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Chapter. CREATING. 9. Brand Equity. In this chapter, we address the following questions:. What is a brand and how does branding work? What is brand equity? How is brand equity built, measured & managed? What are the important decisions in developing a branding strategy?.

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creating

Chapter

CREATING

9

Brand Equity

Marketing Management

An Asian Perspective

slide2

In this chapter, we

address the following

questions:

  • What is a brand and how does branding work?
  • What is brand equity?
  • How is brand equity built, measured & managed?
  • What are the important decisions in developing a branding strategy?

Marketing Management

An Asian Perspective

slide3
Googlefounders

Larry Page

and

Sergey Brin

Marketing Management

An Asian Perspective

what is brand equity the role of brands
What is Brand Equity?- The Role of Brands

Brand: name, sign, symbol, design, to identify goods/services of seller & differentiate from competitors’

  • Identify product source & firm
  • Perform valuable functions for firm
  • Signal quality: satisfied buyer - re-buy
  • Valuable legal property

Marketing Management

An Asian Perspective

the brand report card
The Brand Report Card

World’s strongest brands 10 attributes

1. benefits consumers truly want

2. stays relevant

3. pricing - on consumer perceptions of value

4. properly positioned

5. consistent

6. portfolio makes sense

7. use marketing to build equity

8. Managers understand its meaning to consumers

9. given proper, sustained support

10. sources of brand equity monitored

Marketing Management

An Asian Perspective

what is brand equity the scope of branding
What is Brand Equity?- The Scope of Branding
  • Branding: Endow products with brand power
  • To create brand value – convince consumers of meaningful differences among brands
  • Related to attributes of product
  • Branding can be applied wherever consumer has a choice

Marketing Management

An Asian Perspective

slide7
In Hong Kong, Oxfam brands its idea to stop poverty through the “Make Trade Fair” campaign.

Marketing Management

An Asian Perspective

slide8
The Joseph Conrad suite at the Oriental Hotel, Bangkok. The hotel brands itself by creating a premium image that appeals to guests who seek superior service

Marketing Management

An Asian Perspective

what is brand equity defining brand equity
What is Brand Equity?- Defining Brand Equity
  • Brand equity - added value endowed to products & services
  • Important intangible asset with psychological & financial value
  • Customer-based brand equity effect brand knowledge has on consumer response to marketing of that brand

Marketing Management

An Asian Perspective

what is brand equity defining brand equity1
What is Brand Equity?- Defining Brand Equity

3 keys to customer-based brand equity

  • Arise from differences in consumer responses
  • A result of consumer’s knowledge about brand
  • Reflected in perceptions, preferences, & behavior related to marketing of brand
  • To build a strong brand - ensure customers have right experiences & marketing create desired brand knowledge

Marketing Management

An Asian Perspective

table 9 1 marketing advantages of strong brands
Table 9.1 Marketing Advantages of Strong Brands

Improved Perceptions of Product Performance

Greater Loyalty

Less Vulnerability to Competitive Marketing Actions

Less Vulnerability to Marketing Crises

Larger Margins

More Inelastic Consumer Response to Price Increases

More Elastic Consumer Response to Price Decreases

Greater Trade Cooperation & Support

Increased Marketing Communications Effectiveness

Possible Licensing Opportunities

Additional Brand Extension Opportunities

Marketing Management

An Asian Perspective

what is brand equity brand equity as a bridge
What is Brand Equity?- Brand Equity as a Bridge
  • Product marketing expenses are investments in consumer brand knowledge
  • Brand knowledge dictates future directions
  • A brand - marketer’s promise to deliver predictable product/service performance
  • A brand promise is the marketer’s vision of what the brand must be & do for consumers

Marketing Management

An Asian Perspective

what is brand equity brand equity models
What is Brand Equity?- Brand Equity Models

BAV Power Grid

BRAND ASSET VALUATOR (BAV)

  • provides comparative measures of brand equity of thousands of brands across hundreds of different categories
  • 4 key components of brand equity:
      • Differentiation
      • Relevance
      • Esteem
      • Knowledge

Marketing Management

An Asian Perspective

what is brand equity brand equity models1
What is Brand Equity?- Brand Equity Models

BAV Power Grid

Differentiation + Relevance = Brand Strength

Brand’s future value

Esteem + Knowledge = Brand Stature

Brand’s past performance

  • Both form a Power Grid: stages in cycle of brand development
  • New brands - low levels on all 4 pillars
  • Leadership brands - high levels on all 4 pillars
  • declining brands show high Knowledge

Marketing Management

An Asian Perspective

what is brand equity brand equity models2
What is Brand Equity?- Brand Equity Models

Figure 9.1

BAV Power Grid

Marketing Management

An Asian Perspective

what is brand equity brand equity models3
Brand equity5 categories of brand assets & liabilities linked to a brand that form value of product to a firm and/or to its customers

Brand loyalty

Brand awareness

Perceived quality

Brand Associations

Other proprietary assets

What is Brand Equity?- Brand Equity Models

AAKER MODEL

Marketing Management

An Asian Perspective

what is brand equity brand equity models4
What is Brand Equity?- Brand Equity Models

AAKER MODEL

  • brand identity - unique set of brand associations that represent what brand stands for & promises to customers
  • 12 dimensions, 4 perspectives:
  • brand-as-product
  • brand-as-organization
  • brand-as-person
  • brand-as-symbol

Marketing Management

An Asian Perspective

what is brand equity brand equity models5
What is Brand Equity?- Brand Equity Models

AAKER MODEL

  • brand identity = core + extended
  • The core identity - central, timeless essence of brand - likely to remain constant as brand travels to new markets & products
  • The extended identity - various brand identity elements, organized into cohesive & meaningful groups

Marketing Management

An Asian Perspective

building brand equity overview
Building Brand Equity- Overview
  • Building Brand Equity - create right brand knowledge structures with right consumers
  • 3 brand equity drivers:
  • Initial choices for elements make up brand
  • The product, marketing activities & programs
  • Other associations indirectly transferred to the brand by linking it to some other entity

Marketing Management

An Asian Perspective

building brand equity choosing brand elements
Building Brand Equity- Choosing Brand Elements
  • Brand elements – trademarkable devices that identify & differentiate brand
  • Strong brands - multiple brand elements
    • Nike has the “swoosh” logo, the “Just Do It” slogan & the “Nike” name
  • Brand elements can be chosen to build as much brand equity as possible

Marketing Management

An Asian Perspective

building brand equity choosing brand elements1
Building Brand Equity- Choosing Brand Elements

BRAND ELEMENT CHOICE

Memorable

  • Memorable
    • How easily is brand recalled, recognized?
    • Name to look distinctive to be memorable
  • Meaningful
    • Interpreted in values consumers seek
    • Marketers in the Asia Pacific should probe taboos, religious connotations conveyed by colors, numbers which are part of brand name

Marketing Management

An Asian Perspective

slide22

Korean electronics manufacturer LG incorporates its name in its slogan, “Life’s Good.”

Its simple-to-pronounce letter-name reinforced by its slogan & logo elements makes the brand name memorable

Marketing Management

An Asian Perspective

building brand equity choosing brand elements2
Building Brand Equity- Choosing Brand Elements

BRAND ELEMENT CHOICE

Likeability

  • Likeability
    • Is it inherently likable visually, verbally?
      • for Fuji/Xerox Shagaku, a handheld copier, fits its image well
  • Transferable
    • Can brand element be used to introduce new products in other categories?

Marketing Management

An Asian Perspective

building brand equity choosing brand elements3
Building Brand Equity- Choosing Brand Elements

BRAND ELEMENT CHOICE

Adaptable

  • Adaptable
  • How adaptable & updatable is the brand?
  • Asian brands need to retain traditional brand values as they modernize
    • Eg: Dutch Baby – 1965 Dutch Baby;
    • 2000 Dutch Lady - new name - brand market strength- more modern image

Marketing Management

An Asian Perspective

building brand equity choosing brand elements4
Building Brand Equity- Choosing Brand Elements

BRAND ELEMENT CHOICE

Adaptable

  • Protectible
  • How legally protectible is the brand element?
  • unique brand name can become intimately identified with product category
    • eg Scotch Tape & Post-it notes

Marketing Management

An Asian Perspective

building brand equity choosing brand elements5
Building Brand Equity- Choosing Brand Elements

DEVELOPING BRAND ELEMENTS

DEVELOPING BRAND ELEMENTS

  • Elements to identify products are aplenty
  • Likeability & appeal of brand elements - critical role in equity of a brand
  • play a number of brand-building roles
  • the less concrete brand benefits are, as is typical of service businesses, the more important that brand elements capture the brand’s intangible characteristics

Marketing Management

An Asian Perspective

building brand equity choosing brand elements6
Building Brand Equity- Choosing Brand Elements

DEVELOPING BRAND ELEMENTS

  • Slogans are a powerful brand element
  • Function as “hooks” to help consumers grasp what the brand is & what makes it special
  • Indispensable means of summarizing & translating intent of a marketing program
  • Think of the inherent brand meaning in slogans such as, “A Great Way to Fly” (Singapore Airlines) & “Connecting People” (Nokia)

Marketing Management

An Asian Perspective

building brand equity designing holistic marketing activites
Building Brand Equity- Designing Holistic Marketing Activites
  • A brand contact - any product-related information-bearing experience a customer/prospect has with the brand, category or market
  • Holistic marketers emphasize 3 important new themes in designing brand-building marketing programs:
  • personalization, integration & internalization

Marketing Management

An Asian Perspective

building brand equity designing holistic marketing activites1
Building Brand Equity- Designing Holistic Marketing Activites
  • PERSONALIZATION
  • The Internet - opportunities to personalize marketing
  • experiential, one-to-one & permission marketing
  • Personalizing marketing is making sure the brand & its marketing is relevant to as many customers as possible – a challenge, given that no 2 customers are ever identical

Marketing Management

An Asian Perspective

building brand equity designing holistic marketing activites integratation
Building Brand Equity- Designing Holistic Marketing Activites integratation
  • Integrating marketing - mix & match activities to maximize effects
  • Brand awareness - consumers’ ability to identify brand under different conditions through recognition or recall
  • Brand image - perceptions & beliefs held by consumers through associations held in their memory

Marketing Management

An Asian Perspective

building brand equity designing holistic marketing activites2
Building Brand Equity- Designing Holistic Marketing Activites

INTERNALIZATION

  • internal perspective - employees understand brand & how they can help brand equity
  • Internal branding: inform, inspire employees
  • Brand bonding: customers experience brand promise
  • Delivered if EVERYONE in company lives the brand
  • Customer experience with company staff influence brand perception: eg, the inflight service by the Singapore Girl - critical ingredient of Singapore Airlines’ branding success

Marketing Management

An Asian Perspective

building brand equity leveraging secondary associations
Building Brand Equity- Leveraging Secondary Associations
  • Brand associations - linked to other entities with their own associations, creating “secondary” brand associations
  • Brand equity created -link brand to other information in memory that conveys meaning to consumers

Marketing Management

An Asian Perspective

slide33

Figure 9.3 Secondary Sources of Brand Knowledge

Marketing Management

An Asian Perspective

measuring brand equity brand audits
Measuring Brand Equity- Brand Audits
  • A brand audit - consumer-focused exercise- procedures to assess brand health, brand equity sources & how to improve & leverage equity
  • Profound implications for strategic direction & brands’ resulting performance
  • Brand audits consist of 2 steps:
  • the brand inventory
  • the brand exploratory

Marketing Management

An Asian Perspective

21st century branding
21st Century Branding
  • Relying on brand awareness has become marketing fool’s gold
  • You have to know it before you can grow it
  • Always remember the Spandex rule of brand expansion
  • Great brands establish enduring customer relationships
  • Everything matters
  • All brands need good parents
  • Big is no excuse for being bad
  • Relevance, simplicity & humanity

Marketing Management

An Asian Perspective

managing brand equity brand reinforcement
Managing Brand Equity- Brand Reinforcement
  • Brand equity reinforced by marketing:
  • What products brand represents?
  • How brand makes products superior?
  • Which strong, favorable & unique brand associations should be in consumers’ minds?
  • Brand Reinforcement requires innovation & relevance in marketing to satisfy target markets

Marketing Management

An Asian Perspective

managing brand equity brand revitalization
Managing Brand Equity- Brand Revitalization

Refresh OR create brand equity sources:

  • Expand depth, breadth of brand awareness - improve brand recall & recognition in purchase/consumption
  • Improve strength, favorability & uniqueness of brand associations

Marketing Management

An Asian Perspective

slide38

A corporate

TIGER BALM ad showing its different products for different uses

Marketing Management

An Asian Perspective

slide39

Billboard ads of

Eu Yan Sang

promote health benefits of its bottled bird’s nest &

Bak Foong pills, seen throughout Malaysia

Marketing Management

An Asian Perspective

managing brand equity brand crisis
Managing Brand Equity- Brand Crisis
  • More brand equity established, more likely firm can weather crisis
  • Careful preparation &well-managed crisis management program - critical
  • The key to managing a crisis is that consumers see the response by firm as both swiftand sincere

Marketing Management

An Asian Perspective

slide41

Hello Kitty has been licensed to many products including credit cards, toasters, purses, confectionery & UNO card games

Marketing Management

An Asian Perspective

devising a brand strategy
Devising a Brand Strategy
  • Brand strategy – reflectselements applied to products
  • Brand extension – established brand used to introduce a new product
  • Sub-brand - new brand + existing brand
  • Parent brand - existing brand that gives birth to a brand extension
  • Family brand - parent brand associated with multiple products through brand extensions

Marketing Management

An Asian Perspective

devising a brand strategy1
Devising a Brand Strategy

2 categories of Brand extensions

  • Line extension - parent brand used to brand new product, new target market in current product category
  • Category extension - parent brand used to enter a new product category

Marketing Management

An Asian Perspective

devising a brand strategy2
Devising a Brand Strategy
  • A brand line – all products sold under brand
  • A brand mix - all brand lines available to buyers
  • Branded variants - specific brand lines supplied to specific retailers or distribution channels
  • A licensed product - brand name licensed to other manufacturers who make the product

Marketing Management

An Asian Perspective

devising a brand strategy branding decision to brand or not to brand
Devising a Brand Strategy- Branding Decision: To Brand or not to Brand?
  • 4 strategies when

choosing brand names:

  • Individual names
  • Blanket family names
  • Separate family names

for all products

  • Corporate name combined with individual product names

Marketing Management

An Asian Perspective

devising a brand strategy brand extensions
Devising a Brand Strategy- Brand Extensions
  • Advantages of Brand Extensions
  • New Product Success:
    • Consumers form expectations of new product based on knowledge on parent brand
    • Reduce risk - easier to convince retailers to stock & promote a brand extension
    • Reduced costs of launch campaign – no need to create brand & new product awareness
  • Positive Feedback Effects
    • Line extensions renew interest & benefit parent brand by expanding market coverage

Marketing Management

An Asian Perspective

devising a brand strategy brand extensions1
Devising a Brand Strategy- Brand Extensions
  • Disadvantages of Brand Extensions
  • line-extension trap - brand name not strongly identified with any one product
  • Brand dilution - consumers do not link brand with specific product & start thinking less of brand
  • If extensions inappropriate, integrity questioned
  • If extension fails - harm parent brand
  • Switch from parent brand - cannibalizing parentbrand
  • Firm forgoes chance to create a new unique brand

Marketing Management

An Asian Perspective