Customer Based Brand Equity

ACCORDING TO KELLER

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Motivation forCustomer-Based Brand Equity ModelMarketers know strong brands are important

but aren’t always sure how to build one.CBBE model was designed to be …

comprehensive cohesive well-grounded up-to-dateactionable

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Rationale of Customer-Based Brand Equity ModelBasic premise: Power of a brand resides in

the minds of customersChallenge is to ensure customers have the

right types of experiences with products & services and their marketing programs to create the right brand knowledge structures:ThoughtsFeelingsImagesPerceptionsAttitudes

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Building Customer-Based Brand EquityBuilding a strong brand involves a series of

steps as part of a “branding ladder”A strong brand is also characterized by a

logically constructed set of brand “building blocks.”Identifies areas of strength and weaknessProvides guidance to marketing activities

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CUSTOMER-BASED BRAND EQUITY PYRAMID

RESONANCE

SALIENCE

JUDGMENTS FEELINGS

PERFORMANCE IMAGERY

4. RELATIONSHIPS =

What about you & me?

4. RELATIONSHIPS =

What about you & me?

3. RESPONSE =

What about you?

3. RESPONSE =

What about you?

2. MEANING =

What are you?

2. MEANING =

What are you?

1. IDENTITY =

Who are you?

1. IDENTITY =

Who are you?

Salience DimensionsDepth of brand awareness

Ease of recognition & recallStrength & clarity of category membership

Breadth of brand awarenessPurchase consideration(range of purchase)Consumption consideration(usage situations)

Product Category Structure needs to be appreciated(Ex:- Beverages)

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Performance Dimensions Relates to the way in which the product attempts

to meet customers’ more functional needs.

5 important types of attributes and benefits that underlie brand performance are:-

1.Primary characteristics & supplementary features

2.Product reliability, durability, and serviceability

3.Service effectiveness, efficiency, and empathy

4.Style and design

5.Price

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1. Primary Ingredients & Supplementary FeaturesEx: Bread-grain, yeast flavors, texture, nutrition

content(carb, protein, fibre etc) with few other distinguishing features

Ex:-Toaster Oven-housing of plastic & metal, an oven pan, power cord, clear glass door with optional features for safety, buzz when ready etc

Ex:- Portable CD Player-AM/FM stereo radio, one cassette deck, 2 speaker drives, ability to record, AC power cord, batteries. Features like clock, extra bass may be desired.

Hence , levels of ingredients differ based on customer beliefs

Brand Performance2.Product 3. Service Reliability-consistency of

performance over time & from purchase to purchase.

Durability-expected economic life

Serviceability-ease of service if it needs repair

Effectiveness-satisfying customers’ service requirements

Efficiency-speed & responsiveness in delivery

Empathy-trustworthy, caring & having customers’ interest in mind

Brand Performance(contd.)4. Style & Design- aesthetic considerations

such as size, shape, materials, and color involved & sensory aspects looks, feels, smells or sounds as well.

5. Price- Pricing Policy creates associations in consumer’ minds about relevant price tier or level for the brand. Categorizing the price of the brand, firmness/flexiblity in pricing(discounts) and product category knowledge are based on this aspect.

Brand Imagery Refers to intangible aspects of the brandDeals with extrinsic properties of the product

or service.Formed directly from a consumer’s own

experiences and contact with the product, brand, target market, or usage situation

Formed indirectly through the depiction of these same considerations, as communicated in advertising/WOM

Imagery Dimensions-4 Categories of IntangiblesUser profiles

Demographic & psychographic characteristicsActual or aspirationalGroup perceptions – popularity

Purchase & usage situationsType of channel, specific stores, ease of purchaseTime (day, week, month, year, etc.), location, and context of

usage

Personality & valuesSincerity, excitement, competence, sophistication, &

ruggedness

History, heritage, & experiencesNostalgiaMemories

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User ProfilesDemographic & Psychographic factors result in a profile by

customers of –actual users or more aspirational, idealized users

Demographic factors:- Gender-Marlboro Cigarettes(masculine) Eva Deo (Feminine) Age-Pepsi Cola(younger than Coke) Race Income

Psychographic factors:- (popularity) Attitudes towards life Careers Possessions Social Issues Political Institutions

Purchase & Usage Situations Situations/Conditions of PurchaseType of channel-sold through dept. stores, specialty stores,

internet etcSpecific stores-Shoppers Stop, ebay, etcEase of purchase & associated rewards-Home Delivery, Inner

Circle Card etc Usage SituationTime (day, week, month, year, etc.)Location (inside/outside home), and Type of activity/context of usage (formal/informal)

Examples-Snickers –”packed with peanuts”-satisfies as a healthy, filling snackBig Bazaar-”Wednesday shopping”-homemakers marketDomino’s -delivery

Brand PersonalitySincerity-down-to-earth, honest, wholesome, and cheerfulExcitement-daring, spirited, imaginative, and up-to-dateCompetence-reliable, intelligent, successfulSophistication-upper class and charmingRuggedness-outdoorsy and tough

For instance –

Allen Solley brand speaks the personality and makes the individual who wears it stand apart from the crowd.

Infosys represents uniqueness, value, and intellectualism.

Dove as honest, feminist and optimist;

Hewlett Packard brand represents accomplishment, competency and influence

History, heritage and experiences

Nostalgia-brands may take on associations to their past and certain noteworthy events in the brand history

Memories-distinctly personal experiences and episodes or be related to past behaviors and experiences of friends, family, or others.

For instance-there may be associations to aspects of the marketing program for the brand, the color of the product or look of its package, the company or person that makes the product and the country in which it is made, the type of store in which it is sold, the events for which the brand is a sponsor, and the people who endorse the brand.

Judgment DimensionsBrand quality

ValueSatisfaction

Brand credibilityExpertiseTrustworthinessLikability

Brand considerationRelevance

Brand superiorityDifferentiation

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Brand JudgementFocus on customers’ personal opinions and

evaluations w.r.t the brandPut together different performance and

imagery associations of the brand to form different kinds of opinions

Four Types- Quality, Credibility, Consideration, and Superiority

Brand JudgementBrand Quality Brand Credibility

Brand AttitudesPerceptions of value and

satisfaction

Ex:- Sheraton Hotels-certain associations that matter may be location convenience, room comfort, design, and appearance, service quality of staff, recreational facilities, food service, security, prices, and so on…

Refers to the extent to which the brand is seen as credible in terms of perceived expertise (competent, innovative, and a market leader), trustworthiness (dependable and keeping customer interests in mind), and likability (fun, interesting, and worth spending time with)

Brand JudgementBrand Consideration Brand SuperiorityHow appropriate,

relevant and meaningful the brand is to the customer

Is a crucial filter in building brand equity

Strong & favorable associations should be created

How the brand is viewed as unique and better than other brands

Helps build intense and active relationships with customers

Depends on the no. and nature of unique associations that make the brand image

Feelings DimensionsBrand Feelings – customers’ emotional

responses and reactions w.r.t the brandSix important types of brand-building feelings:1.Warmth-soothing2.Fun-upbeat3.Excitement-energized4.Security-safety5.Social approval-acknowledgement6.Self-respect-sense of prideThe first 3 types are experiential and immediate, increasing in

level of intensityThe latter 3 types of feelings are private and enduring,

increasing in level of gravity21

Resonance Dimensions Refers to the nature of the relationship and the extent to

which customers feel they are ‘in sync’ with the brand.Ex:- Harley-Davidson, Apple, and eBay –brands with high

resonanceCharacterized by-(Intensity of deep bonds with customer)

and (level of Activity generated by this loyalty)Brand Resonance categories:-

1. Behavioral loyalty

2. Attitudinal attachment

3. Sense of community

4. Active engagement

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Brand ResonanceBehavioral loyalty

Frequency and amount of repeat purchases

Attitudinal attachmentLove brand (favorite possessions; “a little pleasure”)Proud of brand

Sense of communityKinshipAffiliation

Active engagementSeek information Join clubVisit web site, chat rooms

Brand Resonance-ExamplesMTV-rebellious and irreverent manner

attracted the youthHarley-Davidson-sponsors HOG (free 1 year

membership, magazine, emergency road service etc)

True Apple customers in the U.S. have the brand's logo tattooed onto their bodies

In Finland, Nokia customers remained loyal to Nokia because they admired the design of the handsets or because of user- friendly menu system used by Nokia phones.

Customer-Based Brand Equity Model

Consumer-BrandResonance

Brand Salience

Consumer Judgments

Consumer Feelings

BrandPerformance

BrandImagery

INTENSE, ACTIVE LOYALTY

INTENSE, ACTIVE LOYALTY

RATIONAL & EMOTIONAL REACTIONS

RATIONAL & EMOTIONAL REACTIONS

POINTS-OF-PARITY &

POINTS-OF-DIFFERENCE

POINTS-OF-PARITY &

POINTS-OF-DIFFERENCE

DEEP, BROAD BRAND

AWARENESS

DEEP, BROAD BRAND

AWARENESS

Sub-Dimensions of CBBE Pyramid

LOYALTYATTACHMENTCOMMUNITYENGAGEMENT

QUALITY CREDIBILITYCONSIDERATIONSUPERIORITY

WARMTHFUNEXCITEMENTSECURITYSOCIAL APPROVALSELF-RESPECT

CATEGORY IDENTIFICATIONNEEDS SATISFIED

PRIMARY CHARACTERISTICS &SECONDARY FEATURES

PRODUCT RELIABILITY, DURABILITY & SERVICEABILITY

SERVICE EFFECTIVENESS, EFFICIENCY, & EMPATHY

STYLE AND DESIGN PRICE

USER PROFILESPURCHASE & USAGE

SITUATIONSPERSONALITY &

VALUESHISTORY, HERITAGE, & EXPERIENCES