BRAND MANAGEMENT

CUSTOMER-BASED BRAND EQUITY AND BRAND

POSITIONNING

Satadruta Mookherjee (Fiona)

Assistant Professor
Marketing
 OUTLINE OF THE SESSION
1. Customer-based brand equity
2. Making a brand strong: brand knowledge
3. Sources of brand equity
4. Identifying and establishing brand positioning
5. Defining a brand mantra

à Group work on the case study

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1. CUSTOMER-BASED BRAND
EQUITY
 1. CUSTOMER-BASED BRAND
EQUITY
o Two questions often arise in Marketing:
– What makes a brand strong?
– How do we build a strong brand?

o Customer-based brand equity (CBBE)

– Provides a unique PoW on what brand equity is and how it
should best be built, measured, and managed

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 1. CUSTOMER-BASED BRAND
EQUITY
o Defining customer-based brand equity (CBBE)
– Brand equity from the perspective of the consumer
– Understanding the consumers and organizations’ needs and
wants + products and programs to satisfy = successful
marketing
– Basic premise of CBBE is that the power of a brand à what
customers have learned, felt, seen, and heard about the brand
as a result of their experiences over time = what resides in the
minds and hearts of customers
– The challenge for marketers in building strong brands: ensuring
that customers have the right type of experiences with
products and services

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 1. CUSTOMER-BASED BRAND
EQUITY

Customer-based brand equity is the differential effect that

brand knowledge has on customer response to the marketing
of that brand

Positive Negative
CCBE CCBE

Customers react more favorably to Customers react less favorably to

a product and the way it is marketing activity for the brand
marketed when the brand is compared with an unnamed or
identified than when it is not fictitiously named version of the
product

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 1. CUSTOMER-BASED BRAND
EQUITY

Customer-based brand equity is the differential effect that

brand knowledge has on customer response to the
marketing of that brand

1. Differences in customer response: if no differences occur, the

brand-name product can essentially be classified as a commodity or a
generic version of the product à Competition based on price
2. Customer knowledge about the brand: What they have learned,
felt, seen, and heard about the brand as a result of their experiences
over time. Brand equity à what resides in the minds and hearts of
existing and prospective customers
3. Customers’ differential responses: reflected in perceptions,
preferences, and behavior related to all aspects of brand marketing

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 1. CUSTOMER-BASED BRAND
EQUITY
Marketing Advantages of Strong Brands

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 1. CUSTOMER-BASED BRAND
EQUITY
o CBBE illustrationà Comparaison test

Group A Group B

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 1. CUSTOMER-BASED BRAND
EQUITY
o Comparison test (based on price effect)
o https://www.youtube.com/watch?v=A_2FCJa5uPw

o These branding effects occur in the marketplace … GE vs

Hitachi in the 80s’
– At one time, GE and Hitachi jointly owned a factory in England
that made identical TV for the 2 brands. The only differenceà
the name on the TV
– The Hitachi TV was sold for a 75 dollars premium over the GE
TV. Moroever, Hitachi sold twice as many TV depsite the GE
lower price….
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 1. CUSTOMER-BASED BRAND
EQUITY
o Brand equity as a bridge
– Brand equity provides marketers with a vital strategic bridge
from their past to their future

Brands as a reflection of the PAST

o Marketers should consider all the
dollars spent on manufacturing and
marketing products each year not so
much as expenses but as
investments
o The quality of the investment in
brand building is the most critical
factor not the quantity!

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 1. CUSTOMER-BASED BRAND
EQUITY
o Brand equity as a bridge

Netflix is competing with major studios and is now focusing its

marketing activities around getting consumers to watch its growing
portfolio of original content.
Netflix has adopted a few marketing strategies that have been key to its
success. Netflix’s ability to identify and understand customers’
needs is a distinct capability that Netflix has leveraged effectively. In
order to deliver original programming, Netflix tracks when, how, and
what content or programming consumers like to watch, which then
allows them to create new content that is explicitly tailored to
consumers’ tastes and behaviors.
Its success with original hit shows such as Black Mirror and Stranger
Things can be attributed, in part, to the firm’s ability to use technology in
novel ways to promote the shows and engage with the audience.
Netflix has developed such a strong relationship with its customers that
the brand name has become a verb—the phrase “Netflix Binge” has
become part of the national vocabulary, to refer to binge-watching on
Netflix.

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 1. CUSTOMER-BASED BRAND
EQUITY
o Brand equity as a bridge
– Brand equity provides marketers with a vital strategic bridge
from their past to their future

Brands as a direction for the FUTURE

o Consumers will decide where they
think the brand should go
o Everything the firm does can either
enhance or detract from brand equity

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 1. CUSTOMER-BASED BRAND
EQUITY
o Brand equity as a bridge
– Brand equity provides marketers with a vital strategic bridge
from their past to their future
The Discovery Channel was launched with the motto “Explore Your
World” and well-defined brand values of adventure, exploration, science,
and curiosity.

After a detour to reality programming featuring crime and forensics

shows and biker and car content, the channel returned to its mission of
producing high-quality work that the company could be proud of and that
was beneficial for people and sustainability of the environment.

The Discovery Channel is seen as a dominant cable channel (ranked in

the top five cable channels within the United States), with popular
shows such as Shark Week with a particular appeal to certain segments
of consumers (e.g., men aged 35–54).

Today, Internationally, the Discovery Channel has more than 3 billion

global cumulative viewers in more than 220 countries and territories

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2. MAKING A BRAND STRONG:
BRAND KNOWLEDGE
 2. MAKING A BRAND STRONG:
BRAND KNOWLEDGE
o Brand knowledge is the key to creating brand equity,
because it creates the differential effect that drives brand
equity
– Marketers need an insightful way to represent how brand
knowledge exists in consumer memory

– The associative network memory model: Memory as a

network of nodes and connecting links, in which nodes
represent stored information or concepts, and links represent
the strength of association between the nodes

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 2. MAKING A BRAND STRONG:
BRAND KNOWLEDGE
o Brand knowledge has two components: brand awareness and
brand image:
– Brand awareness is related to the strength of the brand node
or trace in memory à consumer’s ability to identify the brand
under different conditions

– Brand image has long been recognized as an important

concept in marketing. Brand image is consumers’ perceptions
about a brand, as reflected by the brand associations held in
consumer memory

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 2. MAKING A BRAND STRONG:
BRAND KNOWLEDGE
o What came to mind when you thought of the Apple brand,
what would you say?

Possible Associations with the Apple

Brand
Hyoryung Nam, Yogesh V. Joshi, and P. K.
Kannan, “Harvesting Brand Information from
Social Tags,” Journal of Marketing 81, no. 4
(2017): 88–10

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 2. MAKING A BRAND STRONG:
BRAND KNOWLEDGE

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3. SOURCES OF BRAND EQUITY
 3. SOURCES OF BRAND EQUITY
o CBBE occurs when the consumer has a high level of
awareness and familiarity with the brand and holds some
strong, favorable, and unique brand associations in
memory

o In some cases, brand awareness alone is enough to create

favorable consumer response (e.g. low-involvement
decisions)

o In most other cases, the strength, favorability, and uniqueness

of brand associations play a critical role

à Marketers must convince consumers that there are

meaningful differences among brands!
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 3. SOURCES OF BRAND EQUITY
1/ Brand awareness
– Brand recognition is consumers’ ability to confirm prior
exposure to the brand when given the brand as a cue
– Brand recall is consumers’ ability to retrieve the brand from
memory when given the product category, the needs fulfilled by
the category, or a purchase or usage situation as a cue

– Research reveals that many consumer decisions are made at

the point of sale à brand recognition is very important
– If consumer decisions are mostly made in settings away from
the point of purchase à brand recall will be more important

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 3. SOURCES OF BRAND EQUITY
o Advantages of Brand Awareness?
1. Learning advantages: Brand awareness influences the
formation and strength of the associations that make up the
brand image
2. Consideration advantages: Raising brand awareness
increases the likelihood that the brand will be a member of the
consideration set
3. Choice advantage: Brand awareness can affect choices
among brands in the consideration set, even if there are
essentially no other associations to those brands

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 3. SOURCES OF BRAND EQUITY
o Establishing Brand Awareness
– Increasing the familiarity of the brand through repeated
exposure
– The more a consumer experiences the brand by seeing it,
hearing it, or thinking about it, the more likely he or she is to
strongly register the brand in memory
– Anything that causes consumers to experience one of a brand’s
element can increase familiarity and awareness of that brand
element

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 3. SOURCES OF BRAND EQUITY
2/ Brand image
- Once a sufficient level of brand awareness is created, marketers
can put more emphasis on crafting a brand image
- Brand associations may be either brand attributes or benefits
- Brand attributes are descriptive features that characterize a
product or service (product related/ or not)
- Brand benefits are the personal value and meaning that
consumers attach to the product or service attributes (functional,
symbolic, experiential)
- Marketers need to make sure that some strongly held brand
associations are not only favorable but also unique and
distinct from competing brands

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 3. SOURCES OF BRAND EQUITY
o Strength of Brand Associations
– The more deeply a person thinks about product information and
relates it to existing brand knowledge, the stronger the resulting
brand associations will be
– Two factors strengthen association: 1/ its personal relevance
and 2/ the consistency with which it is presented over time
§ Direct experience, word-of-mouth, advertising

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 3. SOURCES OF BRAND EQUITY
o Favorability of Brand Associations
– Marketers create favorable brand associations by convincing
consumers that the brand possesses relevant attributes and
benefits that satisfy their needs and wants
– Brand associations may be situation-or context-dependent
and vary according to what consumers want to achieve in that
purchase or consumption decision

Fast, reliable, and

convenient, with purple and Less expensive option
orange packages

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 3. SOURCES OF BRAND EQUITY
o Uniqueness of Brand Associations
– The essence of brand positioning à the brand has a
sustainable competitive advantage or unique selling
proposition that gives consumers a compelling reason why
they should buy it
– Make it explicit through direct comparisons with competitors, or
marketers may highlight it implicitly
– They may base it on performance-related or nonperformance-
related attributes or benefits
– Unique associations are critical to a brand’s success. Most
likely, some associations are shared with other brands

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 IN SUMMARY…

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4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o Brand positioning is at the heart of marketing strategy
– The act of designing the company’s offer and image so that it
occupies a distinct and valued place in the target customer’s
mind
– Finding the proper location in the minds of a group of
consumers or market segment, so that they think about a
product or service in the right or desired way to maximize
potential benefit to the firm

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o Identifying the consumer target is important

o A market is the set of all actual and potential buyers who

have sufficient interest in, income for, and access to a product

o Market segmentation divides the market into distinct groups

of homogeneous consumers who have similar needs and
consumer behavior, and who thus require similar marketing
programs and tactics

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING

https://www.kameleoon.com/en/blog/segmentation-audience

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o Geographic criteria
– This type of segmentation is based on the geolocation of your
visitors and is one of the simplest criteria à To target your
marketing actions based on where your visitors are or on
weather conditions

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o Demographic criteria
– The most commonly used criteria, since it requires information
that can be collected easily and that enable you to quickly target
a potential market (gender, age, nationality, education,
profession, income or family situation.)

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o Psychographic criteria
– Focuses on the lifestyle of visitors: their interests,
personalities, values, beliefs and opinions. To obtain this
kind of information, you’ll usually need to have your visitors
complete questionnaires or surveys.

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o Behavioral criteria
– Behavioral segmentation relies on consumers’ behaviors
§ Online: time spent on the website, pages visited, point of exit,
purchase opportunity (urgent or not), purchase attitude, brand
loyalty (registering for newsletters), search engine and device
used, traffic source, etc.
§ Offline: number of visits, purchase history, date and amount of
latest orders (RFM)

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o A number of criteria have been offered to guide segmentation
and target market decisions:
– Identifiability: Can we easily identify the segment?
– Size: Is there adequate sales potential in the segment?
– Accessibility: Are specialized distribution outlets and
communication media available to reach the segment?
– Responsiveness: How favorably will the segment respond to a
tailored marketing program? The obvious overriding
consideration in defining market segments is profitability

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o Nature of competition
1. Market leader: The market leader is the most powerful one
among the 4 types of competitors
2. Market challengers: may not be the most powerful ones in an
industry, but can still be the most dangerous ones due to their
aggressiveness
3. Market followers: firms that just play along
4. Market nichers: firms in an industry that serve small segments
that the other firms overlook or ignore

o Indirect competition
– Competition often occurs at the benefit level rather than the
attribute level

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 4. IDENTIFYING AND ESTABLISHING
BRAND POSITIONING
o Points-of-difference and points-of-parity associations
– Points-of-difference (PODs) are formally defined as attributes or
benefits that consumers strongly associate with a brand,
positively evaluate, and believe that they could not find to the
same extent with a competitive brand
§ performance attributes, performance benefits, imagery
associations, both performance and imagery

– Points-of-parity associations (POPs) are not necessarily unique

to the brand but may, in fact, be shared with other brands.
§ category, competitive, and correlational

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5. DEFINING A BRAND MANTRA
 5. DEFINING A BRAND MANTRA
o In many cases, however, brands span multiple product
categories, and therefore, may have multiple distinct (yet
related) positionings
– To better establish what a brand represents, marketers will often
define a brand mantra
§ Three-to five-word phrase that captures the irrefutable essence or
spirit of the brand positioning
§ To ensure that all employees and external marketing partners
understand what the brand most fundamentally is to represent to
consumers
§ Brand mantras help the brand present a consistent image

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 5. DEFINING A BRAND MANTRA
o Designing a Brand Mantra
– Brand mantras must economically communicate what the brand
is and what it is not

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ALL GOOD?
GROUP WORK
 KEY POINTS OF THE SESSION
o Customer-based brand equity is the differential effect that brand knowledge has on
consumer response to the marketing of that brand. A brand has positive customer-
based brand equity when customers react more favorably to a product and the
way it is marketed when the brand is identified than when it is not

o We can define brand knowledge in terms of an associative network memory

model, as a network of nodes and links wherein the brand node in memory has a
variety of associations linked to it. We can characterize brand knowledge in terms
of two components: brand aware-ness and brand image. Brand awareness is
related to the strength of the brand node or trace in memory, as reflected by
consumers’ ability to recall or recognize the brand under different conditions. It has
both depth and breadth. The depth of brand awareness measures the likelihood
that consumers can recognize or recall the brand. The breadth of brand awareness
measures the variety of purchase and consumption situations in which the brand
comes to mind. Brand image is consumer perceptions of a brand as reflected by
the brand associations held in consumers’ memory

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 KEY POINTS OF THE SESSION
o Customer-based brand equity occurs when the consumer has a high level of awareness and
familiarity with the brand and holds some strong, favorable, and unique brand associations in
memory. In some cases, brand awareness alone is sufficient to result in more favorable
consumer response—for example, in low-involvement decision settings where consumers
are willing to base their choices merely on familiar brands. In other cases, the strength,
favorability, and uniqueness of the brand associations play a critical role in determining the
differential response making up the brand equity

o Points-of-difference are those associations that are unique to the brand, strongly held, and
favorably evaluated by consumers. Marketers should find points-of-difference associations
that are strong, favorable, and unique based on desirability, deliverability, and differentiation
considerations, as well as the resulting anticipated levels of sales and costs that might be
expected with achieving those points-of-difference

o Points-of-parity, on the other hand, are those associations that are not necessarily unique to
the brand but may, in fact, be shared with other brands. Category points-of-parity
associations are necessary to be a legitimate and credible product offering within a certain
category. Competitive points-of-parity associations negate competitors’ points-of-differences.
Correlational points-of-parity negate any possible disadvantages or negatives that might also
arise from a point-of-differenced
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 KEY POINTS OF THE SESSION
o Finally, a brand mantra is an articulation of the heart and soul of the brand, a three-
to five-word phrase that captures the irrefutable essence or spirit of the brand
positioning and brand values. Its purpose is to ensure that all employees and all
external marketing partners understand what the brand is, most fundamentally, in
order to represent it with consumers

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