Food Marketing APEC 4451

Fall Semester 2009 Why Brand Equity

Brand Development • Value Model … from an Economist’s

and Brand Equity standpoint:

Value = Goods and Services Provided

Price Paid

Dennis J. Degeneffe
The Food Industry Center
University of Minnesota

A Marketer’s Version
The Issue
of the Value Equation
• The best value is some combination of the:
– Most goods & services
– Highest quality goods & services • The development of brand equity improves
– Lowest price. the value equation:
• Therefore the competitive edge goes to the:
– Low cost “provider”
– Those willing to take the least profit Value = Goods and Services Provided + Brand Equity
• Assuming there is a large field of competitors Price Paid
(or potential competitors) this is not a very
attractive business proposition in the long run.

Impact of Brand Equity Creating True Brand Equity

• What is brand equity?

• Brand Equity:
– The ability to capture a place in the minds
– Adds value beyond the costs incurred in
of consumers
providing the goods and services
– To be a relevant / preferred option with
– Makes your business relevant in the minds of the
respect to a particular area of need.
consumer.
– Enhances profitability. • Therefore it is more than a Brand Name/
– Creates a long term competitive advantage Slogan/Jingle, it needs to be:
– In the brand’s DNA
– And connected to consumer needs.
 Focus on the Customers Conventional Perspective

• Must FIRST understand why customers behave as

they do
• Then understand what our brands can/could do for
them.
• Note …this tends to be backwards from the
conventional way to think about business.

“The real voyage of discovery consists Viewing Through a Product Lens:

not in seeking new lands, but in seeing •What it is
with new eyes.”
-Marcel Proust •What it is made of
•Physical characteristics

Alternative Approach Creating Relevance

• You can’t be everything to everybody.

• Whose needs can we satisfy best:

– Types of customers The Who
• The job of Segmentation
– Types of situations The When
• Specific needs
– Functional
– Emotional

• Create strategies and plans that deliver against those

needs:

View the Consumer World as it is.

Examples Brand Equity & Positioning

• Nike “Just do it!”

It’s about understanding current customer
• Chevy Trucks “Like a rock”
perceptions of our brand and then improving it
• Michelin Tires “So Much is Riding …” through the consistent communication of compelling
• Pillsbury Sweet Rolls “My heart to yours” benefits.
• UPS “What Brown can do”
• MasterCard “Priceless”
Sometimes we stumble over the truth … but we
• Capital One “No Hassle” normally manage to pick ourselves up, walk around it and
• AMEX Financial “Make life rewarding” carry on.”
-Winston Churchill

¯All grounded in consumer need!

 Understanding Brand Equity
• What key facts and feelings define our brand
in the minds of consumers?
• What is the single-minded expression of the
most compelling, distinctive and credible thing
our brand can do for the customer?
• What key brand benefit can be used to
position our brand in the customer’s mind
relative to his/her needs and competitor
benefits?
Benefits of Understanding
Brand Equity
• Motivating, consistent and therefore
highly effective brand communication
• Guidelines for brand development
decisions – including innovation.
• A common language for an
organization.
A few Case Studies
Brand Evolution
• The end result is to credibly fulfill an important
human need better than competition.
• When our brand becomes synonymous with the
fulfillment of that need, it will grow as we single-
mindedly execute marketing initiatives.
Impact and Measurement
• Consistent brand definitions over time – will
not change with changes in management or
agency account teams.
• Brand awareness will grow among customers.
• Advertising will have stronger business sales
impact.
• Brand distinctiveness and image ratings will
increase
• Brand growth will accelerate.
Progresso Soup
• Was highly regional, trade promotion intensive brand.
• Long track record of mediocre advertising, at best.
– Low brand awareness.
– Advertising actually tended to drive Campbell’s sales more.
• Process resulted in
– Identifying a core consumer target – Young health oriented
adults.
– Differentiating motivating, credible message – Ingredients and
taste experience you will appreciate.
• Result:
– Strong copy test scores
– Dramatic in-market sales effect.
 Create-A-Meal! Louis Rich
• Acquired by Oscar Mayer in late 1970’s as
• Both a success and a failure. brand of the future.
• Strong growth through 1980’s
• Initially miss-understood the consumer – Distribution
target. – Sku’s
• When target was properly defined a – Turkey implied health benefit

powerful insight was identified. • Growth stalled in 1990

• Insight discovered, and used to reposition
• Resulted in highly affective advertising. brand.
• Effort did not go far enough – but – Jumpstarted brand growth
– Spawned significant new products – i.e.
Stouffer’s did! Carving Board

Brand Mapping Process

• A systematic way to evaluate brand and

market data.
• Results in a point of clarity on the most
compelling benefit our brand offers
Brand Mapping
customers.
• Enables a marketer to respond to
competitive challenge but still be
relentless in keeping a brand sharply
defined in the customer’s mind.

General Approach Overall Brand Mapping Process

Advertising
• Understanding the market – the customer.
• Understanding current brand equity.
Step 5 & Promotion
• Understanding competitive brand equities. Step 1 Step 2 Step 3 Step 4 Ongoing

• Developing branding strategies to: Define

Customer
Develop
Current
Develop
Key
Conduct
Brand
Complete
Brand Map
Packaging

– Reinforce Target and

Insight
Core
Meaning
Brand
Benefit
Positioning
Session
Determine
Implications
– Evolve Pricing

Develop
– Restage Competitive PR/
Brand “The shortest way to do many Sponsorship
• Evaluating alternatives. Map(s)
things is to do only one thing at
• Developing communications to support once.” -Samuel Smiles Direct
Marketing
brand.
 Defining The Consumer Target A Sometimes Disturbing Thought
• Starts with a review of historical knowledge on the
customer and the brand.
We typically do not have strong
– Sales Relationships
empathy with our customer.
– Focus Groups “Don’t Know your past, don’t
know your future.”
– Surveys -Bob Marley
– Segmentation
• To supplement / enrich understanding custom
research may be needed.

“Measure what is measurable, and make

measure what is not so.” Therefore We Need To Talk
-Galileo Galilee To Them

Custom Research Importance of Targeting

• Objective is to understand consumer
target(s), and extract penetrating customer
insights.
• Can be quantitative or qualitative or both.
• Identify functional needs
– Individual / Type of organization
– Jobs the product must do.
• But additionally should involve potentially
more powerful connections:
– Affinity toward the brand
– Needs and motivations surrounding the
purchase/usage of the brand and competitive
brands.

Ways to Target Consumers Understanding Competition

• What business are we in.

• Geography – Southeast, Metro areas, etc. • Who is direct competition.
• What is their brand essence/key brand benefits,
• Demographics – Households with children, price.
Seniors, etc.
• How can we:
• Lifestage – College students, expecting moms – Differentiate ourselves
– Claim a “higher ground”
• Behavior – Heavy brand users, competitive brand
users

• Attitudes – Topic of next lecture.

 Defining Diageo Model for Identifying
Current Core Meaning Current Core Meaning
• Collaborative effort among all stakeholders: 1. 2.
– Management
– Brand Management / Marketing
Facts/Symbols that
– Advertising Agency
Support Brand Claims
– Strategic Planning
Core
– Sales 5. Meaning
• Likely will involve further qualitative research to 7.
probe brand perceptions, and stimulate team
thought. Brand
6.
Personality
• Mind set is key:
– Need to get it right if we have to stay here all night!
– Tolerance to detail 3.
4.

2000 Pillsbury Equity

Examples of Core Meaning
Makes Me Slow Easy
Down Hard to Resist

Connects With Family Tasty

• Michelin – Safety, Security, Family Protection
Satisfies Traditional

Rational Delights My Senses Warm

• Coca Cola – Real, Energizing, Connected
Bake-Up
Aspects
Allows Me To
The Doughboy
Blue
Barrelhead
Inviting Aroma • Nike – Challenge, Involvement, Achievement
Contribute
Baked Goods • BMW – Technology, Control, Elegance
Enhances the
Popping Can DELIGHT Poke and Giggle
Meal
Invokes Memories Core
Treat
• Green Giant – Lifesource, Health, Balance
HEART & SOUL
Connected Helpful Meaning
REUNION Dependable

A Real Mom Playful Genuine

Caring & Loving
In Control Lovable Loyal
Fun
Emotional Cheerful Optimistic Open
Aspects Valued
Family Centered
Accomplished
Got it Together
Re-grounded
A Good Mom
Balanced

A Caveat to
Leveraging Brand Equity
Marketplace Execution
• Reflect Positioning in all marketing mix • Major difference exists in What we want to
elements: communicate versus How it is said.
– Advertising • Often customers need to make a mental connection
… saying it directly might not be sufficient.
– Promotion
– Packaging • Need “creative messaging”.
– Pricing • But also should confirm with research.
– PR / Sponsorship
– Direct Marketing
• Define contributing strategy statements.
• Use on continuing basis in the development
of new marketing initiatives.
 Example
“Fulfilling a Human Need”
• Industrial Cleaning Product
• Historically brand was functionally focused
• Conducted among customers.
– Defined customer as buyer of Cleaning Supplies –
typically janitorial.
– One on one interviews
• Identified a key customer insight:
“The desire to be respected by other functions in
their respective organization.”
• How might the manufacturer go beyond the
functional aspects of the product, and address the
human need?
Key Points
• It’s really brand equity that makes the value
proposition an attractive proposition to the
marketer.
• Brand equity is about capturing a special place in
the consumer’s mind.
• To do so it starts with the who and the when.
• Powerful brands go beyond the functional, and
deliver emotional benefits
• The brand mapping process is a systematic way
to understand and rally behind brand equity.
• Then the entire Marketing Mix needs to reinforce
brand equity.