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Chapter 2: Customer-based Brand Equity and Brand Positioning created by…
Chapter 2: Customer-based Brand Equity and Brand Positioning
created by Syefa Hayati
Customer-based brand equity
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Stresses the power of a brand lies in what resides in mind and heart of a customer
Acts as a differential effect
Approach brand equity from perspectives of consumers
Brand equity as a bridge
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Customer knowledge drives the differences that manifest themselves in terms of brand equity
Provides marketers with a vital strategic bridge from their past to their future
Dictates appropriate and inappropriate future directions for the brand
Making a brand strong: Brand Knowledge
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The key to create brand equity; as it creates the differential effect that drives brand equity
Marketers need an insightful way to represent how brand knowledge exists in consumer memory
Relates to the associative network memory model; which views memory as a network of nodes and connecting links
Brand associations are informational nodes linked to the brand node in memory
Has two components
Brand awareness
; relates to the strength of the brand node or trace in memory and often a step in building brand equity
Brand image
; relates to consumers' perceptions about a brand, as reflected by the brand associations held in consumer memory
Sources of Brand Equity
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Brand awareness
Consists of
brand recognition
(consumer's ability to confirm prior exposure to the brand when given the brand as a cue) and
brand recall
(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)
Advantages are such as: (1) Learning advantages (2) Consideration advantages (3) Choice advantages
Anything that causes consumers to experience one of a brand's element can increase familiarity and awareness of the brand element
Repetition increases recognizability but improving brand recall also requires linkages in memory to product aspects
Brand image
Once a sufficient level of brand awareness is created, marketers can put more emphasis on crafting a brand image
To create a positive brand image, it takes marketing programs that link strong, favorable, and unique associations to the brand in memory
Brand associations may be either brand attributes or benefits
Strength of brand association
: more deeply a person thinks about product information and relates it to existing brand knowldge, stronger is the resulting brand association
Favorability of brand association
: is higher when a brand possesses relevant attributes and benefits that satisfy consumer needs and wants
Uniqueness of brand associations
: the USP of a product which provides brands with sustainable competitive advantage
Brand equity is the worth of a brand in and itself – i.e. the social value of a well-known brand name
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Identifying and establishing brand positioning
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Basic concepts
Brand positioning – (1) which is an act of designing the company's offer and image so that it occupies a distinct and valued place in the target customers' minds, (2) Finding the proper location in the minds of consumers or market segment, and (3) Allows consumers to think about a product or service in the perspective
Target market
Market segmentation: divides the market into distinct groups of homogeneous consumers who have similar needs and consumer behavior, and also involves identifying segmentation bases and criteria
Nature of competition
A competitive analysis considers an array of factors such as resources, capabilities, and likely intentions of various other firms. The analysis helps marketers to choose markets for their own products or services. When choosing a market, marketers must consider: (1) indirect competition and (2) multiple frames reference
Points-of-parity and points-of-difference
A marketer must arrive at the proper positioning which this requires establishing the correct points of difference and points-of-parity associations
Points-of-difference (PODs): formally defined as attributes or benefits that consumers strongly associate with a brand
Points-of-parity associations: not necessarily unique to the brand but may be shared with other brands
Positioning guidelines
(1) Defining and communicating the competitive frame of reference
(2) Choosing points-of-difference
(3) Establishing points-of-parity and points-of-diference
(4) Straddle positions
(5) Updating position overtime
(6) Developing a good positoning
(7) Defining brand mantra
