINTS- OF-DIFFERENCE
• Desirability criteria
• Deliverability criteria
− Feasibility
− Communicability
• Differentiating criteria
ESTABLISHING POINTS-OF-PARITY AND
POINTS-OF-DIFFERENCE
• Separate the attributes
• Leverage equity of another entity
• Redefine the relationship
STRADDLE POSITIONS
• Type of positioning where a company is able to
straddle two frames of reference with one set of
points-of-difference and points-of-parity.
• The points-of-difference in one category become
points-of-parity in the other and vice-versa for
points-of-parity.
• Disadvantage - If the points-of-parity and points-
of-difference with respect to both categories are
not credible, consumers may not view the brand as
a legitimate player in either category.
UPDATING POSITIONS OVERTIME
• Laddering
− Once the target market attains a basic
understanding of how the brand relates to
alternatives in the same category, it may be
necessary to deepen the meanings
associated with the brand positioning.
− Failure to move up the ladder may reduce
the strategic alternatives available to a
brand.
UPDATING POSITIONS OVERTIME
• Reacting
• When a competitor challenges an
existing POD or attempts to
overcome a POP, there are
essentially three main options for
the target brand:
− Do nothing.
− Go on the defensive.
− Go on the offensive.
BRAND MANTRA
Focus
− Designing a Brand Mantra
− Implementing a Brand Mantra
BRAND MANTRA
•Short, three-to five-word phrase that
captures the irrefutable essence or
spirit of the brand positioning.
•Provides guidance about:
• What products to introduce under the brand.
• What ad campaigns to run.
• Where and how the brand should be sold.
DESIGNING A BRAND MANTRA

A good brand mantra should provide:

− Brand functions: Nature of the product or
service or the type of experiences or
benefits the brand provides.
− Descriptive modifier: Combined with brand
functions, helps delineate the brand
boundaries.
− Emotional modifier: Determines how a
brand provides benefits and in what ways.
DESIGNING THE BRAND MANTRA
IMPLEMENTING BRAND MANTRA
• Should be developed at the same time as the
brand positioning.
• Requires more internal examination and
involves input from a wider range of company
employees.
• Based on core brand associations, a
brainstorming session can attempt to identify
PODs, POPs, and different brand mantra
candidates.