CHAPTER 2: CUSTOMER-BASED BRAND EQUITY
Krishna UnadkatMEFGI
2.1
Customer-Based Brand Equity
“The differential effect that brand knowledge has on consumer response to the marketing of that brand.”
Keller, 1993
2.2
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 promotionEvaluations of a proposed brand extension
2.3
Brand Equity as a “Bridge”Reflection of past investments in the
marketing of a brandDirection for future marketing actions or
programs
2.4
Making a Brand Strong: Brand KnowledgeBrand 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.
2.5
Brand awarenessBrand recognition : Can you distinguish the
brand from its competitors ?Brand recall : If the product category is
mentioned, do you think of the brand ?
2.6
Brand Image
Brand Image – The customer’s net extract from the brandBrand Associations Anything which is deep seated about the
brand in the minds of consumersNeed to be favorable, strong, and unique
2.7
2.8
Brand Awareness AdvantagesLearning 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
2.9
Customer EquityCustomer 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.
2.10
Is a company consumer-centric?1. Is the company looking for ways to take care
of you?2. Does the company know its customers well
enough to differentiate between them? 3. Is someone accountable for customers?4. Is the company managed for shareholder
value?5. Is the company testing new customer offers
and learning from the results?
2.11
Sources: Larry Selden and Geoffrey Colvin, 2004.
The Four Steps of Brand Building 1. Identity2. Meaning3. Response4. Relationship
2.12
Four Questions Customers ask of Brands1. Who are you? (brand identity)2. What are you? (brand meaning)3. What about you? What do I think or feel
about you? (brand responses)4. What about you and me? What kind of
association and how much of a connection would I like to have with you? (brand relationships)
2.13
2.14
Customer Based Brand Equity Model
Sub-Dimensions of CBBE Pyramid
LOYALTYATTACHMENTCOMMUNITYENGAGEMENT
QUALITY CREDIBILITYCONSIDERATIONSUPERIORITY
WARMTHFUNEXCITEMENTSECURITYSOCIAL APPROVALSELF-RESPECT
CATEGORY IDENTIFICATIONNEEDS SATISFIED
PRIMARY CHARACTERISTICS &SECONDARY FEATURES
PRODUCT RELIABILITY, DURABILITY & SERVICEABILITY
SERVICE EFFECTIVENESS, EFFICIENCY & EMPATHY
STYLE AND DESIGN PRICE
USER PROFILESPURCHASE & USAGE
SITUATIONSPERSONALITY &
VALUESHISTORY, HERITAGE & EXPERIENCES
Salience DimensionsDepth of brand awareness
Ease of recognition and recallStrength and clarity of category membership
Breadth of brand awarenessPurchase considerationConsumption consideration
2.16
Performance Dimensions Primary characteristics and supplementary
features
Product reliability
Service effectiveness
Style and design
Price
2.17
Imagery Dimensions
User profilesPurchase and usage situationsPersonality and valuesHistory, heritage, and experiences
2.18
Judgment Dimensions
Brand quality
Brand credibility
Brand consideration
Brand superiority
2.19
Feelings Dimensions
WarmthFunExcitementSecuritySocial ApprovalSelf-respect
2.20
Resonance Dimensions
Behavioral loyaltyAttitudinal attachmentSense of communityActive engagement
2.21
Customer-Based Brand Equity Model
Consumer-BrandResonance
Brand Salience
Consumer Judgments
Consumer Feelings
BrandPerformance
BrandImagery
INTENSE, ACTIVE LOYALTY
INTENSE, ACTIVE LOYALTY
RATIONAL & EMOTIONAL REACTIONS
RATIONAL & EMOTIONAL REACTIONS
POINTS-OF-PARITY &
POINTS-OF-DIFFERENCE
POINTS-OF-PARITY &
POINTS-OF-DIFFERENCE
DEEP, BROAD BRAND
AWARENESS
DEEP, BROAD BRAND
AWARENESS
Application:Identify the Key Drivers of
Brand Equity
0.17 0.66
0.24
0.65
P-2
P-2
PerformancePerformance
P-1P-1
P-10 P-10
P-7
P-7
P-8P-8
P-9P-9
P-3P-3
P-4P-4
P-6P-6
P-5P-5
P-11 P-11 P-
12
P-12
I-2I-2
I-9I-9
ImageryImagery
I-1I-1
I-3I-3
I-6I-6
I-5I-5
I-10 I-10
I-7I-7
I-8I-8
I-11
I-11 I-12
I-12
I-4I-4
F-2
F-2
FeelingsFeelings
F-1F-1
F-3F-3
F-4F-4
F-6F-6
F-5F-5
F-7
F-7
F-8F-8
F-9F-9
F-11 F-11 F-
12
F-12
F-10F-10
J-2J-2
JudgmentJudgment
J-1J-1
J-3J-3
J-4J-4
J-6J-6
J-5J-5
J-10J-10
J-7J-7
J-8J-8
J-9J-9
J-11
J-11 J-1
2J-1
2
R-2R-2
ResonanceResonance
R-1R-1
R-3R-3
R-4R-4
R-6
R-6
R-5R-5
R-10 R-10
R-7
R-7
R-8
R-8
R-9R-9
R-11 R-11 R
-12
R-1
2
0.58
0.49
Brand Building ImplicationsCustomers own brands. Don’t take shortcuts with brands. Brands should have a duality. Brands should have richness. Brand resonance provides important focus.
2.24