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Customer-based Brand Equity
and Brand Positioning
MKT 465: Ch 2
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Ch
Heads 1. Customer-based
Brand Equity (CBBE)
2. Sources of Brand Equity
3. Brand Positioning 4. Establishing
Positioning 5. Positioning
Guidelines 6. Brand Mantra
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1. Customer-based Brand Equity (CBBE)
3 constructs of Brand EquityCreating the Brand Differential Effect : Generic (price based competition) vs Brand (Value based competition) Creating Brand Knowledge Ensuring Positive Response: reflected on Perception, Preferences and on behavior: choice, reactions and evaluation)Hitachi vs GE TV
• Satisfying the NWDs of the Target Market
• Power of a brand lies in what customers have Learned, Felt, Seen. Heard and have Experienced
• CBBE is The differential effect that Brand knowledge has on Customer Response – Positive Equity:
favorable Response (P’s)
– Negative Equity: unfavorable Response (P’s)
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1. Customer-based Brand Equity (CBBE)
Advantages of Strong Brands
• Better Perceptions • Greater Loyalty • Larger Margins• Less vulnerability to
Competitive Marketing Actions and Market Threats
• Inelastic response to price increase and Elastic response to price decrease
• Brand Extension and Expansion opportunities
• Greater Trade/ Gvt Support
Investment should
be focused on
quality building
but the quantity
of investment
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2. Sources of Brand Equity (CBBE)
CBBE occurs when
A. the consumer has a high
level of awareness
and familiarity with
the brand and
B. holds some strong,
favorable and unique
brand associations in
memory These are also known as the
components of Brand
Knowledge
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2. Sources of Brand Equity (CBBE)
A. Awareness: Brand Recognition and Recall: low involvement product
• Recognition: familiarity upon exposure (plays an important role at Point of Purchase decision making )
• Recall: Retrieve from memory : product category wise (plays an important role if the decisions are made away from Point of Purchase)
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2. Sources of Brand Equity (CBBE)
Advantages of awareness :
Learning: the first step of building equity is to register
the brand in the minds of consumers
Consideration : raising awareness increases the
likelihood that the brand will be the member of the
evoke set
Choice: high level of awareness leads to fav decision
making ( especially for the low involvement products:
lack of purchase motivation: low differentiation or low
ability to judge ) Establishing Brand Awareness: Repeated Exposer: of brand elements through IMC
Experiences: Marketing MixComparison and Parity
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B. Brand Image: strong, favorable n
unique Association with Brand
Personalities: attribute
(USP)/benefit/value/personality based
nodes. Generates beliefs
Strength of Association depends on
personal relevance, experiences ( WOM+
company controlled sources of info)
Brand Associations may be situation or
context dependent and vary according to
what customer what to achieve in that
purchase decision.
2. Sources of Brand Equity (CBBE)
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• The Harley Davidson: rugged, macho, freedom-seeking. • Nike: High ambition, young, will for victory, performance, attitude, excitement.• Adidas: hardworking, muscularity, down to earth, confidence• Thumbs up : bravery / daring• Liril : freshness & Lime• Lux : Beauty, softness• Dove : Softness• Bisleri : Safety• Bajaj Pulsar : Power • Yamaha : Power • Titan : Style, elegance• Cinthol : Freshness• Pepsi: fun, sporty, music, high energy• Coke: emotional bonding, happiness, to inspire moments of optimism and uplift• BMW: performance, experience sophisticated, stylish, dominant, sporty &
aggressive • Benz: elegant, prestigious , excellence, luxury, traditional. • Audi: progressive, creative, socially inspirational, innovative• Blackberry: professional, classy, independent • Nokia: amateur, fun, colors, relations• Vodafone: faithful, always following.
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2. Sources of Brand Equity (CBBE)
2 factors of the strength of Brand
association
The more deeply a person thinks about product
information and relates it to existing brand knowledge,
the stronger the resulting brand associations will be.
a. Personal Relevance
b. Consistency
Favorability of Brand Association : • By convincing consumers that the brand possesses relevant attributes and benefits that satisfy their NWDs • All Brand Associations are not equally imp to the cus.• Association is context/situation dependent.
Uniqueness of Brand Association• BA is based on USP
either by PODs/POPs or directly
• POP is done for category association
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3. Brand Positioning
Brand Positioning Positioning is designing company’s offerings and image in such a way that is occupies a distinctive place in the minds of the target customers.
You must establish a mission for the brand and a vision of what the brand must be and do!
3 levels of Positioning: A. Positioning by Product Attributes: Pampers,
Colgate, Comtrex, Ritz Carlton Hotel (luxury), Motel 6 (economy) etc
B. Positioning by Product Benefits: Fair and Lovely, Nike (performance), Volvo (safety)
C. Positioning by creating Values and Beliefs: Starbucks, Cadbury, Coke, GP.
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4. Establishing Brand PositioningDeciding on Positioning require determining Three dimensions I. Market Segments II. Competitors and Nature of Competition III. Points of Parity (POPs) and Points of Difference (PODs)
III. Points of Parity (POPs) and Points of Difference (PODs)• Category• Competitive• Co-relational PODs : USP based and requires ‘proof points/ reasons to believe (RTB)
II. Competitors and Nature of Competition
Frame of References should both market and industry competitors
I. Market Segments
Behavioral Segments are
often most valuable in
understanding branding
issues as they have
clearer strategic
implications
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4. Establishing Brand PositioningI. Market Segments The more finely segmented the market, the more likely that the firm will be able to implement marketing progs that meet the NWDs of cus.Different segment might have different perception and pref for the brand. Demo: Ponds, L'Oreal facewash, GPBehavioral: L'Oreal, Sunsilk Shampoo
II. Nature of Competition
• Direct vs indirect• Multiple frames of refShampoo with Hair OilStarbucks : DD, Nescafe, Local Café III. POPs/PODsPODs: unique value: IKEA, SONY, British AirwaysPOPs: Category: basic VP s for Café POPs: Competitive : BE at some VP+ some unique VP
POPs: Correlational: low price vs high qualityTaste vs low CalVaried vs simple
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5. Brand Positioning Guidelines Developing Positioning I. Defining and Communicating the Competitive Frame of Ref:II. Choosing PODsIII. Establishing PODs and POPs IV. Straddle Positions
I. Defining and Communicating the Competitive Frame of Ref
Establishing Category Membership by • Communicating Category Benefits: (POPs
and PODs based): better be convincing • Exemplars: ( new/ controversial brands) • Product Descriptor: brand elements should
be selected accordingly
For a established product but at introductory stage ,CM is not the focal
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5. Brand Positioning Guidelines Developing Positioning I. Defining and
Communicating the Competitive Frame of Ref:
II. Choosing PODs
III. Establishing PODs and POPs
IV. Straddle Positions
II. Choosing PODs
3 considerations decide
attributes to serve the PODs
• Desirability ( attributes that
customer desires: important n
relevant to them)
• Deliverable ( companies
capabilities to serve VPs and
efficiency to convenience the
customers )
• Differentiating ( relative to
competition n sustainable
differences must matter to
consumers)
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5. Brand Positioning Guidelines Developing Positioning I. Defining and Communicating the Competitive Frame of Ref:
II. Choosing PODsIII. Establishing PODs and POPs IV. Straddle Positions
III. Establishing PODs and POPs
• Separate the PODs and POPs through separate and strong IMC campaigns
• Leverage the Equity of another Entity : ingredient based/ celebrity and experts endorsements
• Redefine the Relationship
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5. Brand Positioning Guidelines Developing Positioning I. Defining and Communicating the Competitive Frame of Ref:II. Choosing PODsIII. Establishing PODs and POPs IV. Straddle Positions
IV. Straddle Positions
Simultaneous POP n POD but
with different competitions.
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Cadillac: Lacking performance
Corvette: lacking elegance
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6. Brand Mantra: Communicate, Simplify and Inspire
Brand Mantra is a short, three to five word phrases that captures the irrefutable essence or spirit of brand positioning. Also Known as Brand Essence or Core Brand Promise/ Personality
It works as a guidelines to the external and internal people of the company
Better be consistent
Three Constructs of Brand Mantra
Brand Functions: nature of the brand attributes/benefits/ experiences the Brand provides. Disney: Entertainment Descriptive Modifier: further clarifies its nature . Disney: FamilyEmotional Modifier: how exactly the brand provides benefits : Disney: fun