Customer-based equity and brand positioning (chapter 2)

1. CHAPTER:2 Customer-Based Equıty And Brand posıtıonıng

CHAPTER:2
CUSTOMER-BASED
EQUITY AND BRAND
POSITIONING
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2. Defining Customer Based Brand Equity (CBBE)

The basic premise is;
The power of a brand lies in what customers
have learned, felt, seen, heard about the
brand as a result of their experiences over
time.
Approaches brand equity from the
perspective of the consumer
Stresses that the power of a
brand lies in what resides in the
minds and hearts of customers
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3. Let’s listen to Philip Kotler on CBBE!

https://www.youtube.com/watch?v=8W5
ycYuhrK8
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4.

Customer-Based Brand Equity
For successful brand building, 3
models will provide macro and
micro perspectives to the
managers.
These models are like matryoshka
dolls. They are interconnected
with each other.
1. Brand Positioning model (How to establish and maximize
Competitive Advantage in the minds of customers)
2. Brand Resonance model (How to create intense and actively loyal
customers; Customer Loyalty)
3. Brand Value Chain model (How to trace the value creation process to
better understand the Financial Impact of marketing expenditures
and investments)
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5. CBBE Example: Tiffany & Co.

CBBE Example: Tiffany & Co.
The Tiffany’s brand has enough equity that a price premium isn’t
just accepted, it’s expected.
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6. Figure 2.1- Marketing Advantages of Strong Brands

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7. To Sum up with an example.. TextBook page 69

c
c
Brand equity is the differential effect that brand knowledge
has on consumer response to the marketing of that brand.
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8. Identify and differentiate…REMEMBER!

Identify and differentiate…
REMEMBER!
According to AMA (American Marketing
Association)
A brand is “ 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”
2 tricky words: identify and
differentiate
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9. Building strong brands: Brand Knowledge

Key to create brand equity
Creates the differential effect that drives
brand equity
Marketers need an insightful way to
represent how brand knowledge exists in
consumer memory
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10. Associative Network Memory Model

Views memory as a network of nodes
and connecting links
Nodes - Represent stored information or
concepts
Links - Represent the strength of
association between the nodes
Brand associations are informational
nodes linked to the brand node in
memory
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11. Figure2.2 - Possible Apple Computer Associations

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12. Sources of Brand Equity

Consumers’ ability to identify
the brand under different
conditions; it is the familiarity
of the brand to the consumer
Consumers’s perceptions about
the brand
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13. Does CC need brand awareness???

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14. Brand Awareness & Advantages

Brand Awareness &
Advantages
Brand awareness: Related to the strength of the
brand node or trace in memory.
• Brand
recognition: Consumers’ ability to confirm prior
exposure to the brand when given the brand as a cue.
• (example: watching the battery ad on TV, buy it the
other day on the supermarket)
• 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.
• (example: when I talk premium cars or when I talk fast
food)
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15. Brand Image

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16. To Sum up...

To create brand equity, marketers
should:
Create favorable consumer response i.e.
brand awareness
Create positive brand image though brand
associations that are strong, favorable,
and unique
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17. Example: Body Shop Brand İmage

A succesfull global brand image without using conventional
advertising. Strong associations
to personal care and environmental concern through products
(natural ingredients, no parabens, no animal testing, packaging
(simple refillable rcycled), merchandising (brochures, displays),
supply policy (working with local producers), PR (visible and
outspoken), CSR (requiring each franchisee to run a local program),
etc.
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18. Example: The Body Shop Website

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19. Identifying and Establishing Brand Positioning

Brand positioning
Act of designing the company’s
offer and image so that it
occupies a distinct and
valued place in the target
customers’ minds
Finding the proper “location” in
the minds of consumers or
market segment
Allows consumers to think
about a product or service in
the “right” perspective
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20. Positioning examples

City Brands
NewYork (city that never
sleeps)
Paris (city of romance)
Car Brands
BMW (ultimate driving
machine)
VW ( das auto)
Axe ad:
https://www.youtube.com/wa
tch?v=OHCRWfV1q5A
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21. Identifying and Establishing Brand Positioning

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22. Market Segmentation & Target Market

Market Segmentation &
Target Market
Market segmentation: Divides the
market into distinct groups of
homogeneous consumers who have
similar needs and consumer behavior
For axe, it is ordinary, young 15-40
males.
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23. Figure 2.3 - Consumer Segmentation Bases

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24. Figure 2.4 - Business-to-Business Segmentation Bases

Figure 2.4 - Business-toBusiness Segmentation Bases
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25. Nature of Competition

Competitive analysis
Indirect competition
Multiple frames of reference: Positioning
requires a frame of reference (identifying
the target market and the nature of
competition)
BMW: ???
Who the target consumer is?
Who the main competitors are?
How the brand is similar to those competitors?
How the brand is different from them?
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26. Points of Parity and Points of Difference

Points-of-difference associations:
Attributes or
benefits that consumers strongly associate with a brand, positively
evaluate, and believe that:
They cannot be found to the same extent with a competitive brand.
Points-of-parity associations:
Attributes shared
with other brands.
Points-of-parity versus points-ofdifference: Unless certain points-of-parity can be
achieved to overcome potential weaknesses, points-ofdifference may not even matter. Example: BMW vs Mercedes
crash safety ratings. Points-of-parity are easier to achieve than
points-of-differences. People should believe the brand is good
enough.
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27. To Sum up…

To appropriately position a brand,
marketers should:
Identify their target customers
Analyze the type of competition they might
face in the identified market base
Identify product features and associations
that are different or similar to their
competitors
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28. Positioning Guidelines

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29. To Sum up ...

Brand positioning describes how a brand can
effectively compete against a specified set
of competitors
A good product positioning should:
Have a “foot in the present” and a “foot in the
future”
Identify all relevant points-of-parity
Reflect a consumer point of view in terms of
the benefits that consumers derive
Contain points-of-difference and points-of-parity
that appeal both to the “head” and the “heart”
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30. Brand Mantra

A brand mantra; short, three-to five-word phrase that
captures the irrefutable essence or spirit of the
brand positioning.
•Provides guidance about:
• What products to introduce under the brand.
• What ad campaigns to run.
• Where and how the brand should be sold.
Disney’ mantra: Fun Family Entertainment
Nike’s mantra: Authentic Athletic Performance
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31. To Sum up...

A good brand mantra should:
Communicate the category of the business
to set the brand boundaries and clarify
what is unique about the brand
Be simple, crisp, and vivid
Stake out ground that is personally
meaningful and relevant to as many
employees as possible
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32. Levels of Competition: positioning matters

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