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Chapter 2

Chapter 2

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MKT 510
Marla Spergel

th Thursday September 13 , 2012 Chapter 2: Customer Based Brand Equity Customer Based Brand Equity: -customer based brand equity model (CBBE) incorporates theoretical advances and managerial practices in understanding and influencing consumer behavior -CBBE model provided unique point of view as to what brand equity it and how it should be built, measured and managed the model approaches brand equity from the perspective of consumers (individuals or an organization) -the basic premise of the model is the power of a brand that lies in what customers have learned, felt, seen and heard about the brand as a result of their experience -challenge for marketers is to build a strong brand, ensure that customers have the right type of experience with products and service so that the desired thoughts, feeling, image, beliefs, perception becomes linked with the brand -“customer based brand equity” is the effect that brand knowledge has on consumer response • Brand has “positive” customer based brand equity when consumers react more favorable to a product and the way it is marketed when the brand is identified and willing to seek the brand in a new distribution channel • Brand has “negative” customer based equity when consumers react less favorably to marketing activity for the brand compared with an unnamed version of the product -3 key ingredients to the definition: • Differential Effect: differences in consumer response • Brand Knowledge: result of consumers knowledge about the brand • Consumer response to marketing: choice of brand, response to a sales promotion etc Making a Brand Strong: Brand Knowledge- has two components: brand awareness and brand image -brand knowledge is the key to creating brand equity because it creates differential effect that drives brand equity -“Brand 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 -“Brand Image” is consumer’s perception about a brand, reflected by brand associations held in consumer’s memory th Thursday September 13 , 2012 -Example: • Apple – through skillful marketing, Apple has been able to achieve a rich brand imagine made up of a host of brand associations (Apple is user friendly, educational, fun, creative, cool, innovative etc) • McDonalds – creates brand association in consumers minds between its produdy and “quality, service, cleanliness and vale” Sources of Brand Equity -customer based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favorable and unique brand associations in memory -sometimes brand awareness alone is enough to create favorable consumer response -the strength, favorability and uniqueness of brand associations play a critical role in determining the differential response that makes up brand equity -marketers also need to convince consumers that there are meaningful differences among brands -consumers must not think that all brands in the category are the same -important to establish a positive brand image in consumer memory (strong, favorable and unique) (1) Brand Awareness/Brand Recall/Brand Recog
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