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Chapter 2

Chapter 2 Customer-Based Brand Equity and Brand Positioning.docx

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Ryerson University
MKT 510
Ida Berger

MKT510 Innovations In Marketing CHAPTER 2 Customer-Based Brand Equity and Brand Positioning WHAT IS A BRAND  Three models that help devise marketing strategies and tactics to maximize profits and long-term brand equity and track progress o Brand positioning model: how to guide integrated marketing to maximize competitive advantages o Brand resonance model: how to create intense, activity loyalty relationships with customers o Brand value chain: trace value creation process for brands, to better understand financial impact of brand marketing expenditures and investments  Positioning requires defining desired or ideal brand knowledge structures and establish points-of-parity and points-of- differences to establish right brand identity and brand image o POPs provide competitive advantage and “reason why” customers should buy the brand o PODs brand associations roughly favourable as those of competing brands CUSTOMER-BASED BRAND EQUITY  Customer-based brand equity (CBBE): differential effect that brand knowledge has on consumer response to marketing of that brand  Three ingredients to this definition 1. Differential effect where products are not classified as commodity or generic version of product 2. Brand knowledge where differences in response are result of consumers’ knowledge about brand 3. Customer response to marketing which make up brand equity, are reflected in perceptions, preferences, and behaviour related to all aspects of brand marketing Brand Equity as a Bridge  Quality of investment in brand building is most critical factor, not quantity beyond some minimal threshold amount  Brand knowledge marketers create over time dictates appropriate and inappropriate future direction for brand MAKING A BRAND STRONG: BRAND KNOWLEDGE  Associative network memory model: views memory as network of nodes and connecting links, in which nodes represent stored information or concepts, and links represent strength of association between nodes  Consider brand knowledge has having two components 1. Brand awareness: strength of brand node or trace in memory, which we can measure as consumer’s ability to identify brand under different conditions 2. Brand image: consumers’ perceptions about a brand, as reflected by brand associations held in consumer memory SOURCE OF BRAND EQUITY  CBBE occurs when consumer has high level of awareness and familiarity with brand and holds some strong, favourable, and unique brand association in memory o Strength, favourability, and uniqueness of brand association play critical role in determining differential response Brand Awareness  Brand recognition: consumers’ ability to conform prior exposure to brand when given brand as a cue  Brand recall: consumers’ ability to retrieve brand from memory when given product category, needs fulfilled by category, or purchase or usage situation as a cue  Three advantages to brand awareness 1. Learning advantage – influences formation and strength of associations that make up brand image 2. Consideration advantage – consider brands when making a purchase for which it could be acceptable or fulfilling a need it could satisfy  Consideration set: handful of brands that receive serious consideration for purchase 3. Choice advantages – creating high level of brand awareness that can affect choices among brands on consideration set, even if there are essentially no other associations to those brands  Elaboration-likelihood model: consistent with notion that consumers may make choices based on brand awareness considerations when they have low involvement o Consumer purchase motivation – lack of perceived differences among brand in category is likely to leave consumers unmotivated about choice process MKT510 Innovations In Marketing o Consumer purchase ability – consumers in some product categories do not have necessary knowledge or experience to judge product quality even if they are desired  Creating brand awareness means increasing familiarity of brand through repeated exposure (effective for brand recognition than brand recall)  Attempted to create brand awareness through so-called shock advertising, using bizarre themes Brand Image  Brand attributes: descriptive features that characterize a product or service  Brand benefit: personal value and meaning that consumers attach to product or service attributes  Create differential response that leads to customer-based branding equity, marketers need to make share that some strongly held brand associations that are not favourable but also unique and not shared with competing brands  Factors of association: 1. Strength of brand awareness  Existing brand knowledge means stronger resulting brand associations  Two factors that strengthen association to any piece of information are personal relevance and consistency with which it is presented over time  Use creative communications that cause customers to elaborate on brand-related information and related it appropriately to existing knowledge 2. Favourability of brand awareness  Favourable brand association by convincing consumers that brand possesses relevant attributes and benefits that satisfy their needs and wants  May only be situation or context-dependent 3. Uniqueness of brand association  Sustainable competitive advantage that gives consumers compelling reason why they should buy  Make difference explicit through direct comparison with competitors or implicitly; performance- related or non-performance-related attributes IDENTIFYING AND ESTABLISHING BRAND POSITIONING Basic Concept  Brand positioning: act of designing company’s offer and image so that it occupies distinct and valued place in target customer’s minds  Deciding on positioning requires determining frame of reference and optimal POP and POD brand associations Target Market  Market: set of all actual and potential buyers who have sufficient interest in, income for, and access to product  Market segmentation: divides market into distinct groups of homogeneous consumers who have similar needs and consumer behaviour o Requires trade-offs between costs and benefits  Two possible segmentation bases for customers and B2B markets: 1. Descriptive or customer-oriented – what kind of person or organization the customer is 2. Behavioural or product-oriented – how customer thinks of or uses brand or product  Classic “funnel” model traces consumer behaviour in terms of initial awareness through brand-most-often used o For branding purposes, marketers want to understand percentage of target market that is present at each stage and factors facilitating or inhibiting transition from one stage to the next  Number of criteria to guide segmentation and target market decisions: identifiablility, size, accessibility, responsiveness Nature of Competition  Competitive analysis considers various factors – including resources, capabilities, and likely intentions of various other firms – to choose markets where customers can be profitable  Firms narrowly define competition and fail to recognize the most compelling threats and opportunities o Competition often occurs at the benefit level rather than attribute level  More than one frame of reference because of broader category competition or intended future gr
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