copyright 2009, prentice-hall, inc.8-1 a framework for marketing management chapter 8 creating brand...
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Copyright 2009, Prentice-Hall, Inc. 8-1
A Framework forMarketing Management
Chapter 8Chapter 8Creating Brand Equity
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Chapter Questions
What is a brand, and how does branding work?
What is brand equity, and how is it built, measured, and managed?
What are the important decisions in developing a branding strategy?
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Brand
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.
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The Role of Brands
Identify the maker Simplify decision making and reduce risk Simplify product handling and tracing Organize inventory and accounting Offer legal protection Signify quality Create barriers to entry Secure a competitive advantage Secure price premium
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The Scope of Branding
Branding—endowing products and services with the power of a brand.
It’s all about creating differences between products.
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Brand Equity
Brand equity—the added value endowed on products and services, reflected in how customers think, feel, and act with respect to the brand, as well as in the prices, market share, and profitability the brand commands for the firm.
Customer-based brand equity—the differential effect that brand knowledge has on consumer response to that brand’s marketing. Arises from customer response. Differences in response are a result of brand knowledge. Differential response is reflected in perceptions,
preferences, and behaviors related to the brand’s marketing.
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Marketing Advantages of Strong Brands Improved perceptions Greater loyalty Less vulnerable to
competitors Less vulnerable to
crises Larger margins More inelastic
responses to price increases
More elastic responses to price decreases
Greater trade cooperation
Increased marketing communication effectiveness
Possible licensing opportunities
Brand extension opportunities
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Brand Promise
The marketer’s vision of what the brand must be and do for consumers.
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Brand Equity Drivers
Brand elements Marketing activities Meaning transference
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Criteria for Choosing Brand ElementsBuilding the Brand Memorable Meaningful Likeability
Defending the Brand Transferable Adaptable Protectible
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Designing Holistic Marketing Activities Personalization—ensuring that the brand
and its marketing are as relevant as possible to as many customers as possible.
Integration—mixing and matching marketing activities to maximize their individual and collective efforts.
Internalization—ensuring employees and marketing partners understand basic branding notions and know how they can help (or hurt) brand equity.
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Leveraging Secondary Associations Linking the brand to other information in
memory that conveys meaning to consumers. Sources:
Other brands Places Things People
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Measuring Brand Equity
Brand audit Brand tracking Brand valuation
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Managing Brand Equity
Brand reinforcement Brand revitalization
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Brand Strategy and Customer Equity Develop new brand elements. Apply existing brand elements. Use a combination of old and new brand
elements.
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Table 8.3: Branding New Products Brand extension Sub-brand Parent brand Family brand Line extension
Category extension Brand line Brand mix Branded variants Licensed product
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Branding Decisions
Individual names Blanket family names Separate family names for all products Corporate name, combined with individual
product names
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Brand Extensions
Advantages Improved odds of
success Positive consumer
expectations Retailer support Leverage current brand
awareness Reduced cost of the
launch campaign Feedback benefits
Disadvantages Brand dilution Risk to brand integrity Risk of harm to parent
brand Cannibalization Lost opportunity to
create a new brand
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Reasons for Multiple Brands in Portfolio To increase shelf presence and retailer
dependence To attract consumers seeking variety To increase internal competition To yield economies of scale
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Brand Roles in a Brand Portfolio Flankers—“fighter” brands. Cash cows—“milk” these brands because
they are profitable. Low-end entry level—attract customers to the
franchise. High-end prestige—high-priced brand used to
add prestige and credibility.
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Customer Equity
The sum of lifetime values of all customers. Customer lifetime value is affected by
revenue and cost considerations related to: Acquisition Retention Add-on spending
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice HallPublishing as Prentice Hall
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