MKT 510 Lecture Notes - Lecture 2: Unique Selling Proposition, Straddle, Brand Equity

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11 Aug 2016
Mkt 510: Chapter 2
Chapter 2: Customer-based Brand Equity and Brand Positioning
Defining Customer-Based Brand Equity
- Approaches brand equity from the perspective of the consumer (individual
or organization)
- Its crucial to understand the needs and wants of the consumer and then
provide them with a product or program that will satisfy them
- The power of a brand lies in what resides in the minds and hearts of
- Customer-based brand equity (CBBE) – is the differential effect that brand
knowledge has on consumer response to the marketing of the brand
- A brand has positive CBBE when consumers react more favourably to a
product and the way it is marketed when the brand is identified than when in
fact it is not – consumer may be more open for when a new brand line
extension is introduced
- A brand has negative customer-based brand equity if consumers react less
favourably to marketing activity for the brand compared with an unnamed or
factiously named version of the product
- The three main ingredients:
1. Differential effect
- A brand arises through differences in the consumers mind
2. Brand knowledge
- Consumers can’t identify these differences without knowledge to
distinguish between brands
3. Consumer response to marketing
- are measured through perceptions, preferences, and behaviours related to all
aspects of brand marketing
Brand Equity as a Bridge
Brands as a Reflection of the Past
oThe investment into the manufacturing and marketing of the products
must reflect the past as well in terms of relating to what they once
oThe quality of the investment in brand building is the most critical
factor, not the quantity beyond some minimal threshold amount
oIt is easy to overspend
Brands as a direction for the Future
oThe knowledge that marketers create over time dictates appropriate
and inappropriate future directions for the brand – the consumers
basically decide where this brand is going to go
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oEverything the firm can either enhance or detract the brand
oThe marketers that build strong brands have embraced the concept
and use it to its fullest as a means of clarifying, communicating, and
implementing their marketing actions
- Brand knowledge is key in creating brand equity, because it creates
differential effect that drives brand equity
- Associative network memory model: views memory as a network of nodes
and connecting links, in which nodes represent stored information or
concepts, and links represent the strength associated between the nodes
- Any type of information whether is verbal, abstract, or contextual – can be
stored in the memory network
- Brand knowledge has two main components: brand awareness and brand
oBrand awareness: is related to the strength of the brand node or trace
in memory, which we can measure as the consumers ability to identify
the brand under different conditions
oBrand Image: is consumers perception about a brand, as reflected by
the brand associations held in the consumers memory
- Consumer-based brand equity occurs when the consumer has a high level of
awareness and familiarity with the brand and holds some strong, favourable,
and unique brand associations in the memory
- Consumers must not think that all brands are the same
Brand Awareness
- Consists of two elements:
oBrand recognition – is consumers ability to confirm prior exposure to
the brand when given the brand as cue
oBrand recall – the consumers ability to retrieve the brand form
memory when given the product category, the needs fulfilled by the
category, or a purchase or usage situation as a cue
Advantages of Brand Awareness
oLearning advantages
Registering the brand in consumers mind
oConsideration advantages
Consumers must consider your brand when making a purchase
Consideration act – the handful of brands that receive serious
consideration for purchase
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oChoice advantages
Creating a high level of brand awareness will affect the choices
among brands in the consideration set, even if there are
essentially no other associations with the brands
Establishing Brand Awareness
oIncreasing the familiarity of the brand through repeated exposure,
although this is generally more effective for brand recognition than
for brand recall
oThe more the 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
oRepetition increases recognisability, but improving brand recall
requires linkages in the memory to appropriate product categories or
other purchase or consumption cues
oMany marketers use shock advertising as a way to create brand
Brand Image
- in order to create a strong positive brand image it takes marketing programs
that link strong favourable, and unique associations to the brand in memory
- Brand attributes – those descriptive features that characterize a product or
- Brand benefits – are the personal value and meaning that consumers attach
to the product or service attributes
- In order to create a differential response the associations have to be not only
favourable but unique as well
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
Favourability of brand associations
- Marketers create favourable brand associations by convincing consumers
that the brand possesses relevant attributes and benefits that satisfy their
needs and wants, such that they form positive overall brand judgements
Uniqueness of Brand Associations
- The essence of brand positioning is that the brand has a sustainable
competitive advantage or “unique selling proposition” that gives consumers a
compelling reason why they should buy it
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
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