Building and managing brand equity: toward a strong brand relationship. MKTG3118 Brands !! “A product is something that is made in a factory; a brand is something that is bought by a consumer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand, properly managed, can be timeless.” ! Steven King (former CEO JWT Advertising) Image, branding and position 3 Chapter 9 – Building and Managing Brand Equity 4 Brand Associations Brand Loyalty Brand Awareness Brand Equity Brand equity—Assets and liabilities connected to the brand Figure 9.1 Chapter 9 – Building and Managing Brand Equity 5 Elements of Brand Equity Brand Awareness Provides sense of familiarity Signal of commitment and substance Salience will help it get considered Elements of Brand Equity Brand Associations Attribute/benefit associations provide a reason-to-buy Product category—relevance Personality Organizational associations Emotional or self-expressive benefits The experience Being global Communicates value propositions Elements of Brand Equity Brand loyalty ! Reduces marketing costs ! Creates entry barriers ! Generates a positive image ! Provides time to respond to competitor moves 7 How is a Brand a Strategic Asset ! 1) Segmentation ! Strong brand associations clearly help a firm identify consumers (or segments) who relate to these characteristics and who seek similar benefits from a product or service. 2) Positioning Brands help consumers interpret product/service information in their minds through communicating brand associations and the core value proposition so as they have a clear idea of what the brand stands for relative to competitors. Eg. IKEA – value, Louis Vuitton – luxury How is a brand a strategic asset (continued) ! 3) Platform for Growth ! Strong brands make it easier for firms to enter new segments / markets, as consumers already have familiarity and trust in the brand and will accept a new product more readily. Eg. Virgin into gyms, Samsung into Telecommunications ! 4) Brand Value ! A strong brand is a source of long term profitability for the firm due to it’s ability to retain customers and generate loyalty. Enhanced Customer Lifetime value (CLV). Brands have the ability to move all the 5 forces. ! 5) Porter’s 5 Forces ! Suppliers – brands represent the maintenance of quality and supply at the best price. Eg. Trade leverage with distributors ! Customers – brands affect the ability of customers to put the firm under pressure (create switching costs) and the degree to which they are price sensitive. ! New Entrants – a strong brand is a barrier to entry as it costs time and money to create one. ! Substitutes – brands create a sense of uniqueness around a product or service, making substitution harder. ! Competition – brands exist at the very edge of competition, driving choice and creating desire beyond the simply rational. Class Exercise : Your brand as a strategic asset ! Spend a few moments thinking about the Tesla brand ! In conducting a quick brand review from the information gained in the videos decide how the brand performs as a strategic asset in; ! Strengthening the parent’s brand identity ! Supporting business development ! Enhancing or changing the brand’s image ! https://www.youtube.com/watch v=B4lkWO1TC5c ! Tesla $0 dollar marketing spend ! https://www.youtube.com/watch v=tF9r9LrOb70 Image, Branding and Positioning ! Country of origin effects ! International branding ! Brand categories ! Brand strategies ! Brand piracy 12 Branded Differentiator ! An actively managed, branded feature, ingredient or technology, service, or program that creates a meaningful, impactful point of differentiation for a branded offering over an extended period of time. Chapter 11 – Energize the Business 14 Chapter 11 – Energize the Business 15WestinWORKOUT powered by Reebok Co-Branded Differentiator Chapter 11 – Energize the Business Branded Energizer Sub-brand or brand that energizes and enhances a parent brand Energizers could be: Products Promotion Endorsers Any source of energy attached to the brand Chapter 11 – Energize the Business Branded Energizer Avon Breast Cancer Crusade – branded social programmes 17
