Customer-based brand equity and brand positioning
Definition:
- Approaches brand equity from the perspective of the consumer
- Stresses that the power of a brand lies in what resides in the minds and hearts of customers
- Differential effect that brand knowledge has on consumer response to the marketing of that brand
Marketing advantages of strong bonds
- Improved perceptions of product performance
- Greater loyalty
- Less vulnerability to competitive marketing actions
Brand equity as a bridge
- Customer knowledge drives the differences that manifest themselves in brand equity
- From perspective of CBBE concept, brand knowledge is key to creating brand equity
- Marketers need an insightful way to represent how brand knowledge exists in consumer memory
- Associative network memory links: Views memory as network of nodes and connecting links
- Brand associations are informational nodes linked to brand node in memory
- Brand knowledge has 2 components: Brand awareness and brand image
Sources of brand equity
Brand awareness
- Advantages: Learning, consideration, choice
- Anything that causes consumers to experience one of brand’s element can increase familiarity and awareness of that brand element
- Repetition increases recognizability
Brand image
- Once a sufficient level of brand awareness is created, marketers can put more emphasis on crafting a brand image
- Creating positive brand image
- Brand associations may either be brand attributes or benefits
- Strength of brand associations: More deeply person thinks about product information and relates it to existing brand knowledge, stronger is resulting brand association
- Favorability of brand associations: Higher when brand possesses relevant attributes and benefits that satisfy consumer needs and wants
- Uniqueness of brand association: USP of product
Identifying and establishing brand positioning
Basic concepts
- Brand positioning: Act of designing company’s offer and image so that it occupies distinct and valued place in target customers’ minds
- Finding proper location in minds of consumers
- Allows consumers to think about product or service in right perspective
Target market
- Market segmentation: Divides market into distinct groups of homogeneous consumers who have similar needs and consumer behavior
- Involves identifying segmentation bases and criteria
Consumer segmentation
- Behavioral: User status, usage rate, etc
- Demographic: Income, age, etc
- Psychographic: Values, opinions, etc
- Geographic: International, regional
Business-to-business segmentation bases
- Nature of good: Kind, where used, etc
- Buying condition: Purchase location, who buys, etc
- Demographic: SIC code, number of employees, etc
Nature of competition
- Competitive analysis considers array of factors: Resources, capabilities, etc
- When choosing market, marketers must consider indirect competition and multiple frame references
Points of parity (POP): Not necessarily unique to brand but may be shared with other brand
E.g. of negatively correlated attributes and benefits
- Low price vs high quality
- Taste vs Low calories
- Nutritious vs good tasting
Positioning guidelines
Defining and communicating the competitive frame of reference
- Communicating category benefits: Marketers use product benefits to announce category membership
- Exemplars: Well-known, noteworthy brands in a category can also be used as exemplars to specify brand’s category membership
- Product descriptor: Product descriptor that follows brand name is often very compact means of conveying category origin
Points of difference (POD): Attributes that consumers strongly associate with brand
Choosing POD
- Brand must offer compelling and credible reason for choosing it over other options
Establishing POP and POD
- Key to branding success is to establish both POP and POD
- At times, inverse relationship between POP and POD may exist in minds of consumers
Straddle positions
- Type of positioning where company is able to straddle 2 frames of reference
Updating positions over time
- Generally, positioning should be fundamentally changed infrequently
- Yet, positioning will evolve to better reflect market opportunities or challenges
- POP or POD may be refined, added, dropped as situation dictate
- Laddering: Deepening the meaning of brand to permit further expansion
- Reacting: Responding to competitive actions that threaten an existing positioning
Developing good positioning
- Good positioning: Has foot in present and foot in future
Defining brand mantra
- Brands may span multiple product categories and may have multiple distinct positioning
- As brands evolve and expand across categories, marketers will want to craft brand mantra that reflect essential heart and soul of brand
Brand mantra
- Short, 3-to-5-word phrase
- Provides guidance about what products to introduce under brand, what ad campaigns to run, etc