S T R AT E G I C B R A N D M A N A G E M E N T

Chapter -2
BRAND EQUITY
Brand equity is the value premium that a company realizes
from a product with a recognizable name as compared to its
generic equivalent. Companies can create brand equity for their
products by making them memorable, easily recognizable,
superior in quality and reliability. For instance, the additional
money that consumers are willing to spend to buy Coca Cola
rather than the store brand of soda is an example of brand
equity.

If consumers are willing to pay more for a generic product than

for a branded one, the brand is said to have negative brand
equity. This might happen if a company had a major product
recall or caused a widely publicized environmental disaster.

According to David Aaker, ‘brand equity is a set of brand assets

and liabilities linked to a brand, its name and symbols, that add
to or subtract from the value provided by a product or service to
a firm and/ or to that firm’s customer.’
FACTORS INFLUENCING BRAND
EQUITY
S T R AT E G I C B R A N D M A N AG E M E N T

Strategic brand management involves the design and implementation of

marketing programs and activities to build, measure, and manage brand
equity.

The strategic brand management process is defined as involving

four main steps:
1) Identifying and establishing brand positioning and values
2) Planning and implementing brand marketing programs
3) Measuring and interpreting brand performance
4) Growing and sustaining brand equity
S T R AT E G I C B R A N D M A N AG E M E N T
 S T R AT E G I C B R A N D M A N A G E M E N T
1.Identifying and establishing brand positioning and values:

The strategic brand management process starts with a clear understanding of what the brand is
to represent and how it should be positioned with respect to competitors. Brand positioning is
how a product is perceived in the minds of customer.

Philip Kotler defines positioning as an

“Act of designing the company’s offering and image to occupy a distinctive place in the
minds of target market”.
Ries & Trout defines “Positioning starts with the product. But
positioning is not what you do to the product. Positioning is what you do the mind of the
prospect.

For example VANISH has clearly positioned as Stain remover – TRUST

PINK FORGET STAINS. The positioning has been clearly incorporated in all
integrated marketing communication and has undoubtedly created a point of difference
which convinces consumers about the advantages and differences over the competitors.
2.Planning and implementing brand marketing programmes:
Building brand equity requires properly positioning the brand in the minds of customers and
achieving as much brand resonance as possible. The process depends on three factors:

a) Choosing brand elements: The most common brand elements are brand names,
URLs, logos, symbols, characters, packaging, and slogans. The best test of the
brand-building contribution of a brand element is what consumers would think
about the product or service if they knew only its brand name or its associated logo
or other element e.g. Nike Swoosh. McDonalds’ M (Golden Arc) LIC zindagi ke
sath bhi, Zindagi ke badh bhi, Amul Girl, 7 up Green bottle etc.
b) Integrating the brand into marketing activities and the supporting marketing
programme: The biggest contribution comes from marketing activities related to
the brand. It is an important step because it bridges the gap between planning and
implementation.
c) Leveraging secondary associations: The third and final way to build brand equity
is to leverage secondary associations. E.g. the brand may be linked to certain
source factors, such as the company (through branding strategies), countries or
other geographical regions e.g. India Gate basmati rice, Gujarat tourism etc.
3. Measuring and interpreting brand performance: To manage their brand profitably,
managers must successfully design and implement a brand equity measurement system.
A brand equity measurement system is a set of research procedures designed to provide
timely, accurate, and actionable information for marketers so that they can make the
best possible tactical decisions in the short run and the best strategic decisions in the
long run. System involves three key steps – conducting brand audits, designing brand
tracking studies, and establishing a brand equity management system
4. Growing and sustaining brand equity: Maintaining and expanding on brand equity
can be quite challenging. Brand equity management activities take a broader and more
diverse perspective of the brand’s equity – understanding how branding strategies
should reflect corporate concerns and be adjusted, if at all, over time or over
geographical boundaries or multiple market segments.
CUSTOMER-BASED BRAND EQUITY MODEL (CBBE)

Two questions often arise in brand marketing:

(a) What makes a brand strong? and
(b) How do you build a strong brand?
• To help answer both the questions, CBBE model was introduced.
The CBBE concept approaches brand equity from the perspective of the consumer – whether
the consumer is an individual or an organisation or an existing or prospective customer. The
model understands the need and wants of customers or an organisation and devising products and
programmes to satisfy their needs and wants.
The basic premise of the CBBE concept is that the power of a brand lies in what customers
have learned, felt, seen, and heard about the brand as a result of their experiences over time. In
other words, the power of a brand lies in what resides in the minds and hearts of customers.
The CBBE concept provides a unique point of view on brand equity is and how it should be built , measured
and managed

The challenge for marketers in building a strong brand is ensuring that customers have the
right type of experiences with products and services and their accompanying marketing
programmes so that the desired thoughts, feelings, images, beliefs, perceptions, opinions, and
experiences become linked to the brand.

CBBE model has three key ingredients to this definition:

(a) Differential effect: Brand equity arises from differences in consumer response. If no
differences occur, then the brand-name product can essentially be classified as a
commodity or a generic version of the product. Competition, most likely, would then
just be based on price.
(b) Brand knowledge: The differences in response are a result of consumers’ knowledge
about the brand, that is, what they have learned, felt, seen, and heard about the brand as
a result of their experiences over time. Ultimately it depends on what resides in the
minds and hearts of consumers.
(c) Consumer response to marketing: Customers’ differential responses, which make up
brand equity, are reflected in perceptions, preferences, and behaviour related to all
aspects of brand marketing, for example, including choice of a brand, recall of copy
points from an ad, response to a sales promotion, and evaluations of a proposed brand
Extension.
E.g. When a customer wants to make a choice of buying a car/bike. He will look at all the
brands that are available, will search the net for information, go for test drive, discuss with
friends,reference groups and family and then finally will make decision. The decision will be
strongly influenced by knowledge he or she has accumulated about the brand from these various
resources
 SOURCES OF BRAND EQUITY

Brand Awareness:
People will often buy a familiar brand because they are
comfortable with the brand. Or there may be an assumption
that a brand that is familiar is probably reliable, in business to
stay, and of reasonable quality. A recognized brand will thus
often be selected over an unknown brand. The awareness factor
is particularly important in contexts in which the brand must
first enter the consideration set. It must be one of the brands
that are evaluated.
-your product is the first that comes to mind in a certain product
category
Brand Awareness: Brand awareness consists of brand recognition and brand recall
performance
❖ Brand recognition is consumers’ ability to confirm prior exposure to the brand when given
the brand as a cue. In other words, when they go to the store, will they be able to recognize the
brand as one to which they have already been exposed.
❖ Brand recall is consumers’ ability to retrieve the brand from memory when given
the product category, the needs fulfilled by the category, or a purchase or usage situation as a cue.

In other words consumers recall of Cadbury will depend on their ability to recall the brand
when they thinks if chocolates category or what they should they eat for chocolates, whether at
the store when making a purchasing decision or at home when they decide eat.
Brand Loyalty – It is the extent to which a consumer constantly buys the same
brand within a product category. Brand loyalty exists when the consumer feels that
the brand consists of right product characteristics and quality at right price.

Perceived Quality – It can be defined as the customer’s opinion about the overall
quality or images of the product or service or the brand itself with respect to its
purpose of use as against its alternatives. It will directly influence purchase decision
and brand loyalty.

Brand Associations – These are images and symbols or anything associated with a
brand or a brand benefits and deep seated in customer’s mind.

Market Behaviour – It is a broad economic term that refers to the behaviour of

consumers, businesses, or the stock market.
 A D VA N TA G E S O F B R A N D A WA R E N E S S

There are three elements of advantages for Brand Awareness which is as follows;

(a) Learning Advantages: The first step in building brand equity is to register the
brand in the minds of consumers. If the right brand elements are chosen, the task
becomes easier
e.g. “Nimbooz” The brand name – Nimbooz – from Nimboo, Visual emphasis of
fresh lemon, Use of colours – yellow and green that associate with freshnes
Wooden lemon squeezer to give the feel. All the brand elements compliment the
brand.

(b) Consideration Advantages: Consumers must consider the brand whenever

they are making a purchase. Research has shown that consumers are rarely loyal to
only one brand. Raising brand awareness increases the likelihood that the brand
will be a member of the consideration set, that the consumer considers before
making a purchase.
© Choice Advantages: The third advantage of creating a high level of brand
awareness is that it can affect choices among brands in the consideration set,
even if there are essentially no other associations to those brands.

Establishing Brand Awareness

Creating brand awareness means increasing the familiarity of the brand
through repeated exposure, although this is generally more effective for brand
recognition than for brand recall.
The more consumers experiences the brand by seeing it, hearing it, or thinking
about it, the more likely he or she is to strongly register the brand in memory.
Thus the marketer must try to establish a strong link between various brand
elements and the brand. Name, symbol, logo, character, packaging, or slogan,
including advertising and promotion, sponsorship and event
marketing, publicity and public relations, and outdoor advertising should be
used to the advantage of the brand.

E.g. in addition to its name, Intel uses the “Intel Inside” logo and its
distinctive symbol as well as its famous four-note jingle in TV ads to enhance
awareness.
Brand Image: Once a sufficient level of brand awareness is created,
marketers can put more emphasis on crafting a brand image. Creating a
positive brand image takes marketing programmes that link strong,
favourable, and unique associations to the brand in memory. Brand
associations may be either brand attributes or benefits.
❖ Brand attributes are those descriptive features that characterise a
product or service
for e.g. Close-up Red gel is different than other toothpaste in the market.
❖ Brand benefits are the personal value and meaning that consumers
attach to the product or service attributes, e.g. Dermicool prickly heat
powder which provides instant relief and a cooling effect removing
irritation
FAC T O R S W H I C H H E L P I N C R E AT I N G
S T RO N G B R A N D I M A G E
To create a strong brand image, marketers need to make sure that some brand associations
are made which are different from those of the competitors. Unique associations help consumers
choose the brand. E.g. Dove beauty bar with ¼ moisturizer, uses dove bird as its logo. Some
factors that, In general, affect the strength, favorability, and uniqueness of brand associations

(i) Strength of brand associations: The more deeply a person thinks about product
information and relates it to existing brand knowledge, the stronger the resulting brand
associations will be. Two factors that strengthen association are its personal relevance
and the consistency with which it is presented over time. Direct associations are
particularly influential in consumers’ decisions when they accurately interpret them.
Word-of-mouth is likely to be particularly important for restaurants,
entertainment, banking, and personal services. Starbucks, Google, Red Bull, and
Amazon are all classic examples
of companies that created amazingly rich brand images without the benefit of intensive
advertising programms’.
Another classic example is PULSE hard boiled candy sold over ` 100 crore within 3 months of
launch without any advertising because it was a “discovery” brand fueled by word -of-
mouth. Marketing communication programs should use creative communications that get the
consumer thinking about the brand. They should be continuously expose communication to
customers and ensure that they don’t forget the brand.

(ii) Favorability of brand associations:

Marketers create favorable brand associations by convincing consumers that the brand
possesses relevant attributes and benefits that satisfy their needs and wants, such that they
form positive overall brand judgment. E.g. the associations that come to mind when consumers
think of FedEx may be “fast,” “reliable,” and “convenient,” with “purple and
orange packages”.
iii .Uniqueness of brand associations:
Unique associations are critical to a brand’s success. Marketers can make this unique difference
explicit through direct comparisons with competitors, or they may highlight it completely. Thus,
in almost all cases, some product category associations will be shared with all brands in the
category. However, the strength of the brand associations to the product category is an important
determinant of brand awareness.
STEPS OF BRAND BUILDING INCLUDING
BRAND BUILDING BLOCKS
The brand resonance model looks at building a brand as a sequence of steps, each of which is
dependent on successfully achieving the objectives of the previous one.
The steps are as follows:
1. Ensure identification of the brand with customers and an association of the brand in
customers’ minds with a specific product class, product benefit, or customer need.
2. Firmly establish the totality of brand meaning in the minds of customers by
strategically linking a host of tangible and intangible brand associations.
3. Bring out the proper customer responses to the brand.
4. Convert brand responses to create brand resonance and an intense, active loyalty
relationship between customers and the brand.
BRAND BUILDING BLOCKS-KEVIN LANE
KELLER
These four steps represent a set of fundamental questions that customers invariably ask about
brands:
1. 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)
There is a relationship between all steps until the former is not completed the latter will not
make sense.
BRAND BUILDING BLOCKS-KEVIN LANE
KELLER
SUB-DIMENSIONS OF BRAND BUILDING BLOCKS
Building blocks up the left side of the pyramid represent a more “rational route” to brand
building, whereas building blocks up the right side of the pyramid represent a more “emotional
route.” Most strong brands are built by going up both sides of the pyramid. Let’s try to
understand each of the building blocks in detail;

Who are you? (brand identity)

1. Brand Salience: Achieving the right brand identity means creating brand salience with
customers. Brand salience measures various aspects of the awareness of the brand and how easily
and often the brand is evoked under various situations or circumstances.
Brand awareness refers to customers’ ability to recall and recognise the brand under
different conditions and to link the brand name, logo, symbol, and so forth to certain
associations in memory. The breadth of brand awareness measures the range of
purchase and usage situations in which the brand element comes to mind and depends to
a large extent on the organisation of brand and product knowledge in memory.
E.g.
Tropicana Juice. The depth would be that whenever Orange juice is
mentioned the consumer thinks about Tropicana. The breadth would be the
various occasions the consumer thinks having Tropicana juice. Does the consumer
only think of Tropicana juice as a type of beverage to drink, especially when
seeking a “tasty but healthy” beverage? A highly salient brand is one that has both
depth and breadth of brand awareness.
Brand Meaning – What Are You?

2.Brand Performance: Designing and delivering a product that fully satisfies consumer
needs and wants is a requirement for successful marketing. It is important for the brand
to meet customer’s expectations. If the brand surpasses customer expectation it creates
customer delight. Brand performance describes how well the product or service meets
customers’ more functional needs. The strongest brands excel because they offer
performance advantage which the competitors cannot match up.
3.Brand imagery: Brand imagery depends on the extrinsic properties of the product or
service, including the ways in which the brand attempts to meet customers’
psychological or social needs. It is the way people think about a brand abstractly, rather
than what they think the brand actually does. Thus, imagery refers to more intangible
aspects of the brand, and consumers can form imagery associations directly from their
own experience or indirectly through advertising or by some other source of information,
such as word of mouth. E.g. Raymond the textile brand with some of its intangible
associations such as family, elegant and classic/timeless
(a) User imagery: One set of brand imagery associations is about the type of person or
organisation who uses the brand. Celebrities, sportspersons, entertainers or
politicians may be used to create user imagery.
(b) Purchase and usage imagery: A second set of associations tells consumers under
what conditions or situations they can or should buy and use the brand. E.g. BIG
BAZAAR offers special discounts on Wednesday “SAB SE SASTHA DIN”.
thus creating an occasion for them to buy.
(c) Bran d personality and values: Through consumer experience or marketing
activities, brands may take on personality traits or human values and, like a person,
appear to be “modern,” “old-fashioned,” “lively,” or “exotic”. Marketing
communication and advertising are influential in shaping the brand personality of a
product. Consumers often choose and use brands that have a personality. E.g.
Thumps Up – Ruggedness, Outdoor ,Dove – feminine.
d) Brand history, heritage, and experiences: Finally, brands may take on
associations to their past and certain noteworthy events in the brand’s history.
These types of associations may recall distinctly personal experiences and episodes
or past behaviours and experiences of friends, family, or other e.g. Colgate.

4.Brand Judgments – It refers to customers’ personal opinions about and evaluations of brand,
which consumers form by putting together all the different brand performance and imagery
associations. Your customers constantly make judgments about your brand and these fall into four
key categories:
• Quality: Customers judge a product or brand based on its actual and perceived quality.
• Credibility: Customers judge credibility using three dimensions – expertise (which includes
innovation), trustworthiness, and likability.
• Consideration: Customers judge how relevant your product is to their unique needs.
• Superiority: Customers assess how superior your brand is, compared with your competitors'
brands.
•
 5.Brand Feelings – It refers to customers’ emotional responses and reactions to the
brand according to how it makes them feel. According to the model, there are six
positive brand feelings: warmth, fun, excitement, security, social approval, and self -
respect

6.Brand Resonance - It focuses on the ultimate relationship and level of identification that the
customer has with the brand. You have achieved brand resonance when your customers feel a
deep, psychological bond with your brand. Keller breaks resonance down into four categories:
• Behavioral loyalty: This includes regular, repeat purchases.
• Attitudinal attachment: Your customers love your brand or your product, and they see it as a
special purchase.
• .
• Sense of community: Your customers feel a sense of community with people
associated with the brand, including other consumers and company representatives.
• Active engagement: This could include joining a club related to the brand;
participating in online chats, marketing rallies, or events; following your brand on
social media; or taking part in other, outside activities
• Thank you