CHAPTER
2
CUSTOMER BASED BRAND
EQUITY
Customer Based Brand Equity
► Customer-based brand equity is formally defined as the differential
effect that brand knowledge has on consumer response to the
marketing of that brand.
CUSTOMER-BASED BRAND EQUITY
The basic premise of the CBBE model is that the
power of a brand lies in what customers have
learned, felt, seen and heard about the brand as a
result of their experiences over time.
CUSTOMER-BASED BRAND EQUITY:
Advantages of strong brands
•Improved perception
•Greater Loyalty
•Larger Margin
•Less vulnerability to competition
•Less vulnerability to marketing crisis
•Greater Trade Cooperation
CUSTOMER-BASED BRAND EQUITY:
Advantages of strong brands
•Increased promotional effectiveness
•Possible licensing/ franchising opportunity
•Additional brand extension opportunity
•More elastic consumer response to price decrease
•More inelastic consumer response to price increase
•Greater financial market return
SOURCES OF BRAND EQUITY
Establishing a high level of
Brand awareness Positive brand image
In
Consumers memory
Produces
The knowledge Different types of
structure that affect customer based brand
consumer response equity
SOURCES OF CBBE:BRAND KNOWLEDGE
Brand knowledge is the key to creating brand equity.
Therefore, marketers need to have an insightful way to
represent how brand knowledge exists in the consumer
memory.
brand knowledge can be characterized in terms of two
components:
1. brand awareness
2. brand image
BRAND KNOWLEDGE
1. Brand Awareness: Customer-based brand equity occurs
when the consumer has a high level of awareness and
familiarity with the brand and holds some strong, favorable
and unique brand associations in memory.
•Establishing brand awareness: Repeated exposure
•Brand awareness consists of brand recognition and
brand recall performance.
•--Brand Recognition
•--Brand Recall
BRAND KNOWLEDGE
----Brand Recognition: Brand recognition relates to the
consumers ability to confirm prior exposure to the brand when
given the brand as a cue.
--Brand Recall: Brand recall relates to 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.
For purchase decision made on store= B. Recognition is imp.
For purchase decision made outside= B. Recall is imp.
SOURCES OF CBBE:BRAND KNOWLEDGE
2. Brand Image:
Brand image can be expressed as the perception about a
brand as reflected by the brand associations held in
consumer memory. Brand associations are the other
information nodes linked to the brand node in memory and
contain the meaning of the brand for consumers.
Brand Image
A positive Brand image is created by marketing programs
that link strong, favorable and unique associations to the brand
in memory. And these associations are being created through
feeding message or information towards the customers.
Besides marketer controlled sources of information brand
associations can also be created in a variety of other ways:
- by direct experience
- from information communicated about brand from other
commercial or non-partisan sources- e.g. consumer reports,
word of mouth
- assumptions or inferences from brand and its elements
Possible Coca-Cola Association
BRAND
Refreshment Affordability
Fun Cool
Coca-Cola
Accessibility
Taste
Excitement Availability
Brand Association
Strength of Brand Associations
The source of information creating the strongest brand
attribute (descriptive features that characterize a product) and
brand benefit (personal value and meaning attached to product
attribute) is commonly known as direct experience. Other
sources are: WOM, Price, Quality etc.
Favorability of Brand Associations
Favorable associations for a brand are those associations
that are desirable to consumers and are successfully delivered
by the product.
Brand Association
Favorability of Brand Associations
Desirability depends on three factors:
1. How relevant consumers find the brand association
2. How distinctive consumers find the brand association
3. How believable consumers find the brand association
Deliverability also depends on three factors:
1. The actual or potential ability of the product to perform
2. The current or future prospects of communicating that
performance
3. The sustainability of the actual and communicated
performance over time.
CONTINUED…
Uniqueness of Brand Associations
In order to survive in the long run brand should have
sustainable competitive advantage or “USP” that gives
consumers a compelling reason why they should buy that
particular brand. The differences may be communicated
explicitly (direct comparison) or implicitly (no comparison,
focus on product or non-product related attributes).
To create the differential response that leads to CBBE, it is
important that some of the strongly held brand associations
are not only favorable but also unique. This uniqueness will
serve as POD and will give answer to the consumers “why to
buy this brand”?
BUILDING A STRONG BRAND:
Building a strong brand , according to the CBBE model, can be
thought of in terms of a sequence of steps, in which each step is
contingent on successfully achieving the previous step. The steps are:
1. Who are you ? (brand identity)
2. What are you ? (brand meaning)
3. What about you? What do I think and feel about you? (brand responses)
4. What about you and me ? (brand relationships)
we can find out a sequence like:
Proper Identity______ adequate meaning______ desired Response ________ desired relationship
Brand Building Blocks
Relationships
Resonance
Response
Judgments Feelings
Meaning
Performance Imagery
Salience Identity
CBBE Pyramid
Brand Building Blocks
Loyalty
Attachment
Community
Engagement
Quality Warmth, fun,
Credibility Excitement,
Consideration Security,
superiority Social approval
Self-respect
Primary characteristics and secondary features User profiles
Product reliability, durability & serviceability Purchase & usage situation
Service effectiveness, efficiency & empathy Personality & values
Style & design, Price History, heritage & experience
Category identification
Needs satisfied
Subdimensions of Brand Building Blocks
Brand Salience
Achieving the right brand identity involves creating brand
salience. Brand Salience relates to aspects of the awareness of
the brand.
Brand awareness means making sure that customers know
which of their needs the brand is designed to satisfy.
Breath & depth of brand awareness
Breath and depth of brand awareness is also a crucial
consideration.
depth= the ease with which a brand element comes to mind.
breath= the range of purchase or usage situation in which the
brand element comes to mind.
Brand Salience
Product category structure
To fully understand brand recall it is important to appreciate
product category structure. Typical product category consists
Product class information (ex: Money transfer)
Product category information (cash/banking/ non-banking transfer)
Product type information (Traditional banking/ mobile banking)
Brand information (bkash/ Nagad)
Brand Performance
Brand performance relates to the ways in which the product or
services attempts to meet customers more functional needs. It
refers to the intrinsic properties of the brand in terms of
inherent product or service characteristics.
Customer can view the performance of products or services in
a broad manner like
- reliability, durability, serviceability
- service effectiveness, efficiency & empathy
- aesthetic aspects like size, shape, color
- pricing policy for the brand
Brand Imagery
The other main type of brand meaning involves brand imagery.
Brand imagery deals with the extrinsic properties of the
product or service, including the ways in which the brand
attempts to meet customers psychological and social needs.
Imagery refers to more intangible aspects of the brand.
Imagery associations can formed:
- Directly (own experience, contact with product, brand,
target market or usage situations)
- Indirectly (depiction of these same consideration
communicated through Advertising, WOM).
Brand Judgments
Brand judgments focus on customers personal opinions and
evaluations ( rational judgement) about the brand. Customers
can make several types of judgments but in terms of creating a
strong brand four types of brand judgments are important &
these are
1.Brand quality: consumers attitude towards a brand is
determined by perceived quality & perception of value &
satisfaction.
2. Brand credibility: brand credibility refers to the extent to
which the brand is seen as credible in terms of :
• perceived expertise (competent, innovative, market leader)
• trustworthiness (dependable)
• likeability (fun, interesting & worth spending time with the brand
Brand Judgments
3. Brand consideration: consideration depends on the
extent to which customers view the brand as being appropriate
& meaningful to them. (e.g. “this is suitable for me”/ “ this is
not for me”)
4. Brand superiority: superiority is critical in terms of
building intense, active relationship & depends largely on the
number & nature of unique brand association that make up the
brand image. (e.g. “ this is better than other alternative
brands”)
Brand Feelings
Brand feelings are customers emotional response and reactions
with respect to the brand. (Which emotions are evoked by the
marketing program of the brand? )
The feelings can be mild/intense and can be positive/negative.
There are six important types of brand-building feelings:
a) Warmth (calm & peacefulness)
b) Fun (joyous, playful, cheerful) Experiential &
immediate.
c) Excitement (elation, being alive)
d) Security (safety, comfort)
e) Social approval ( status)
Private and enduring.
f) Self-respect (sense of pride)
Brand Resonance
Brand resonance refers to the ultimate Relationship and the extent to
which customers feel that they are “in sync” with the brand.
Resonance is characterized in terms of intensity, or the depth of
psychological bond as well as the level of activity stimulated by this
loyalty. Specifically, brand resonance can be broken down into four
categories:
a. Behavioral loyalty (how much & how often customers buy)
b. Personal attachment ( customers’ love)
c. Sense of community (kinship or affiliation with other people)
d. Active engagement ( e.g. time , energy, money or other
resources
The Harley Owners Group (HOG) is a
sponsored community marketing club,
operated by Harley-Davidson for
enthusiasts of that brand's motorcycles.
The HOG is "the grandaddy of all
community-building efforts," serving to
promote not just a consumer product, but a
lifestyle. The HOG has also served to open
new revenue streams for the company,
with the production of tie-in merchandise
offered to club members, numbering over
one million strong,
