MMK280 –Brand

Management
Customer-based
Brand Equity and Brand
Positioning

Dr Allison Ringer
The target market content will not
be covered as this has been
covered in other marketing units Class 02 – T2, 2023 Burwood, Geelong
Waterfront and Cloud Campuses
Week 02
1
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 Last Week - Chapter 1: Marketing, Brands & Brand Management – Key Take-away
Points

A brand is a “name, term, sign, symbol, or design, or a combination of them,

intended to identify the goods and services of one seller or group of sellers and
to differentiate them from those of competition.”
 A product is anything that is offered to a market for attention, acquisition, use,
or consumption that might satisfy a need or want.
 By creating perceived differences among products through branding and by
developing a loyal consumer franchise, marketers create value that can
translate to financial profits for the firm.
Firms see branding as a powerful means to secure a competitive advantage.

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 Last Week - Chapter 1: Marketing, Brands & Brand Management – Key Points

Brands have differentiating features that distinguish them from competitors

and add value for consumers.
Strategic brand management involves the design and implementation of
marketing programs and activities to build, measure, and manage brand equity.
 Consumers often don’t buy products; they buy the images associated with
products.

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 Learning Objectives
L1. Define customer-based brand equity.
L2. Outline the sources and outcomes of customer-based brand equity.
L3. Identify the four components of brand positioning.
L4. Describe the guidelines in developing a good brand positioning.
L5. Explain brand mantra and how it should be developed.

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 Assignment 2

L1. What is Brand Equity?

“The value of a brand. From a consumer
perspective, brand equity is based on
“Brand equity is the added value consumer attitudes about positive brand
endowed on products and services, attributes and favorable consequences of
which may be reflected in the way brand use.” – American Marketing
consumers, think, feel, and act with Association
respect to the brand”. –Philip Kotler

“The tangible and intangible value that

a brand provides positively or negatively
to an organization, its products, its
services, and its bottom-line derived
“A set of assets and liabilities linked from consumer knowledge,
to a brand, its name and symbol, perceptions, and experiences with the
that adds to or subtracts from the brand.” — Susan Gunelius (Industry
value provided by a product or practioner)
service to a firm and/or to that
firm’s customers.” – David Aaker

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 Brand Equity - Illustration

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 Brand Equity: A strategic bridge from past to the
future Brand as a
Reflection of the Brand as a
Past Direction for the
Future

• Marketing activities should be seen as ‘investment. These investments aim to

create consumer brand knowledge through brand building.
• The quality of the investment is critical!!
• Companies need to create the right knowledge structures in the consumers’
mind about the brand.
• This brand knowledge at any point in time dictates the future of that brand as it
is the consumers who decide how appropriate it is for a brand to move in a
particular direction.

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 Why Customer-based Brand Equity is Important for
Marketers?
• Marketers need an understanding of how consumers perceive a
brand and interact with it.
• Consumer knowledge gives marketers the ability to manage a brand
to achieve a competitive advantage over rival brands. Warning…is
must be sustainable over time and deliverable

Price premium is not just accepted, it is

expected at Tiffany & Co!

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 Strong Brands
• Advantages of strong brands
•Improved perceptions related to product performance
•Greater loyalty
•Larger profit margins
•Greater cooperation from suppliers & marketing intermediaries
•Increased IMC effectiveness
•More licensing and brand extension opportunities
•Less vulnerability to competitors’ marketing actions and marketing
crises
•Favourable consumer response to price changes
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 Customer-based Brand Equity (CBBE)
• A brand is created in the minds and Brand
awaren
hearts of the consumers. ess
• Strong BE is created through brand
knowledge, which is from brand
awareness and brand image. Customer
brand -based
• Customer-based brand equity (CBBE) knowl
brand
edge
says that the strength of a brand in equity
what consumers have learned, felt,
seen, and heard about the brand as a
result of their experiences over time. Brand
image

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 Customer Based Brand Equity [continued]
• Three key ingredients of the definition:
• Differential effect: The brand needs to be unique and different in the
minds of the consumer.
• Brand Knowledge: this differential effect needs to be communicated to
the consumers using multiple touch points
• Communication builds knowledge about your brand (this is when brand
equity is created).
• This knowledge is created through the sources of brand equity.
• Consumer response to marketing: signifies the outcomes of brand equity
e.g., choice of brand, reaction to promotions
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 Touchpoints are
where the target
market comes in
contact with the
brand

On average it is
approximately 8
touch points to close
a sale

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 Brand Equity Example

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 L2. Sources of Brand Equity
Brand
image

Brand Brand
preference trial

BRAND
Brand
EQUITY
Brand
loyalty association

Brand Brand
awareness perception

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 L2. Sources of Brand Equity [continued]
• CBBE occurs when customers:
• have a high level of awareness and familiarity with the brand
• In low involvement decision situations (e.g., FMCG – fast
moving consumer goods, brand awareness alone is sufficient)
• hold strong, favourable, and unique brand associations in
memory

Brand
Awareness Customer-
based Brand
Brand Equity

Image
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 Brand Awareness
• In high-involvement decision situations, strength, favourability, and
uniqueness of brand associations play a critical role in determining
the differential response that makes up the brand equity.

Brand Recognition • Consumer ability to recognise a brand as

to one they have been exposed before
• point of purchase situations

• Consumer ability to retrieve the brand from

Brand Recall memory when given a product category, needs
fulfilled by the category , or a purchase or usage
situation as a cue
• What and how much is recalled?
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 Brand
L
Awareness Benefits
e • The first step is to register the brand in consumers’ minds
a • Influences the formation and strength of brand associations
r • Choosing right brand elements (e.g., logo) makes learning easier
n
i
Con • Higher brand awareness increases the likelihood that the brand will be a member of the
nsig consideration set (e.g., your top 3 brands)
de • Customers are rarely loyal to one brand (in one product category)
rat
io
n • In many cases, consumers only buy well established and more familiar brands
Ch • In low involvement situations, a minimum level of brand awareness may be sufficient
oic for product choice
e

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 Brand Image
• Having created a sufficient level of brand awareness, marketers can emphasize to craft brand image

– hold some strong, favorable, and unique brand associations in memory

– Relating to brand attributes or brand benefits

• Personal relevance and consistent information lead to strong associations
Strength of Brand • Strong association sources are personal experience, WOM, whereas firm-
Associations influenced sources of information (e.g. advertising) create weakest associations

• BA is higher when a brand possesses relevant attributes and benefits that satisfy
Favourability of consumer needs and wants
Brand • Consumers do not value all brand associations equally important across purchase or
Associations consumption situations

• ‘Unique selling proposition' of the product

Uniqueness of • Provides brands with sustainable (long term) competitive advantage
Brand • Shared associations establish category membership and define the scope of
Associations competition with other brands in same category (e.g. comparing hatchback cars)

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 Brand image: McDonald’s
Most
frequently
mentioned
features with
McDonald’s

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 Brand Image is a common research theme

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 Assignment 2

L3. Brand Positioning

• Act of designing the company’s offer and image so that it occupies a
distinct and valued place in the target customers’ minds
• Allows consumers to think about a product or service in the ‘right’
perspective
• The four components of positioning
• Identify their target customers (frame of reference – target market and
competition)
• Analyse the type of competition they might face in the identified market base (in
the assignment you only have to list the key competition)
• Identify product features and associations that are similar to their
competitors (point of parity)
• Identify product features and associations that are different to their
competitors (point of difference) – PoP and PoD  Brand Mantra

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 L3. Nature of Competition – Frame of Reference

• Competitive analysis e.g., resources, capabilities, intentions –

why do we need to conduct a competitive analysis?
• Indirect competition e.g., need to consider different product
categories – who are Starbuck’s competitors?
• Multiple frames reference e.g., future growth of the brand or
broader category competition, different products performing
the same function

Assignment 2

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 Competitive Frame of Reference
A frame of reference begins by determining the category to which the product belongs,
which includes all products that a brand competes with or can serve as a substitute.
Competitors can then be analysed and more narrowly defined.

Assignment 2

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 Now take the example of Berri Multi V juice and notice how it faces competition
at Each level
Product Class Beverages
information
Product
category
Water Flavoured information

Product type
information Non-alcoholic Alcoholic

Juices Wine Beer

Milk/Coffee/Tea
i.e. Berri’s Multi
V

Brand information level

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Assignment 1 and 2
 L3. Points of Parity Associations: Attributes shared with other brands

• Category points- of-parity: These

represent the necessary elements that
a brand should possess for a consumer
to consider it in a particular category

• Category POPs may change over time

because of technological advances,
legalities and consumer trends

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 Points of Parity Associations: Attributes shared with
other brands cont.
•Competitive points-of-parity: The next step is to add
elements which would negate the competitors’ points of
difference i.e., provide similar or better elements as
compared to its competitor’ POD.
•Correlational points-of-parity: Potential negative
associations that arise from the existence of other, more
positive associations for the brand.
• E.g., consumers might find it hard to believe a brand is
“inexpensive” and at the same time “of the highest
quality.”

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 L3. Points of Difference Associations
• Attributes or benefits that consumers strongly
associate with a brand, positively evaluate, and
believe that these attributes or benefits are
unique to the focal brand, or that these cannot
be found to the same extent in a competitive
brand.

• Functional-performance related considerations.

• Abstract-imagery related considerations.

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 L3. Choosing Points-of-Difference
• Desirability criteria:
• Considered from the customers’ point-of-view
• Target customers must find POD personally relevant and important.

• Deliverability criteria
• Feasibility: ability of the firm to make product or service available to
the target market
• Communicability: effectiveness in convincing consumers of the
firm’s ability to deliver to their promise

• Differentiating criteria
• Target customers must find the POD distinctive and superior.

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 Source: https://vodka-vision.weebly.com/analysis/points-of-parity-points-of-difference2

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 Brand Positioning Bull’s-eye: Coffee Example

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 L5. Brand Mantra
• Short, three-to five-word phrase that captures the essence or
spirit of the brand positioning.
• Helps the brand convey a consistent image – need to always
reinforce and support the brand meaning
• The core brand promise
• Provides guidance about:
– What products to introduce under the brand.
– What ad campaigns to run.
– Where and how the brand should be sold.

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 Designing a Brand Mantra
• A good brand mantra should provide:
– Brand functions: Nature of the product or service or the type
of experiences or benefits the brand provide.
– Descriptive modifier: Combined with brand functions, helps
delineate the brand boundaries e.g., if it is not athletic then it
is not in Nike’s core business
– Emotional modifier: Determines how a brand provides
benefits and in what ways.
– Communicate, Simple and Inspire
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 Brand Mantra – The Essence of the Brand
Emotional Modifier Descriptive Modifier Brand Function
Nike Authentic Athletic Performance
Disney Fun Family Entertainment
McDonalds Fun Folks Food

• A good brand mantra should:

• Communicate the category of the business to set the brand boundaries and
clarify what is unique about the brand
• Be simple, crisp, and vivid
• Stake out ground that is personally meaningful and relevant to as many
employees as possible
Assignment 2

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 NIKE’S Brand Mantra
According to Scott Bedbury (author of A New Brand World, one the of top 10 books
behind Dark Matter Matters):
Nike’s brand mantra put a particular emphasis on maintaining authenticity, by
which we also meant integrity and purity, front and center… All products and
activities associated with Nike likewise had to be athletic, not leisurely… Finally,
every Nike product had to exude world-class performance and meet the demands of
the world’s finest athletes, even though such athletes represented a microscopic
piece of Nike’s total business… “Authentic Athletic Performance” was a simple idea,
but like so many simple ideas, its execution and implementation could be complex,
not to mention challenging, daunting, — and even painful, when it came down to
forgoing revenue-generating activities because they violated these accepted core
values
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 To Sum up...
• A good brand mantra should:
– Communicate the category of the business to set the brand
boundaries and clarify what is unique about the brand
– Be simple, crisp, and vivid
– Stake out ground that is personally meaningful and relevant to
as many employees and consumers as possible

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 Key Take-away points
• The power of the brand and its ultimate value to the firm resides with
customers.
• Customer-based brand equity is the differential effect of brand knowledge
on consumer response to the marketing of a brand.
• Positive brand equity results when consumers are familiar with the brand
and have strong, favourable, and unique associations for it.
• A brand has negative customer-based brand equity if consumers react less
favourably to marketing activity for the brand compared with an unnamed
or fictitiously named version of the product.

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 Key Take-away points
• The quality of the investment in brand building is the most critical factor,
not the quantity beyond some minimal threshold amount.
• The key to branding success is to establish both POPs and PODs.
• PODs are attributes or benefits that consumers strongly associate with a
brand, positively evaluate, and believe that they could not find to the
same extent with a competitive brand.
• POPs are not necessarily unique to the brand but may in fact be shared
with other brands.
• A brand mantra is a short, three- to five-word phrase that captures the
irrefutable essence or spirit of the brand positioning.
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