Chapter 11

Creating
Brand Equity
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What is Brand Equity‫؟‬

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PART 1

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 How Does
Branding Work?
• The American Marketing Association
- a brand is “a name, term, sign, symbol, or
design, or a combination of them, intended
to identify the goods or services of one
seller or group of sellers and to differentiate
them from those of competitors.”

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 The Role of Brands
•Brands’ role For Consumers
set and fulfill expectations
reduce risk
simplify decision making
take on personal meaning
become part of identity
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 The Role of Brands
•Brands’ role For Firms
simplify product handling
organize inventory and accounting
offer legal protection
Create brand loyalty
secure competitive advantage
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 The scope of Branding
• Branding
- the process of
endowing products
and services with
the power of a
brand

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 Defining Brand Equity
• Brand equity
- added value endowed to products and services with consumers
TaBle 11.1 Marketing Advantages of Strong Brands
Improved perceptions of product performance Greater trade cooperation and support

Greater loyalty Increased marketing communications effectiveness

Less vulnerability to competitive marketing actions Possible licensing opportunities

Less vulnerability to marketing crises Additional brand extension opportunities

Larger margins Improved employee recruiting and retention

More inelastic consumer response to price increases Greater financial market returns

More elastic consumer response to price decreases

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 Defining Brand Equity
•Customer-based brand equity
- the differential effect brand knowledge has on
consumer response to the marketing of that
brand
differences in consumer response
brand knowledge
perceptions, preferences, and behavior
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 Defining Brand Equity
•Brand promise
- the marketer’s vision of what the brand must be and do for consumers

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 Brand Equity Models

BrandasseT® ValuaTor

Brandz

Brand resonance model

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 Brand Equity Models
• BrandAsset®
ENERGIZED
DIFFERENTIATION
The brand’s point
of difference Relates to RELEVANCE
Valuator margins and cultural
currency
How appropriate the
brand is to you
 ENERGIZED Relates to consideration
and trial
DIFFERENTIATION ESTEEM KNOWLEDGE
How you regard the brand
 RELEVANCE An intimate
Relates to perceptions of understanding of the
 ESTEEM quality and loyalty brand
Relates to awareness and
 KNOWLEDGE consumer experience

BRAND STRENGTH BRAND STATURE

Leading Indicator Future Current Indicator
Growth Value Current Operating Value

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 Figure 11.2
The Universe of Brand Performance

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 Brand Equity Models
• Brandz
meaningful, different, and salient brand associations
Power, premium and potential outcomes

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 Brand Equity Models
• Brand Resonance Model

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PART 2

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 Building Brand Equity
• Brand Equity Drivers

Brand element or identity choice

Product and accompanying

marketing

Other associations

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 Building Brand Equity
• Brand Element Choice Criteria
Memorable

Protectable Meaningful

Adaptable Likable

Transferable

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 Designing Holistic Marketing Activities
• Brand Contact
 Any information-bearing experience, whether
positive or negative, a customer or prospect has
with the brand, its product category, or its market.

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 Leveraging
Secondary Associations

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 Internal Branding
• Activities and processes that help inform
and inspire employees about brands.
Choose the right Link internal and
moment external marketing

Bring the brand

alive for employees Keep it simple

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 Measuring Brand Equity
• Brand Value Chain

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 Measuring Brand Equity

• Brand audit

• Brand-tracking studies

• Brand valuation

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Interbrand Brand Valuation Method

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PART 3

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 Managing Brand Equity

• Brand Reinforcement
- Requires the brand always be moving forward

• Brand Revitalization
- Almost any kind stars with the product

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 Devising a
Branding Strategy
can develop new brand elements for
the new product

can apply some of its existing brand

elements

can use a combination of new and

existing brand elements

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 Devising a
Branding Strategy
• Brand extension • Category extension
• Sub brand • Brand line
• Parent brand • Brand mix
• Master/family brand • Branded variants
• Line extension • Licensed product

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 Branding Decisions
• Alternative Branding Strategies

Individual or separate
family brand names

Corporate umbrella or company

brand name

Sub-brand name

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 Branding Decisions

• House of brands
• A branded house
- Flagship product

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House Of Brands

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Branded House

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 Brand Portfolios
• The set of all brands and brand lines a particular
firm offers for sale in a particular category or
market segment

Flankers Cash cows

Low-end entry level High-end prestige

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 Brand Extensions
• Introducing a host of new products under their
strongest brand names
 Improved Odds of New-Product Success
 Positive Feedback Effects
 Risk of brand dilution
 May harm parent brand
 Firms forgoes creating new brand

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Building Brand Equity
McDonald's Case study

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