CHAPTER 9: MEASURING SOURCES OF BRAND EQUITY: CAPURING CUSTOMER MINDSET

1. CHAPTER 9: MEASURING SOURCES OF BRAND EQUITY: CAPURING CUSTOMER MINDSET Kevin Lane Keller Tuck School of Business Dartmouth College

2. Qualitative Research Techniques • Free association • What do you like best about the brand? What are its positive aspects? • What do you dislike? What are its disadvantages? • What do you find unique about the brand? How is it different from other brands? In what ways is it the same?

3. Free Associations ATTRIBUTES User Imagery Usage Imagery Western, American, blue collar, hard-working, traditional, strong, rugged, and masculine Product-Related Appropriate for outdoor work and casual social situations Blue denim, shrink-to-fit cotton fabric, button-fly, two-horse patch, and small red pocket tag Brand Personality Honest, classic, Contemporary, approachable, independent, and universal LEVI’S 501 High quality, long lasting, and durable Feelings of self-confidence and self-assurance Comfortable fitting and relaxing to wear Functional Symbolic Experiential BENEFITS

4. Qualitative Research Techniques • Projective techniques • Diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express themselves on these matters

5. Projective Techniques • Consumers might feel that it would be socially unacceptable to express their true feelings • Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers • Examples: • Completion and interpretation tasks • Comparison tasks

6. Projective Techniques • Word association tests • Sentence completion method • Third-person technique • Role playing • T.A.T. • Picture frustration version of T.A.T.

7. Expressive Techniques In expressive techniques, respondents are presented with a verbal or visual situation and asked to relate the feelings and attitudes of other people to the situation. Role playing. Respondents are asked to play the role or assume the behavior of someone else. Third-person technique. The respondent is presented with a verbal or visual situation and the respondent is asked to relate the beliefs and attitudes of a third person rather than directly expressing personal beliefs and attitudes. This third person may be a friend, neighbor, colleague, or a “typical” person.

8. Word Association • Subject is presented with a list of words • Asked to respond with first word that comes to mind

9. GREEN Money Lawn Eggs and Ham Word Association Examples

10. CHEESE Kraft Cheddar Goat Word Association Examples

11. Word Association EXAMPLE STIMULUSMRS. MMRS. C washday everyday ironing fresh and sweet clean pure air soiled scrub don't; husband does clean filth this neighborhood dirt bubbles bath soap and water family squabbles children towels dirty wash

12. Completion Techniques In sentence completion, respondents are given incomplete sentences and asked to complete them. Generally, they are asked to use the first word or phrase that comes to mind. A person who shops at Sears is ______________________ A person who receives a gift certificate good for Sak's Fifth Avenue would be __________________________________ J. C. Penney is most liked by _________________________ When I think of shopping in a department store, I ________ A variation of sentence completion is paragraph completion, in which the respondent completes a paragraph beginning with the stimulus phrase.

13. Sentence Completion People who drink beer are ______________________ A man who drinks light beer is ___________________ Imported beer is most liked by ___________________ A woman will drink beer when____________________

14. Completion Techniques Insentence completion, respondents are given incomplete sentences and asked to complete them. Generally, they are asked to use the first word or phrase that comes to mind. A person who shops at Sears is ______________________ A person who receives a gift certificate good for Sak's Fifth Avenue would be __________________________________ J. C. Penney is most liked by _________________________ When I think of shopping in a department store, I ________ A variation of sentence completion is paragraph completion, in which the respondent completes a paragraph beginning with the stimulus phrase.

15. Completion Techniques In story completion, respondents are given part of a story – enough to direct attention to a particular topic but not to hint at the ending. They are required to give the conclusion in their own words.

16. Construction Techniques With a picture response,the respondents are asked to describe a series of pictures of ordinary as well as unusual events. The respondent's interpretation of the pictures gives indications of that individual's personality. In cartoon tests, cartoon characters are shown in a specific situation related to the problem. The respondents are asked to indicate what one cartoon character might say in response to the comments of another character. Cartoon tests are simpler to administer and analyze than picture response techniques.

17. Figure 5.4 Sears Let’s see if we can pick up some house wares at Sears. A Cartoon Test

18. Thematic Apperception Test T.A.T.

19. Thematic Apperception Test (TAT) • Construct a story about what you see on the following picture Describe: - what led up to the scene - what is happening - what the characters in the story might think or feel - how the story will end

20. New approach: ZMET • Zaltman Metaphor Elicitation Technique (ZMET) • ZMET is “a technique for eliciting interconnected constructs that influence thought and behavior.”

21. ZMET • The guided conversation consists of a series of steps that includes some or all of the following: • Story telling • Missed images • Sorting task • Construct elicitation • The most representative picture • Opposite images • Sensory images • Mental map • Summary image • Vignette

22. ZMET • Step 1. Storytelling: Participants describe the content of each picture. • Step 2. Missed Image: Participants describe the picture or pictures that he orshe was unable to obtain and explain their relevance. • Step 3. Sorting Task: Participants sort pictures into meaningful groups andprovide a label or description for each group. • Step 4. Construct elicitation: Participants sort pictures into meaningful groups andprovide a label or description for each group. • Step 5. The Most Representative Picture: Participants indicate which picture is mostrepresentative. • Step 6. Opposite Images: Participants indicate picture that describe theopposite of the brand or the task that they were given. • Step 7. Sensory Images: Participants indicate what does or does not describethe concept in terms of color, emotion, sound, smell, taste, and touch.

23. ZMET • Step 8. Mental Map: After reviewing the entire construct discussed andasking Participants if the constructs are accurate representations ofwhat was meant and if any important ideas are missing, Participantscreate a map or causal model connecting the constructs that havebeenelicited. • Step 9. Summary Images: Participants create a summary image or montageusing their own images (sometimes augmented by images from animages from an image bank) to express important issues. DigitalImaging techniques may be employed to facilitate the creation of theimage. • Step 10. Vignette: Participants put together vignette or short video to helpcommunicateimportantissues.

24. Brand Personality and Values • Brand personality refers to the human characteristics or traits that can be attributed to a brand. • The Big Five • Sincerity (down-to-earth, wholesome, and cheerful) • Excitement (daring, spirited, imaginative, and up-to-date) • Competence (reliable, intelligent, and successful) • Sophistication (upper class and charming) • Ruggedness (outdoorsy and tough) Jennifer Aaker, 1997

25. Identifying Key Brand Personality Associations BUSH KERRY • Coffee Dunkin’ Donuts Starbucks • Technology IBM Apple • Auto Ford BMW • Retail Kmart Target • Fast Food McDonald’s Subway 2004 U.S. presidential election, random sample of undecided voters

26. Experiential Methods • By tapping more directly into their actual home, work, or shopping behaviors, researchers might be able to elicit more meaningful responses from consumers. • Advocates of the experiential approach have sent researchers to consumers’ homes in the morning to see how they approach their days, given business travelers Polaroid cameras and diaries to capture their feelings when in hotel rooms, and conducted “beeper studies” in which participants are instructed to write down what they’re doing when they are paged.

27. Quantitative Research Techniques • Awareness • Image • Brand responses • Brand relationships

28. Awareness • Recognition • Ability of consumers to identify the brand (and its elements) under various circumstances • Recall • Ability of consumers to retrieve the actual brand elements from memory • Unaided vs. aided recall

29. Awareness • Corrections for guessing • Any research measure must consider the issue of consumers making up responses or guessing. • Strategic implications • The advantage of aided recall measures is that they yield insight into how brand knowledge is organized in memory and what kind of cues or reminders may be necessary for consumers to be able to retrieve the brand from memory. • The important point to note is that the category structure that exists in consumers’ minds—as reflected by brand recall performance—can have profound implications for consumer choice and marketing strategy.

30. Image • Ask open-ended questions to tap into the strength, favorability, and uniqueness of brand associations. • These associations should be rated on scales for quantitative analysis.

31. Brand Responses • Research in psychology suggests that purchase intentions are most likely to be predictive of actual purchase when there is correspondence between the two in the following categories: • Purchase Intentions • Action (buying for own use or to give as a gift) • Target (specific type of product and brand) • Context (in what type of store based on what prices and other conditions) • Time (within a week, month, or year)

32. Brand Relationships • Behavioral loyalty • Brand substitutability • Other brand resonance dimensions • For example, in terms of engagement, measures could explore word-of-mouth behavior, online behavior, and so forth in depth

33. Comprehensive Models of Customer-Based Brand Equity • Brand dynamics • Equity engines • Young & Rubicam’s Brand Asset Valuator (BAV)

34. Brand Dynamics • The Brand Dynamics model adopts a hierarchical approach to determine the strength of relationship a consumer has with a brand. • The five levels of the model are: • Presence • Relevance • Performance • Advantage • Bonding

35. Equity Engines • This model delineates three key dimensions of brand affinity—the emotional and intangible benefits of a brand—as follows: • Authority: The reputation of a brand, whether as a long-standing leader or as a pioneer in innovation • Identification: The closeness customers feel for a brand and how well they feel the brand matches their personal needs • Approval: The way a brand fits into the wider social matrix and the intangible status it holds for experts and friends

36. Young & Rubicam’s Brand Asset Valuator (BAV) • There are five key components of brand health in BAV—the five pillars. • Each pillar is derived from various measures that relate to different aspects of consumers’ brand perceptions and that together trace the progression of a brand’s development. • Differentiation • Energy • Relevance • Esteem • Knowledge

37. BrandAsset® Valuator (BAV) • 240,000+ consumers • Up to 181 categories • 137 studies • 40 countries • 8 years • 56 different brand metrics • Common methodology

38. How Brands Are Built Four Primary Aspects • The culmination of brand building efforts; • acquisition of consumer experience Knowledge Esteem • Consumer respect, regard, reputation; a • fulfillment of perceived consumer promise Relevance • Relates to usage and subsumes the five Ps of • marketing; relates to sale Differentiation • The basis for consumer choice; the essence of • the brand, source of margin

39. Healthy Brands Have Greater Differentiation than Relevance D > R 100 90 Examples: Harley Davidson Yahoo! AOL Williams-Sonoma Ikea Bloomberg Business News 80 70 60 50 40 30 20 10 0 Differentiation Relevance Roomto grow... Brand has power to build relevance.

40. Brands with greater Relevance than Differentiation Are in Danger of Becoming Commodities R > D 100 90 Examples: Exxon Mott’s McDonald’s Crest Minute Maid Fruit of the Loom Peter Pan (peanut butter) 80 70 60 50 40 30 20 10 0 Differentiation Relevance Uniqueness has faded; price becomes dominant reason to buy.

41. More Esteem than Knowledge Means, “I’d like to get to know you better” E > K 100 90 Examples: Coach leatherwear Tag Heuer Calphalon Movado Blaupunkt Pella Windows Palm Pilot Technics 80 70 60 50 40 30 20 10 0 Knowledge Esteem Brand is better liked than known.

42. K > E 100 90 80 70 60 50 40 30 20 10 0 Esteem Knowledge Too Much Knowledge Can Be Dangerous:“I know you and you’re nothing special” Examples: Plymouth TV Guide Spam Woolworths Chrysler Maxwell House National Enquirer Sanka Brand is better known than liked.

43. Brand Strength Brand Stature Esteem Knowledge Differentiation Relevance Leading Lagging A Two-Dimensional Framework for Diagnosing Brands: The Power Grid BrandAsset®Valuator

44. Brand Health Is Captured on the PowerGrid Power Leaders Niche/ Unrealized Potential Declining Leaders BRAND STRENGTH (Differentiation and Relevance) Eroded New Unfocused BRAND STATURE (Esteem and Knowledge) Base: USA Total Adults BAV 2000

45. USA 1999 PowerGrid Sample 100 Arizona Iced Tea Aeropostale Newman’s Own Sundance Channel DreamWorks Bloomberg Business News CDnow IKEA Coca-Cola Ocean Spray Nike Pepperidge Farm M&Ms Disney Jeopardy! Hallmark 80 60 BRAND STRENGTH Plymouth Bazooka Ivory Snow Pert Rolaids Keds Howard Johnson TWA Greyhound San Pellegrino Sun Microsystems Wired Quest Telecomm Nokia iVillage.com NetGrocer Iridium 40 20 0 0 20 40 60 80 100 BRAND STATURE Base: USA Total Adults BAV 1999

46. Y&R Resonance Research Resonance (10%) Community Engagement 15% Attachment (30%) Loyalty (60%) Usage Base: 2001 BAV Data

47. Y&R Resonance Research with BAV Resonance Resonance 100 Engaged Community Attached Engaged Loyal Differentiation Community Non-Loyals 50 Brand Strength Attached Loyal Users Non-Loyal Users 0 0 50 100 Brand Stature Base: BAV USA Adults 2001

48. 7% Bonded 38% 32% Advantage 20% 35% Performance 19% 43% Relevance 17% 76% Presence 13% Average U.S. Packaged Goods Brand Consumer Loyalty Proportion of Consumers

49. Commonalty Between the Basic BAV Model and the CBBE Framework • BAV’s knowledge relates to CBBE’s brand awareness and familiarity. • BAV’s esteem relates to CBBE’s favorability of brand associations. • BAV’s relevance relates to CBBE’s strength of brand associations (as well as perhaps favorability). • BAV’s energy relates to CBBE’s favorability of associations. • BAV’s differentiation relates to CBBE’s uniqueness of brand associations.

50. CHAPTER 10: MEASURING OUTCOMES OF BRAND EQUITY: CAPURING MARKET PERFORMANCE Kevin Lane Keller Tuck School of Business Dartmouth College