BRAND EQUITY

What is Brand Equity?

1.

In layman terms, brand equity is the value that a consumer

attaches to a certain brand.

2.

So, Brand equity refers to the value of a brand.

3.

A set of assets such as name, awareness, loyal customers,

perceived quality and associations that are linked to the brand
(its name and symbol) and add (or subtract) value to the
product or service being offered.

4.

Brand equity is defined as the bundle of intrinsic

features/attributes delivered by a branded product or service.
It is measured as the price differential someone is willing to
pay for a particular branded product or service over an
identical product or service that is unbranded.

5.

Brand Equity is created through aggressive mass marketing

campaigns. Good examples are companies like Nike and
Coca Cola whose corporate logos earn worldwide
recognition.

Drivers of Brand Equity

Brand
Awareness

Perceived
Quality

Brand
Equity

Brand
Loyalty

Brand
Associations

Other
Proprietary
Brand Assets

Providing value to customers

Short cut for interpreting, processing and storing

information

Gives confidence in the purchasing decision

Enhances use satisfaction

Providing value to the firm

Enhance the effectiveness and efficiency of marketing

programs

Decrease brand switching

Higher prices and margins

Trade leverage

Competitive advantage

Calculating the value of brand

equity

Price premiums

Customer preference

Replacement cost

Stock price movements

The five elements/drivers of

brand equity

a.

Brand loyalty

Measures a customers attachment to a brand

Is at the core of brand equity

Is affected by the four other elements of brand equity

Directly translates into future sales

Levels of loyalty
Committed Buyer
Brand is a friend
Satisfied buyer
with
switching costs
Satisfied/Habitual buyer
No brand loyalty

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How brand loyalty creates

value
Reduced marketing costs
Trade leverage
Brand loyalty

Attracting new customers

Time to respond to
competitive threats

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Creating Loyalty
Treat the customer right
Stay close to the customer

Brand loyalty

Measure and manage

satisfaction
Create switching costs

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Provide extras

b.

13

Brand Awareness

How quickly or easily a given brand name comes to

mind when a specific product category is
mentioned.

The ability of a potential buyer to recognize or recall

a brand

aided

unaided

The Awareness Pyramid

Top of Mind

Brand Recall
Brand Recognition

Unaware of
Brand

14

Brand Awareness
Anchor to which other associations
can be attached
Familiarity - Liking

Brand Awareness

Signal of Substance/commitment

Brand to be considered

15

Ways to Achieve Awareness

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Be different, memorable

Involve a slogan or jingle

Symbol exposure

Publicity

Event sponsorship

Using cues

Brand extensions

c.

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Brand Association

The linking of a brand to other favorable images.

Anything linked in memory to a brand.

Strengths of the association

The more links the stronger the association

How Brand Associations create value

Help Process/Retrieve Information

Differentiate/Position

Associations

Reason to buy

Create Positive Attitudes/Feelings

Basis for Extensions

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What is Brand Extensions:

Vertical Extensions

Types of approaches

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Value vs Upscale positioning

New Brand
Repositioning Entire Brand
Using Sub-Brands
Co branding

Types of Associations
Product
Country/

Attributes

Competitors Geographic

Intangibles

Benefits

Area
Product
Class

Customer

Brand Name and

Symbol

Relative
Price

Use/

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Life Style/

User/

Personality

Customer

Celebrity/
Person

application

Measures of Brand Association

Understanding Brand Meanings

Indirect method

Scaling Brand Perceptions

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Free Association
Picture Association
Dissecting the decision Process

Multi-dimensional scaling

Deciding which Associations

Self Analysis

Target Market

Provide reason to buy and added value

Competitors Associations

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Consistent with brand attributes and perceptions

differentiate

d.

Perceived Quality

It is the customers perception of the overall quality or

superiority of a product or service with respect to its

intended purpose, relative to alternatives

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It Differs From...

Actual or objective quality - the extent to which the

product or service delivers superior value

Product-based quality - the nature and quantity of

ingredients, features or services included

Manufacturing quality - conformance to specification,

the zero defect goal

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In the long run, the most important single factor

affecting a business units performance is the [relative
perceived] quality of its products and service, relative
to those of competitors
- Robert Buzzell and Bradley Gale
The PIMS Principles

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How Perceived Quality Generates

Value

Reason-to-Buy
Differentiate/Position

Perceived Quality

A Price Premium

Channel Member Interest

Brand Extensions

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What influences Perceived Quality

Product Quality

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Service Quality

Performance

Tangibles

Features

Reliability

Conformance

Competence

Reliability

Responsiveness

Durability

Empathy

Serviceability

Delivering High Quality

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Commitment to quality

A quality culture

Customer input

Measurement/goals/standards

Allow employee initiative

Customer expectations

Signals of High Quality

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Longer warranty = better car

More suds = more effective cleaning

Fresh squeezed orange juice = better than frozen

More patients in waiting room = skilled doctor

High price = high quality

Making Perceptions Match Actual

Quality

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Manage signals of high quality

Communicate a quality message

An effective warranty

An outside, unbiased conformation of quality

e. Other Proprietary Brand Assets

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Patents
Trademarks
Copyrights
Licenses
Channel Relationships
Employees
Customer Lists

Which Driver is Most Important?

Varies by stage of the product life-cycle.
Introductory phase:

awareness

Growth phase:

awareness, association, perceived

quality, proprietary brand assets

Maturity phase:

loyalty,
association

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perceived

quality,