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