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Chapter 2

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MKT 510
Ida Berger

Chapter 2 —Customer-based Brand Equity (CBBE)  Customer-Based Brand Equity: differential effect that brand knowledge has on consumer response to the marketing of the brand o A brand has positive customer-based brand equity when consumers react more favourably to a product & way it is marketed when the brand is identified than when it is not o Customers are accepting to a new brand if CBBE is positive, thus less sensitive to price increases & withdrawal of advertisement, support or more willing to seek the brand in a new distribution channel  Lets break the definition down to 3 parts 1. “differential effect” o If no difference occurs, then the brand-name product can essentially be classified as commodity or generic version of the product. o Competition will be based on price only 2. “Knowledge about the brand” o What they have learned, felt, seen, & heard about the brand as a result of experience overtime o Brand equity depends on consumers mind 3. “Consumers response to marketing” o Makes up brand equity, are reflected in perceptions, preferences, & behaviour related to all aspects of brand marketing  Even knowledgeable consumers in regards to their brand can be mistake during a blind test  Brand Equity as a bridge: o Brand equity provides marketers with a vital strategic bridge from their past to their future o Brands as a reflection of the past  Marketers should consider all dollars spent on manufacturing & marketing products as an investment not expense.  Investment as in what consumers learned, felt, & experienced about the brand  Quality of branding is very critical factor in brand building, not quantity  Brands as directions for the future o Consumers decide where the brad should go based on their belief & attitude towards the brand o Thus, at the end of the day the true value & future prospects of a brand rest with consumers & their knowledge about the brand Making a brand strong: brand knowledge  Brand knowledge o What consumers know & hold in their mind about the brand o Reason, cause & underpinning the response in market o Key to creating brand equity  Consists of brand node in memory with variety of associations to it  Ex. Appleuser friendly, educational, fun, creative, innovative o Creates differential effect that drives brand equity  Associative network memory model: views memory as consisting of a network of nodes & connecting links, in which nodes represent stored information or concept, links represent the strength of association between information or concept o Any type of information can be stored as memory network (verbal, abstract, visual etc)  Brand knowledge can be seen as two components 1. Brand Awareness: related to the strength of the brand node or trace in memory, which can measure consumer’s ability to identify the brand under different conditions  brand recognition  brand recall 2. Brand image: consumers perception about a brand, as reflected by the brand associations held in consumer memory  Strong, favourable, & unique brand associations  Ex// what comes to your mind when you think of Apple computer?  I might say: user friendly, creative, graphics etc  What comes to mind when thinking of apple gives as the brand image Sources of brand equity  CBBE occurs when consumers have a high level of awareness & familiarity with the brand & holds some strong, favourable, & unique brand associations in memory Brand awareness  Brand awareness consists of brand recognition & brand recall performance  Brand recognition– consumers ability to confirm prior exposure to the brand when given the brand cue  Brand recall – consumers ability to retrieve the brand from memory when given the product category, the needs fulfilled by the category, or a purchase or usage situation as a cue Advantage of brand awareness:  Awareness halo o Brands you are more aware of, you have positive associations (you won’t buy it if you don’t know about it)  Learning advantage o Brand awareness influences the formation & strength to make up the brand image o To create brand image, marketers must first establish brand node in memory, the nature of which effects how easily the consumer learns & stores additional brand association  Consideration advantage o Consumers must consider the brand whenever making a purchase o Consideration set: handful of brands that receive serious consideration for purchase o Search has shown consumers aren’t really loyal to a brand  Choice advantage o Affects choices among brands in the consideration set o Consumers buy with what they are more familiar with, brand awareness  Consumer purchase motivation: Consumers are unmotivated when they don’t the difference between brands o Ex// they don’t know one gasoline is better than other, they just notice they all the same price, thus unmotivated to go for a particular brand  Consumer purchase ability: Consumers don’t have the knowledge or experience to judge quality of brands from the same category o Product quality is difficult to judge without a real deal of prior experience & expertise o Thus purchase the brand they are most familiar with or the shortcut Establishing Brand Awareness:  The more consumers experience (hear, see etc) the brand they will recognize it (brand recognition), a lot easier then brand recall  Repetition increases recognition, but improving brand recall will require linkage in memory to appropriate product category  Brand elements (slogan, logo, symbols, characteristic, etc) aid brand recall  Can create brand awareness by increasing familiarity of brand through repeated exposure (for brand recognition) & forging strong association with appropriate product category or other relevant purchase (for brand recall) Brand image:  Creating a positive brand image takes marketing programs that link strong, favourable, & unique associations to the brand in memory  Strength of brand associations: o Brand attributes: descriptive features that characterize a product or service o Brand benefits: personal value & meaning that consumer attach to the product or service attributes  Favorability of brand association o Favourable associations for a brand are those that are desirable to consumers & successfully delivered o Desirability : depends on three factors: how relevant, distinctive & believable consumer find the brand association o Deliverable: depends on three factors: the actual/potential ability of the product to perform, current/future prospects of communicating that performance, & sustainability of actual/communicated performance over time  Uniqueness of brand association o Unique selling prospection giving consumers reason to buy their brand Building a strong brand: the 4 steps of bran
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