Building, Measuring, and Leveraging Strong Brands

Professor Steve Hoeffler Beta Gamma Sigma: Atlanta Area Alumni Chapter Tuesday, February 19th

Branding: Roadmap and Sources

1) Define Brand Equity 2) Evaluate a Model for Building Brand Equity 3) Use Starbucks example throughout for hands-on learning Sources:
1) Strategic Brand Management by Kevin Lane Keller 2) The Marketing Advantages of Strong Brands by Steve Hoeffler & Kevin Lane Keller (Journal of Brand Management, Aug, 2003) 3) Building Brand Equity through Corporate Societal Marketing by Steve Hoeffler and Kevin Lane Keller (Journal of Public Policy and Marketing, Spring, 2002) 4) How Social-Cause Marketing Affects Consumer Perceptions by Paul Bloom, Steve Hoeffler, and Kevin Lane Keller Sloan Management Review, Winter 2006
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First: Lets understand what a brand is What Do You Think Of When You Hear?

Cadillac

At your table -- discuss all of the thoughts that come to mind

Understanding brands: How information about brands is stored

Associative Network Memory Model

network of nodes and links nodes: stored information or concepts links: strength of the association between nodes

Accurately portrays in detail all salient brand associations and responses for a particular target market (e.g., brand users)

Can create a mental map by asking consumers for their top-of-mind brand associations (e.g., When you think of this brand, what comes to mind?).

Performance (product-related) Imagery (non-product-related)

Recall: based on the concept of spreading activation

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Starbucks Mental Map - Team Exercise

Components of Brand Knowledge:

Brand Awareness = strength of the brand node or trace in memory

Brand Recall

(retrieval given need, product category or some cue)

Key to Recall: linkages to Product Category, Purchase Situation, Usage Situation

(confirm prior exposure)

Brand Recognition

Increase familiarity through repeated exposure

Hence the importance of Integrated Marketing Communications

Use a wide range of communications options

Advertising, Promotions, Sponsorship, PR

Depth versus Breadth of Awareness

Amazon example

Components of Brand Knowledge: BRAND IMAGE

Brand Image = consumer perceptions of the brand as reflected by the associations held in memory Brand Meaning based on the number and content of nodes that are connected to the brand in memory For competitive advantage need:

Strong (based on amount of processing)

(personal relevance, consistency)

Favorable (based on consumer needs)

Unique (associations not shared by competitors)
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Framework for understanding how strong brands gain an advantage: CBBE Model

Customer Based Brand Equity (CBBE) = the differential effect that brand knowledge has on consumer response to the marketing of the brand Differential Effect (necessary) Brand Knowledge (in the minds of consumers) Consumer Response (perceptions, preferences, behavior)

Building Brand Equity NEW FRAMEWORK

Most research on brands has focused on advantages of strong brands Less is known about the most effective ways to build brand equity New Framework: Core Brand Values Pyramid

developed by Kevin Keller

building blocks to accomplish necessary steps to building brand equity

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BRAND PYRAMID
Stages of Brand Development
4. RELATIONSHIPS = 4. RELATIONSHIPS = What about you & me? What about you & me?

Building

Blocks

Branding Objective at Each Stage

INTENSE, INTENSE, ACTIVE LOYALTY ACTIVE LOYALTY

RESONANCE

COLD
3. RESPONSE = 3. RESPONSE = What about you? What about you? JUDGMENTS FEELINGS

HOT
POSITIVE, POSITIVE, ACCESSIBLE ACCESSIBLE REACTIONS REACTIONS

2. MEANING = 2. MEANING = What are you? What are you?

PERFORMANCE

IMAGERY

STRONG, FAVORABLE POINTS-OF-PARITY & UNIQUE BRAND & DIFFERENCE ASSOCIATIONS

1. IDENTITY = 1. IDENTITY = Who are you? Who are you?

SALIENCE

DEEP, BROAD DEEP, BROAD BRAND BRAND AWARENESS AWARENESS

RECENT EXAMPLE: (COLD path of pyramid) Building Utilitarian associations to a Brand

Cadillac transforming their image via performance

From Car and Driver Review:

With a folding hardtop that completely disappears at the touch of a button, the XLR presents a sleek and clean profile Under the XLRs hood lies its most significant major mechanical distinction the 4.6 liter Northstar V-8upgraded in a variety of ways for improved performance, emissions, and fuel economy Early Ads showed classic Cadillacs morphing into models (heritage) New Ads focus on performance (engineering & speed)

New Ad Strategy is to move from heritage to performance

Benefits to revitalizing the Cadillac brand

Average age of buyers has dropped Resale values are rising

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Now What Do You Think Of?

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Brand Positioning

Essence: Brand has some sustainable competitive advantage (SCA) or unique selling proposition (USP) that gives consumers a compelling reason to buy that particular brand Competition-Based Positioning

Identify the Appropriate Category Distinguish from Other Category Members on Important Dimension Strongest Positions: Brand has Clear Point of Difference on Benefit that Prompts Category Use

Brand Essence

Example: Tide -- superior cleaning power

Abstract Benefits

Image-Based or Goal-Based Positioning

Depict Brand or Category as way to Satisfy Consumer Goal Laddering Up Inferences are like rungs on a ladder and become more abstract and general as you go up

Benefits

Attribute/Image

General Belief: Abstract > Competition

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Recent Example: NASCAR Associations Positioning Behavior

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Recent Example: NASCAR Associations Positioning Behavior

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Recent Example: NASCAR Associations Positioning Behavior

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Recent Example: NASCAR Associations Positioning Behavior

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Brand Positioning: Understand Brand Meaning

Core brand associations

Set of abstract associations that characterize the 5-8 most important aspects or dimensions of a brand.
Can serve as the basis of brand positioning in terms of how they relate to points-of-parity and points-of-difference Challenge is to maximize the coverage of the mental map to include all relevant associations while making sure each core brand associations is as distinct as possible

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Starbucks Core Brand Associations Team Exercise

1)

2)

3)
5)

4)
6)

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Brand Positioning Conduct Competitive Analysis

Competitive frames of reference

Nature of competition Target market

Points-of-parity shared brand values

Necessary Competitive

Points-of-difference unique brand values

Desirable Deliverable

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Brand Positioning Identifying & Choosing POP & POD

Desirability criteria (consumer perspective)

Personally relevant Distinctive & superior Believable & credible Feasible Profitable Pre-emptive, defensible & difficult to attack

Deliverability criteria (firm perspective)

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Starbucks Competitive Positioning Team Exercise

Competitor
1) Fast food chains & convenience shops

POP

POD

2) Supermarket Brands
(for home)

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3) Local Caf

Brand Positioning III: Capture Brand Essence

Brand mantras

Short 3-to-5 word phrases that capture the irrefutable essence or spirit of the brand.
Nike = Authentic Athletic Performance Disney = Fun Family Entertainment

Brand mantra must clearly delineate what the brand is supposed to represent and therefore, at least implicitly, what it is not
Brand mantras typically are designed to capture the brands points-of-difference, i.e., what is unique about the brand.

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Brand Mantras

To arrive at the final brand mantra, the following considerations should come into play.

Communicate. A good brand mantra should define the category (or

categories) of business for the brand and set the brand boundaries. It should also clarify what is unique about the brand.

Simplify. An effective brand mantra should be memorable. As a result, it

should be short, crisp, and vivid in meaning.

Inspire. Ideally, the brand mantra would also stake out ground that is
personally meaningful and relevant to as many employees as possible.

Regardless of exactly how many words actually make up the mantra, however, there will always be a level of meaning beneath the brand mantra itself that will need to be articulated.
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Starbucks Brand Mantra Team Exercise

? ? ?

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Branding Takeaways

Brand Equity lies in the minds of consumers

Mental Maps w/ Core associations, POP/POD, etc.

Lots of research and knowledge about the benefits that accrue to strong brands Less is known about the right way to build strong brands Customer Based Brand Equity (CBBE) Model is useful overall framework for understanding brands Core Brand Values Pyramid is useful framework for building strong brands

Need both Performance (Cold) or Emotional Aspects (Hot)

2 key types of positioning strategies (Competition and Image)

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