Lectures "Marketing management - Chapter 9: Creating brand equity" provides students with the knowledge: What is brand equity, building brand equity, measuring brand equity, managing brand equity, devising a branding strategy, customer equity. Invite you to refer to the disclosures.
CHAPTER CREATING BRAND EQUITY Nguyen Tien Dung, MBA Email: dung.nguyentien3@hust.edu.vn Chapter Questions What is a brand, and how does branding work? What is brand equity? How is brand equity built, measured, and managed? What are the important brand architecture decisions in developing a branding strategy? © Nguyễn Tiến Dũng Main Contents What Is Brand Equity? Building Brand Equity Measuring Brand Equity Managing Brand Equity Devising a Branding Strategy Customer Equity © Nguyễn Tiến Dũng What Is Brand Equity? ● The Role of Brands ● The Scope of Branding ● Defining Brand Equity ● Brand Equity Models © Nguyễn Tiến Dũng The Role of Brands ● Show the source or maker of a product and allow customers to assign responsibility for its performance to a particular manufacturer or distributor ● Perform valuable functions for firms ● Simplify product handling or tracing ● Help to organize inventory and accounting records ● Get the protection from the government for unique features or aspects of the product: registered trademarks, patents, packaging can be protected through copyrights and proprietary designs ● Signals a certain level of quality © Nguyễn Tiến Dũng The Scope of Branding ● A physical good ● A service ● A store ● A person ● A place ● An organization (U2 or American Automobile Association) ● An idea (abortion rights or free trade) © Nguyễn Tiến Dũng Defining Brand Equity ● The added value endowed on products and services ● It may be reflected in the way consumers think, feel, and act with respect to the brand, as well as in the prices, market share, and profitability the brand commands ● Customer-based brand equity is the differential effect brand knowledge has on consumer response to the marketing of that brand ● It could be positive or negative © Nguyễn Tiến Dũng Brand Equity Models ● BrandAsset® Valuator ● BrandZ ● Brand Resonance Model ● InterBrand © Nguyễn Tiến Dũng BrandAsset Valuator © Nguyễn Tiến Dũng © Nguyễn Tiến Dũng 10 Brand Value Chain © Nguyễn Tiến Dũng 18 InterBrand Valuation Method © Nguyễn Tiến Dũng 19 Approaches to measure BE ● A brand audit is a consumer-focused series of procedures to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity ● Conducting brand audits on a regular basis, such as annually, allows marketers to keep their fingers on the pulse of their brands so they can manage them more proactively and responsively ● Brand-tracking studies collect quantitative data from consumers over time to provide consistent, baseline information about how brands and marketing programs are performing ● Tracking studies help us understand where, how much, and in what ways brand value is being created, to facilitate day-to-day decision making © Nguyễn Tiến Dũng 20 Managing Brand Equity ● Brand Reinforcement ● Brand Revitalization © Nguyễn Tiến Dũng 21 Devising a Branding Strategy ● Branding Decisions ● Brand Portfolios ● Brand Extensions © Nguyễn Tiến Dũng 22 Customer Equity ● Customer lifetime value is affected by revenue and by the costs of customer acquisition, retention, and cross-selling ● Acquisition depends on the number of prospects, the acquisition probability of a prospect, and acquisition spending per prospect ● Retention is influenced by the retention rate and retention spending level ● Add-on spending is a function of the efficiency of add-on selling, the number of add-on selling offers given to existing customers, and the response rate to new offers © Nguyễn Tiến Dũng 23 P&G’s brands © Nguyễn Tiến Dũng 24 Positioning Act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market © Nguyễn Tiến Dũng 25 Value Propositions ● Perdue Chicken ● More tender golden chicken at a moderate premium price ● Domino’s ● A good hot pizza, delivered to your door within 30 minutes of ordering, at a moderate price © Nguyễn Tiến Dũng 26 Defining Associations Points-of-difference (PODs) ● Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand ● FedEx—guaranteed overnight delivery ● Nike—performance ● Lexus—quality ● Miller Lite Beer—one-third less calories © Nguyễn Tiến Dũng Points-of-parity (POPs) ● Associations that are not necessarily unique to the brand but may be shared with other brands ● Category—travel agency must be able to make air and hotel reservations, etc ● Competitive—Miller Lite beer—taste great 27 Conveying Category Membership ● Announcing category benefits able to deliver on the fundamentals reason for using a category ● Comparing to exemplars used category membership parity ● Relying on the product descriptor-communicate unique position © Nguyễn Tiến Dũng 28 Consumer Desirability Criteria for PODs ● Relevance-personally relevant and important ● Distinctiveness superior (Splenda overtook Equal and Sweet ‘n Low) ● Believability credible © Nguyễn Tiến Dũng 29 Deliverability Criteria for PODs ● Feasibility—must be able to create ● Communicability—consumers must be able to understand benefits ● Sustainability—preemptive and defensible positioning © Nguyễn Tiến Dũng 30 Examples of Negatively Correlated Attributes and Benefits ● Low-price vs High ● Powerful vs Safe quality ● Taste vs Low calories ● Nutritious vs Good tasting ● Strong vs © Nguyễn Tiến Dũng Refined ● Ubiquitous vs Exclusive ● Varied vs Simple 31 Addressing negatively correlated PODs and POPs ● Present separately ● Leverage equity of another entity ● Redefine the relationship ... © Nguyễn Tiến Dũng 16 Measuring Brand Equity ● Brand Value Chain ● Approaches to measure BE © Nguyễn Tiến Dũng 17 Brand Value Chain © Nguyễn Tiến Dũng 18 InterBrand Valuation Method © Nguyễn Tiến. .. brands © Nguyễn Tiến Dũng 11 BrandDynamics Pyramid © Nguyễn Tiến Dũng 12 Brand Resonance Pyramid © Nguyễn Tiến Dũng 13 Building Brand Equity ● Choosing Brand Elements ● Designing Holistic Marketing. .. BrandAsset® Valuator ● BrandZ ● Brand Resonance Model ● InterBrand © Nguyễn Tiến Dũng BrandAsset Valuator © Nguyễn Tiến Dũng © Nguyễn Tiến Dũng 10 BrandZ ● Presence Active familiarity based on past trial,