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Creating Brand Equity
10
Marketing ManagementA South Asian Perspective, 13th ed
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-2
Steps in Strategic Brand Management
• Identifying and establishing brand positioning
• Planning and implementing brand marketing
• Measuring and interpreting brand performance
• Growing and sustaining brand value
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-3
What is a Brand?
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.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-4
The Role of Brands
Identify the makerIdentify the maker
Simplify product handlingSimplify product handling
Organize accountingOrganize accounting
Offer legal protectionOffer legal protection
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-5
The Role of Brands
Signify qualitySignify quality
Create barriers to entryCreate barriers to entry
Serve as a competitive advantage
Serve as a competitive advantage
Secure price premiumSecure price premium
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-6
What is Branding?
Branding is endowing products and services with the
power of the brand.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-7
The Scope of Branding
• Brand differences are often related to attributes or benefits of product itself.
• Branding can be of :• Physical goods• Services• A store• A person• A place• An organization• An Idea
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-8
What is Brand Equity?
Brand equity is the added value endowed on products and services, which may be reflected in the way
consumers, think, feel, and act with respect to the brand.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-9
• Customer Based Brand Equity• Power of a brand lies in what customer
have seen, read, heard, learnt, thought and felt about the brand over the time.
• Ingredients of customer based brand equity:
1. Brand equity arises from differences in consumer response.
2. Differences in response are a result of consumer’s knowledge about the brand.
3. Differential response by the customers that makes up brand equity is reflected in perceptions, preferences and behavior related to all aspects of marketing of a brand.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-10
Brand Equity as a Bridge
• The quality of investment in brand building is the critical factor, not necessarily the quantity
Brand Promise• Marketer’s vision of what the brand must
be and do for the consumers.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-11
Key Benefits of Brand Equity
• Improved perceptions of product performance
• Greater Loyalty
• Less vulnerability to competitive marketing
• Less vulnerability to marketing crises
• Larger Margins
• More inelastic consumer response to price increase
• Additional Brand extension opportunities
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-12
Brand Equity Models
• Brand Asset Valuator
• Aaker Model
• BRANDZ
• Brand Resonance
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-13
BAV Key Components
Differentiation Degree to which a brand is seen different
EnergyBrand’s Sense of Momentum
RelevanceBreadth of brand’s appeal
EsteemHow well the brand is respected
KnowledgeHow familiar and intimate consumers are
Brand Strength
Brand Stature
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-14
Power Grid
Brand Strength
Brand Stature
Up-coming / Niche
Low earning / High Potential
Leaders
High earning / High Potential
Declining Leaders
High earning / Low Potential
Eroded / Commoditized
Seriously Challenged
New / Underdeveloped
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-15
Figure 10.3 Brand Dynamics Pyramid
Presence
Relevance
Performance
Advantage
Bonding
Strong Relationship
Weak Relationship
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-16
Aaker Model
Brand Identity
Extended Identity
ElementsBrand Essence
Core Identity
Elements
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-17
Figure 10.3 Brand Resonance Pyramid
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-18
Drivers of Brand Equity
Brand Elements
Marketing Activities
Meaning Transference
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-19
Brand Knowledge
Knowledge
Thoughts
Experiences
BeliefsImages
Feelings
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-20
Brand Elements
ElementsSlogans
Brand
names URLs
Logos
SymbolsCharacters
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-21
Brand Element Choice Criteria
• Memorable• Meaningful• Likeability• Transferable• Adaptable• Protectible
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-22
Slogans
• Like a good neighbor, State Farm is there
• Just do it• Nothing runs like a
Deere• Save 15% or more
in 15 minutes or less
• We try harder• We’ll pick you up• Nextel – Done• Zoom Zoom• I’m lovin’ it• Innovation at work• This Bud’s for you• Always low prices
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-23
Designing Holistic Marketing Activities
Personalization
Integration
Internalization
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-24
Internal Branding
• Choose the right moment
• Link internal and external marketing
• Bring the brand alive for employees
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-25
Figure 10.4 Secondary Sources of Brand Knowledge
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-26
Measuring Brand Equity
Brand AuditsBrand Audits
Brand TrackingBrand Tracking
Brand ValuationBrand Valuation
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-27
Table 10.2 The 10 Most Valuable Brands
Brand 2006 Brand Value (Billions)
Coca-Cola $67.00
Microsoft $56.93
IBM $56.20
GE $48.91
Intel $38.32
Nokia $30.13
Toyota $27.94
Disney $27.85
McDonald’s $27.50
Mercedes-Benz $22.13
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-28
Managing Brand Equity
Brand ReinforcementBrand Reinforcement
Brand RevitalizationBrand Revitalization
Brand CrisesBrand Crises
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-29
Interbrand’s Steps in Calculating Brand Equity
• Market segmentation
• Financial analysis
• Role of branding
• Brand strength
• Brand value calculation
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-30
Devising a Branding Strategy
Develop new brand elements
Develop new brand elements
Apply existing brand elements
Apply existing brand elements
Use a combination of old and new
Use a combination of old and new
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-31
Branding Terms
• Brand line• Brand mix• Brand extension• Sub-brand• Parent brand• Family brand
• Line extension• Category extension• Branded variants• Licensed product• Brand dilution• Brand portfolio
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-32
Brand Naming
Individual namesIndividual names
Blanket family namesBlanket family names
Separate family namesSeparate family names
Corporate name-individual name combo
Corporate name-individual name combo
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-33
Reasons for Brand Portfolios
• Increasing shelf presence and retailer dependence in the store
• Attracting consumers seeking variety
• Increasing internal competition within the firm
• Yielding economies of scale in advertising, sales, merchandising, and distribution
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-34
Brand Roles in a Brand Portfolio
Flankers
Low-end
Entry-level
High-end
Prestige
Cash Cows
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-35
Marketing Debate
Are brand extensions good or bad?
Take a position:1. Brand extensions can endanger brands.
or
2. Brand extensions are an important brand-growth strategy.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 10-36
Marketing Discussion
How can you relate the different modelsbrand equity presented in this chapter? How are they similar? Different? Can you reconstruct a brand-equity Model that incorporates the best of each?