Creating Brand

Equity
 Chapter Questions

 What is a brand and how does branding

work?
 What is brand equity?
 How is brand equity built, measured, and
managed?
 What are the important decisions in
developing a branding strategy?
 Introduction
 One of the most valuable intangible assets
of a firm is its brands.

 Building a strong brand is both an art and a

science.

 It requires careful planning, a deep long-

term commitment, and creatively designed
and executed marketing.
 Introduction

A strong brand commands intense

consumer loyalty—at its heart is a great
product or service.

 In this chapter, we focus on building brand

equity and the benefits we derive from
brand equity.
 Steps in
Strategic Brand Management
 Identifying and establishing brand
positioning
 Planning and implementing brand
marketing
 Measuring and interpreting brand
performance
 Growing and sustaining brand value
 What Is a Brand?

 A brand is a name, term, sign, symbol or

design, or a combination of them, intended
to identify the goods or services of one
seller or group of sellers and to differentiate
them from those of competitors.
 The Role of Brands
1. Identify the maker
2. Simplify product handling
3. Organize accounting
4. Offer legal protection
5. Signify quality
6. Create barriers to entry
7. Serve as a competitive advantage
8. Secure price premium
 What Is Branding?

 Branding is endowing products and

services with the power of the brand.
What Is Brand Equity?

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What Is Brand Equity?

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 What Is Brand Equity?

 Brand equity is the added value

endowed on products and services, which
may be reflected in the way consumers,
think, feel, and act with respect to the
brand.
 What Is Brand Equity?

 There are at least three perspectives from

which to view brand equity:

1. Financial

2. Brand Extensions

3. Consumer Based
What Is Customer Based Brand Equity?
What Is Customer Based Brand Equity?
 What Is Customer Based Brand
Equity?

 Customer-based brand equity is thus

the differential effect brand knowledge has
on consumer response to the marketing of
that brand.

 Positive Customer based Brand Equity

 Negative Customer based Brand Equity
 What Is Customer Based Brand
Equity?
 A brand has positive customer-based brand
equity when consumers react more
favorably to a product and the way it is
marketed when the brand is identified, than
when it is not identified.
 A brand has negative customer-based
brand equity if consumers react less
favorably to marketing activity for the
brand under the same circumstances.
 Advantages of Strong Brands
 Improved  Larger margins
perceptions of  More inelastic
product performance consumer response to
 Greater loyalty price increases
 Less vulnerability  Greater trade
(harmed) to cooperation
competitive  Increased marketing
marketing actions communications
 Less vulnerability to effectiveness
Marketing crises  Possible licensing
opportunities
 What Is a Brand Promise?

 A brand promise is the marketer’s vision

of what the brand must be and do for
consumers.
 What Is a Brand Promise?
 The growth story of Lifebuoy is
an illustration of how the
company has consistently
maintained the brand’s key
promise of health over the
years and yet introduced several
variants and line extensions with
a more generic interpretation of
the brand promise and
contemporary execution of
marketing-mix elements,
keeping in mind the changing
consumer preferences.
Brand Equity Models

Brand Asset Valuator (BAV)

Brandz

Brand Resonance
 BAV Model
 Advertising agency Young and Rubicam (Y&R)
developed a model of brand equity called the
BrandAsset® Valuator (BAV).

 Based on research with almost 8,00,000

consumers in 51 countries, BAV compares the
brand equity of thousands of brands across
hundreds of different categories.

 There are four key components—or pillars—of

brand equity, according to BAV (see Figure
10.1).
 Figure 10.1 BAV Model

Source: Courtesy of BrandAsset® Consulting,

a division of Young & Rubicam.
 BAV Model – Brand Strength

 Energized differentiation measures the degree

to which a brand is seen as different from others,
and its perceived momentum and leadership.
(Leading Indicator/Future Value)

 Relevance How appropriates the brand is to you,

it relates to consideration. (Future
Indicator/Value)
 BAV Model – Brand Stature

 Esteem measures perceptions of quality and

loyalty, or how well the brand is regarded and
respected. (Current Indicator/Value)

 Knowledge measures how aware and familiar

consumers are with the brand. (Current
Indicator/Value)
 High Figure 10.2 Universe of
Brand Performance
Energized Differentiation and Relevance

Leadership
Niche / Momentum
STRENGTH

New/Unfocused Eroding / Declining

Low
STATURE
High
Esteem and Knowledge
 High Figure 10.2 Universe of
Brand Performance
Energized Differentiation and Relevance

Niche / Momentum Leadership

• Known to small audience • Irresistible brand
• Curiosity • High Earnings
STRENGTH

• Interest • High Margin

• Greatest Potential to create
future value

New/Unfocused Eroding / Declining

• Not Well-known brand • High Stature is insufficient
• New Entrants to capture leading position
• Brand loss their way •Unable to differentiate

Low
STATURE
High
Esteem and Knowledge
 High Figure 10.2 Universe of
Brand Performance
Energized Differentiation and Relevance

Bisleri

Bailey’s Bottled Kinley’s

Water
STRENGTH

Category

Pepsi Aquafina
Tata Water Plus

Low
STATURE
High
Esteem and Knowledge
 BAV Model
 Leadership Those brands have become
irresistible, combining high brand strength with
high brand stature. They have high earnings, high
margin power, and the greatest potential to create
future value.

 Eroding/Declinng Those brand show why high

brand stature by itself is insufficient for
maintaining a leading position. They struggle to
overcome what consumer already know about and
expect from them.
 BAV Model

 New/ Unfocused These brands, with both low

brand stature and brand strength, are not well
known among the general population.

 Niche / Momentum These brand have low brand

stature but high brand strength. They have built
some energy and relevance, but known to only a
relatively small audience.
 BrandZ

 Marketing research consultants Millward Brown

and WPP have developed the BrandZ model of
brand strength, at the heart of which is the
Brand Dynamics pyramid.

 According to this model, brand building follows

a series of steps (see Figure 10.3).
 Figure 10.3
Brand Dynamics Pyramid

Source: BrandDynamics™ Pyramid. Reprinted with permission of Millward Brown.

 Figure 10.3
Maaza - Brand Dynamics Pyramid

I Love Maaza…..

Right combination of
Ingredients make it
different than others
40+ years of
experience
It offers me original
taste of Mango.

I Know the brand

Source: BrandDynamics™ Pyramid. Reprinted with permission of Millward Brown.

 BrandZ

 The BrandDynamics Pyramid shows the

number of consumers who have reached each
level.
 Bonding. Rational and emotional attachments
to the brand to the exclusion of most other
brands
 Advantage. Belief that the brand has an
emotional or rational advantage over other
brands in the category
 BrandZ

 Performance. Belief that it delivers

acceptable product performance and is on the
consumer’s short-list
 Relevance. Relevance to consumer’s needs,
in the right price range or in the consideration
set
 Presence. Active familiarity based on past
trial, saliency, or knowledge of brand promise
 There are more consumers at the lower levels,
so the challenge for marketers is to help them
move up.
 Figure 10.4 Brand Resonance
Pyramid

Resonance - the power to evoke enduring images, memories, and emotions

Figure 10.4 Brand Resonance
Pyramid
 Building Brand Equity

1. The initial Choices for the brand elements or

identities making up the brand

2. The product and service and all accompanying

marketing activities and supporting
marketing programs

3. Other associations indirectly transferred to

the brand by linking it to some other entity
(leveraging brand equity)
 1. Brand Elements

 Brand names
 Slogans
 Characters Amul – The Taste of India
 Symbols
 Logos
 URLs

www.amul.com
1. Brand Element Choice Criteria

Memorable

Meaningful

Likeable

Transferable

Adaptable

Protectable
 1. Slogans

 The Complete Man (Raymond)

 The Joy of Flying (Jet Airways)
 God’s Own Country (Kerala Tourism)
 2. Designing Holistic Marketing Activities

 Marketers are building brand equity through

new avenues such as clubs and consumer
communities, trade shows, event marketing,
sponsorships, public relations, internet
marketing, advertising, sales promotions, etc…
together known as Integrated Marketing
Communication.

 Integrated Marketing is about mixing and

matching these activities to maximize their
individual and collective effects.
3. Leveraging Secondary Association

Secondary Sources of Brand Knowledge

Other Brands:
Dell Leverage the equity of
brand Intel (processor)

People:
Loreal Leverage the equity of
Aishwarya Rai

Places:
Volkswagen take the pride of
German Automobile company

Things:
Pepsi has leverage its event
through IPL
 Internal Branding

 Choose the right moment

 Link internal and external marketing
 Bring the brand alive for employees
Figure 10.6 Brand Value Chain

Source: Kevin Lane Keller, Strategic Brand Management, 3rd ed. (Upper Saddle River, NJ:
Prentice Hall, 2008). Printed and electronically reproduced by permission of Pearson Education,
Inc. Upper Saddle River, New Jersey.
 Measuring Brand Equity

 Brand audits(evaluate health of the brand)

 Brand tracking (Collect quantitative data from

consumers)

 Brand valuation (estimating total financing value)

 Table 10.4
The 10 Most Valuable Brands

Ranking
2017

Ranking
2015

http://www.forbes.com
 Managing Brand Equity

1. Brand Reinforcement

2. Brand Revitalization
 Managing Brand Equity
1. Brand reinforcement

 The Brand Reinforcement majorly

focuses on maintaining the Brand
Equity by keeping the brand alive among
both the existing and new customers.

 Ex: Coca Cola's "open happiness"

proposition across the globe
Managing Brand Equity
 Managing Brand Equity
2. Brand revitalization

 A strategy to recapture lost sources

of brand equity and identify and establish
new sources of brand equity. This may
include product modification
or brand repositioning.
Managing Brand Equity
 Devising a Branding Strategy
1. Develop new brand
elements

2. Apply existing brand

elements

3. Use a combination of
old and new
Branding Terms

 Brand line  Line extension

 Brand mix  Category
extension
 Brand extension
 Branded variants
 Sub-brand
 Licensed product
 Parent brand
 Family brand
 Branding Terms
 Brand Line:
 A brand line consists of all products—original
as well as line and category extensions—sold
under a particular brand.
 Ex: Coca cola bottle & Coca Cola Football
 Brand Mix
 A brand mix (or brand assortment) is the set
of all brand lines that a particular seller
makes.
 Ex: HUL
 Branding Terms
 Brand Extension:
 When a firm uses an established brand to
introduce a new product, the product is
called a brand extension.
 Ex: Wipro
 Sub-brand
 When marketers combine a new brand with
an existing brand, the brand extension can
also be called a sub-brand.
 Ex: Sony Vaio
 Branding Terms
 Parent Brand:
 The existing brand that gives birth to a
brand extension or sub-brand is the parent
brand.
 Family Brand
 If the parent brand is already associated
with multiple products through brand
extensions, it can also be called a master
brand or family brand.
 Ex: P&G
 Branding Terms
 Line Extension:
 In a line extension, the parent brand covers a
new product within a product category it
currently serves, such as with new flavors,
forms, colors, ingredients, and package sizes.
 Ex: Liril Ice, Liril 2000, etc…

 Category Extension
 In a category extension, marketers use the
parent brand to enter a different product
category
 Ex: Canon
 Branding Terms
 Branded Variants:
 Many companies are introducing branded
variants, which are specific brand lines
supplied to specific retailers or distribution
channels.
 Ex: Pepsi & Coca Cola

 Licensed Product:
 A licensed product is one whose brand name
has been licensed to other manufacturers
that actually make the product.
 Reasons for Brand Portfolios
 Some other reasons for introducing multiple
brands in a category include
 Increasing shelf presence and retailer
dependence in the store,
 Attracting consumers seeking variety,
 Increasing internal competition within the
firm, and
 Yielding economies of scale in advertising,
sales, merchandising, and distribution.
Brand Extensions: Advantages

 Improved odds (chances) of new-product

success

 Positive feedback effects

Brand Extensions: Disadvantages

 Brand dilution
 Brand confusion
 Damage to parent brand
 Cannibalization
 For Review
 What is a brand and how does branding
work?
 What is brand equity?
 How is brand equity built, measured, and
managed?
 What are the important decisions in
developing a branding strategy?