Brands & Brand Equity

Consumers buy products; they choose brands!

 What is a brand?

 A brand is a name, term, sign, symbol, or design, or a

combination of them, intended to identify the goods
and services of one seller or group of sellers and to
differentiate them from those of competition
- American Marketing Association (AMA)

 The different components of a brand that identify and

differentiate it are brand elements
 What does a brand convey?
A brand can convey up to 6 levels of meanings :
 Attributes

 Benefits
 Values & Culture
 Personality
 User
 A brand is therefore more than a product,
as it can have dimensions
that differentiate it in some way
from other products designed to satisfy the same need
Some brands create competitive advantages
with product performance.

Other brands create competitive advantages

through non-product-related means
 Can everything be branded?
 Ultimately a brand is something that resides in the
minds of consumers
 The key to branding is that consumers perceive
differences among brands in a product category
 Even commodities can be branded:
 Coffee (Narasus)
 Water (Bisleri)
 Flour (Annapurna)
 Salt (Captain Cook)
 Pickles (Ruchi)
 Chicken (Suguna)
 The bottom line is that any brand
- no matter how strong at one point in time -
is vulnerable, and susceptible to poor brand management
 Strategic Brand Management

It involves the design and implementation of

marketing programs and activities
to build, measure, and manage brand equity
Strategic Brand Management Process

Steps Key Concepts

Identify and establish
brand positioning and values
Mental maps
Competitive frame of reference
Points-of-parity and points-of-difference
Core brand values
Brand mantra

Plan and implement Mixing and matching of brand elements

brand marketing programs Integrating brand marketing activities
Leveraging of secondary associations

Brand value chain

Measure and interpret Brand audits
brand performance Brand tracking
Brand equity management system

Brand-product matrix
Grow and sustain Brand portfolios and hierarchies
brand equity Brand expansion strategies
Brand reinforcement and revitalization
 Why brands?
 Brand signals the source of the product
 Protects customer and producer from competitors
who have identical products
 Consumers form relationships with brands, not
products or companies
 Brand makes an emotional and trust-based connection
with consumer and distinguishes it from competition
 Why is branding critical?
 Brand loyalty is the foundation of business
 Every purchase opportunity presents itself an excuse
to change brands and shift loyalties
 Father buys cigarettes every day
 Mother buys diapers every week
 Family buys groceries every month

 Branding determines status quo vs. shift

 Why is it hard to build brands?
 Proliferation of competitors
 Pressure to compete on price
 Fragmenting markets and media
 Complex brand strategies and relationships
 Bias towards changing strategies
 Bias against innovation
 Pressure to invest elsewhere
 Short term pressures
Brand Equity
 Brand Equity is a set of assets
linked to a brand’s name and symbol
that adds to the value provided by a product or
service
to a firm and/or that firm’s customers
 Brand Equity is a set of liabilities
linked to a brand’s name and symbol
that subtracts from the value provided by a product or
service to a firm and/or that firm’s customers
 Brand equity: Key aspects
 Brand equity is a set of assets
 Management of brand equity involves investment to create
and enhance these assets
 Each brand equity asset creates value in a variety of
very different ways
 It is imperative to be sensitive to the ways in which strong
brands create value
 Brand equity creates value for customer and firm
 For assets or liabilities to underlie brand equity, they
must be linked to name/symbol of the brand
 Value to the customer
 Brand equity assets can help customers interpret,
process and store huge quantities of info about
products / brands
 It can affect customers’ confidence in purchase decision
 Due to past-use experience or familiarity with brand
 Both perceived quality and brand associations can
enhance customers’ satisfaction with use experience
 Knowing brand is Arrow can make user feel different
 Value to the firm
 Brand equity can enhance programmes to attract new
customers or recapture old ones
 Perceived quality, associations and known name
provide reasons to buy & affect use satisfaction
 Usually allows higher margins by permitting both
premium pricing and reduced promotions
 Can provide leverage in the distribution channel
 Brand equity assets provide a competitive advantage
that present a barrier to competitors
Tide : For extra-tough family laundry jobs
Cheer : Works in cold, warm or hot water
Gain : A detergent with fragrance
Bold : Includes fabric softener
Dash : Concentrated power
Dreft : For baby’s clothes
Oxydol : For sparkling whites
Era : Concentrated liquid detergent
Solo : Heavy duty, with a fabric softener
 Major asset categories
1. Brand name awareness
2. Perceived quality
3. Brand loyalty
4. Brand associations
 Brand awareness
 A known devil is better than an unknown angel
 Awareness refers to the strength of a brand’s
presence in the consumer’s mind
 Consumers instinctively prefer a brand that they
have previously seen to one that is new to them
 Familiar brand has an edge!
The awareness pyramid

Dominant

Top of mind

Unaided awareness

Aided awareness

Unaware of the brand

 Value of brand awareness
 Anchor to which other associations can be attached
 Provides the brand a sense of familiarity
 Customers like the familiar

 Awareness can be a signal of presence, commitment

and substance
 Awareness gets brand into the consideration set
 Giving it a chance to get purchased!
 Perceived quality
Perceived quality can be defined
as the customer’s perception of the overall quality
or superiority of a product or service
with respect to its intended purpose,
relative to alternatives
 Perceived quality
 Perceived quality is an intangible and overall feeling
about a brand
 Perceived quality cannot necessarily be objectively
determined because it is a perception
 Perceived quality could be different for the corner
store versus the department store
• Both are judged by a different set of criteria
 Perceived quality differs from satisfaction
 A positive attitude could be generated because a product of
inferior quality is very inexpensive
 Perceived quality
 Perceived quality is a brand association,
elevated to the status of a brand asset:
 Among all brand associations, only perceived quality has
been shown to drive financial performance
 Perceived quality is often a major strategic thrust of a
business
 Perceived quality is linked to and often drives other aspects
of how a brand is perceived
 Perceived vs. actual quality
 Consumers may be overly influenced by a previous
image of poor quality
 A company may be achieving quality on dimension that
consumers do not consider important
 Consumers rarely have all the info necessary to make
rational or objective judgment on quality
 Consumers may not know how best to judge quality
 Maybe looking at wrong cues
 Ex., when buying tyres
Value generated by perceived quality
 In many contexts, perceived quality provides
the pivotal reason to buy
 Could differentiate and be a principal
positioning characteristic of a brand
 Provides the option of charging a premium
price
 Could be meaningful to channel members and
thus aid in gaining distribution
 Brand loyalty
 Brand loyalty, a central construct in marketing, is a
measure of attachment that a customer has to a brand
 It reflects how likely a customer will be to switch to
another brand
 Especially when that brand makes a change, either in price
or in product features
 It is one indicator of brand equity which is
demonstrably linked to future profits
 Brand loyalty directly translates into future sales
 Brand loyalty
 A brand has value only in its potential to
create loyal customers
 It is simply much less costly to retain
customers than to attract new ones
 ‘The Hindu’

 Considering loyalty as an asset encourages and

justifies loyalty-building programmes
 Which helps create / enhance brand equity
The loyalty pyramid
Committed

Fence Sitters
Considers it a friend

Passively Loyal
With switching costs

Satisfied / Habitual Buyer

No reason to change

Switchers / Price Sensitive

No brand loyalty
 Strategic value of brand loyalty
 Brand loyalty reduces the marketing costs of
doing business
 It provides trade leverage
 Helps attract new customers
 Brand loyalty provides a firm with time to
respond to competitive threats
 Brand associations
 Brand equity is supported by associations that
consumers make with a brand
 Brand association is anything linked in memory to a
brand
 Associations include product attributes, celebrity spokesperson and
symbol

 Association not only exists but has level of strength

 A link to a brand will be stronger when it is based on many experiences or
exposures to communications, rather than few
 Will also be stronger when supported by a network of other links
 Types of associations
 Product attributes
 Intangibles
 Customer benefits
 Relative price
 Use / application
 User / Customer
 Celebrity / person
 Lifestyle / personality
 Product class
 Competitors
 Country / geographic area
 Value of brand associations
 Brand associations helps process / retrieve info
 An association can provide an important basis
for differentiation
 Many brand associations involve product
attributes or customer benefits that provide
specific reason to buy
 Some associations are liked and stimulate
positive feelings that get transferred to the brand