MGMC11H3 Chapter Notes - Chapter 2: Brand Equity, Brand Awareness, Target Market

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MGMC11 – Chapter 2: Customer-Brand Based Equity and Brand Positioning:
-Positioning – requires defining our desired or ideal brand knowledge (BK) structures and establishing points-of-
parity and points-of-difference to establish the right brand identity ad brand image
-Points-of-differences (PODs) – provide a competitive advantage and the “reason why” consumers should buy
the brand
-Points-of-parity (POPs) – negate potential PODs for competitors; “no reason why not” for consumers to choose
the brand
Customer-Based Brand Equity:
-Customer-based brand equity (CBBE) – the differential effect that brand knowledge has on consumer response
to the marketing of that brand
oBrand equity in the perspective of the consumer (individual, organization, or prospective consumer)
oPower of a brand lies in what resides in the minds and hearts of customers
o+ CBBE  when consumers react more favourably to a product and the way it is marketed when the
brand is identified and when it is not
o– CBBE  consumers react less favourably to marketing activity for the brand compared with an
unnamed or factiously named version of the product
o“differential effect”
Brand equity (BE) results from differences in consumer response
No differences  product is viewed as a generic version of the commodity & competition by
price only
o“brand knowledge (BK)”
Differences derive from consumers’ knowledge about the brand  experiences w/ the brand
over time
BE depends on what resides in the minds and hearts of consumers
o“consumer response to marketing”
Customer differential responses are reflect in perceptions, preferences, and behaviour related
to all aspects of brand marketing
i.e. brand recall  from an ad, response to a sales promo, evaluations of proposed brand ext.
- Brands as a reflection of the past:
oShould consider $ on manufacturing and marketing products each year as “investments” rather than
“expenses” w/ consumers experiences with the brand
oQuality of the investment in brand building is more critical than quantity
Could spend lots of $ but fail to generate BE due to poorly designed & implemented marketing
- Brands as a direction for the future:
oBrand knowledge created over time dictates appropriate/inappropriate future directions for the brand
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i.e. true value and future prospects of a brand depends w/ customers and their BK
oBE can offer focus and guidance  interpret past marketing performance and design future marketing
oAction taken by the firm can help enhance or detract from BE
Making a Brand Strong: Brand Knowledge:
-Associative network memory model – views memory as a network of nodes and connecting links, in which
nodes represent stored info or concepts, and links represent the strength of association between the nodes
oAny type of info can be stored  verbal, abstract, contextual
- BK consisting of a brand node in memory with associations linked to it:
oBrand awareness – related to the strength of the brand node or trace in memory, which we can
measure as the consumer’s ability to identify the brand under different conditions  sometimes building
oBrand image – consumer’s perceptions about a brand, as reflected by the brand associations held in
consumer memory; brand associations are the other info nodes linked to the brand node in memory and
contain the meaning of the brand for consumers
Image can vary depending on the consumer/market segment
Sources of Brand Equity:
-CBBE 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 memory
- Sometimes, brand awareness alone is enough to create favourable consumer response:
oLow-involvement decisions  consumers willing to base their choices on mere familiarity
- Most of the time, BE is critical for differential responses  strength, favourability, and uniqueness of brand
- If consumers perceive the brand as only representative of the product/service category, respond as if the
offering were unbranded
-Brand awareness (BA):
oBrand recognition – consumers’ ability to confirm prior exposure to the brand when given the brand as
a cue
Important in settings such as point of purchase (brand is physically present and visible)
oBrand 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
Important in settings away from point of purchase (brand is physically present and visible)
- Advantages of BA:
oLearning advantages  BA influences the formation and strength of the associations that make up the
brand image  must establish a brand node in memory 1st to create a brand image
oConsideration advantages  consider the brand whenever they are making a purchase
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Consideration set – the handful of brands that receive serious consideration for purchase
Brand in a consideration set makes other brands less likely to be considered or recalled
oChoice advantages  creating a high level of brand awareness that can affect choices among brands in
the consideration set
i.e. low-involvement situations  min. level of BA may be sufficient for product choice
-Elaboration-likelihood model (attitude change and persuasion)  consistent with the notion that consumers
may make choices based on BA considerations when they have low involvement
oConsumer purchase motivation  lack of perceived differences among brands in a category is likely to
leave consumers unmotivated about the choice process
oConsumer purchase ability  using shortcuts (heuristic) to make decisions in the best manner possible
- Establishing BA:
oCreating BA means increasing the familiarity of the brand through repeated exposure (i.e. ↑ consumer
experiences with the brand)
oExposure to brand’s elements: name, symbol, logo, character, packaging, etc.
oThe more elements marketers can reinforce, usually the better BA
oImproving brand recall requires linkages in memory to appropriate product categories or other
purchase/consumption cues
How they pair the brand and product category helps determine the strength of the product
category links
-Brand image (BI):
oBrand attributes – descriptive features that characterize a product or service
oBrand benefits – personal value and meaning that consumers attach to the product or service attributes
oCBBE does not distinguish between the source of brand associations and how they are formed  can
form brand associations (BAS) in a variety of ways other than marketing activities:
Direct experience
Through info from other commercial or nonpartisan sources
From WOM
Assumptions or inferences consumers make
oCreate differential response that leads to CBBE  brand associations need to be favourable and unique
Unique associations help consumers choose the brand
Choosing unique and favourable associations  analyze consumer/competition for best
positioning for the brand
- Characteristics of brand associations (BAS):
oStrength  deeper thinking about product info and how it relates to existing BK = stronger BAS
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