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CHAPTER 2: CUSTOMER-BASED BRAND EQUITY

CHAPTER 2: CUSTOMER-BASED BRAND EQUITY. Krishna Unadkat MEFGI. Customer-Based Brand Equity. “The differential effect that brand knowledge has on consumer response to the marketing of that brand.” Keller, 1993. Differential effect Differences in consumer response Brand knowledge

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CHAPTER 2: CUSTOMER-BASED BRAND EQUITY

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  1. CHAPTER 2: CUSTOMER-BASED BRAND EQUITY Krishna Unadkat MEFGI

  2. Customer-Based Brand Equity • “The differential effect that brand knowledge has on consumer response to the marketing of that brand.” Keller, 1993

  3. Differential effect • Differences in consumer response • Brand knowledge • A result of consumers’ knowledge about the brand • Consumer response to marketing • Choice of a brand • Response to a sales promotion • Evaluations of a proposed brand extension

  4. Brand Equity as a “Bridge” • Reflection of past investments in the marketing of a brand • Direction for future marketing actions or programs

  5. Making a Brand Strong: Brand Knowledge • Brand knowledge is the key to creating brand equity. • Brand knowledge consists of a brand node in memory with a variety of associations linked to it. • Brand knowledge has two components: brand awareness and brand image.

  6. Brand awareness • Brand recognition : Can you distinguish the brand from its competitors ? • Brand recall : If the product category is mentioned, do you think of the brand ?

  7. Brand Image • Brand Image – The customer’s net extract from the brand • Brand Associations Anything which is deep seated about the brand in the minds of consumers • Need to be favorable, strong, and unique

  8. Brand Awareness Advantages • Learning advantages • Register the brand in the minds of consumers • Consideration advantages • Likelihood that the brand will be a member of the consideration set • Choice advantages • Affect choices among brands in the consideration set

  9. Customer Equity • Customer lifetime value (CLV) :The sum of lifetime values of all customer is affected by revenue and by the cost of customer acquisition, retention, and cross-selling. • Brand Equity is defined as value and strength of the Brand that decides its worth whereas Customer Equity is defined in terms of lifetime values of all customers.

  10. Is a company consumer-centric? • Is the company looking for ways to take care of you? • Does the company know its customers well enough to differentiate between them? • Is someone accountable for customers? • Is the company managed for shareholder value? • Is the company testing new customer offers and learning from the results? Sources: Larry Selden and Geoffrey Colvin, 2004.

  11. The Four Steps of Brand Building • Identity • Meaning • Response • Relationship

  12. Four Questions Customers ask of Brands • Who are you? (brand identity) • What are you? (brand meaning) • What about you? What do I think or feel about you? (brand responses) • What about you and me? What kind of association and how much of a connection would I like to have with you? (brand relationships)

  13. Customer Based Brand Equity Model

  14. Sub-Dimensions of CBBE Pyramid LOYALTY ATTACHMENT COMMUNITY ENGAGEMENT WARMTH FUN EXCITEMENT SECURITY SOCIAL APPROVAL SELF-RESPECT QUALITY CREDIBILITY CONSIDERATION SUPERIORITY PRIMARY CHARACTERISTICS & SECONDARY FEATURES PRODUCT RELIABILITY, DURABILITY & SERVICEABILITY SERVICE EFFECTIVENESS, EFFICIENCY & EMPATHY STYLE AND DESIGN PRICE USER PROFILES PURCHASE & USAGE SITUATIONS PERSONALITY & VALUES HISTORY, HERITAGE & EXPERIENCES CATEGORY IDENTIFICATION NEEDS SATISFIED

  15. Salience Dimensions • Depth of brand awareness • Ease of recognition and recall • Strength and clarity of category membership • Breadth of brand awareness • Purchase consideration • Consumption consideration

  16. Performance Dimensions • Primary characteristics and supplementary features • Product reliability • Service effectiveness • Style and design • Price

  17. Imagery Dimensions • User profiles • Purchase and usage situations • Personality and values • History, heritage, and experiences

  18. Judgment Dimensions • Brand quality • Brand credibility • Brand consideration • Brand superiority

  19. Feelings Dimensions • Warmth • Fun • Excitement • Security • Social Approval • Self-respect

  20. Resonance Dimensions • Behavioral loyalty • Attitudinal attachment • Sense of community • Active engagement

  21. Customer-Based Brand Equity Model INTENSE, ACTIVE LOYALTY Consumer- Brand Resonance RATIONAL & EMOTIONAL REACTIONS Consumer Judgments Consumer Feelings POINTS-OF-PARITY & POINTS-OF-DIFFERENCE Brand Performance Brand Imagery DEEP, BROAD BRAND AWARENESS Brand Salience

  22. P-1 J-1 P-12 J-12 P-2 J-2 P-11 J-11 P-3 J-3 Performance Judgment P-10 J-4 0.65 P-4 J-10 0.49 R-2 R-1 R-12 P-5 J-5 P-9 J-9 R-11 J-8 P-8 J-6 P-6 R-3 J-7 P-7 Resonance R-10 R-4 0.66 0.17 I-1 R-5 I-12 F-1 R-9 I-2 F-12 F-2 I-11 R-8 R-6 F-11 I-3 R-7 F-3 0.58 Imagery 0.24 Feelings I-10 F-4 I-4 F-10 I-5 I-9 F-5 F-9 I-8 I-6 F-8 F-6 I-7 F-7 Application:Identify the Key Drivers of Brand Equity

  23. Brand Building Implications • Customers own brands. • Don’t take shortcuts with brands. • Brands should have a duality. • Brands should have richness. • Brand resonance provides important focus.

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