Samenvatting Strategic Brand Management (Keller) part 1

First 8 chapters of the summary 'Strategic Brand Management (Keller)' , written in 2013-2014.

Chapter A. Brands and brand management

In our increasingly complex world everyone faces more choices to make but has less time to make them. Therefore a brand’s ability to simplify decision making, reduce risk, and set expectations is invaluable.

What is a brand?

Brand (American Marketing Association definition) = a 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. Whenever a marketer creates a new name, logo, or symbol for a new product, a new brand has been created.

A brand can also be considered something that has created a certain amount of awareness, reputation, prominence, and so on in the marketplace. This is the industry concept of a brand, called ‘Brand with a big B’, while the AMA definition is the definition with a small b. The key to creating a brand is being able to choose the right brand elements (name, logo, etc.).

Product = anything we can offer to a market for attention, acquisition, use, or consumption that might satisfy a need or want. It may be a physical good, a service, a type of store, a person, an organization, a place, or even an idea. Five levels of meaning for a product are defined:

1. Core benefit level = the fundamental need or want that consumers satisfy by consuming the product or service;

2. Generic product level = a basic version of the product containing only those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features (stripped-down, no frills version);

3. Expected product level = a set of attributes/characteristics that buyers normally expect and agree to when they purchase a product;

4. Augmented product level = includes additional attributes/benefits/services that distinguish the product from those of competitors;

5. Potential product level = includes all the augmentations and transformations that a product might ultimately undergo in the future.

In many markets most competition takes place at the augmented product level. At that level, firms can successfully build satisfactory products at the expected product level. Levitt argued that the new competition is not between what companies produce, but between what they add to their factory output in the form of packaging, services, advertising, customer advice, and other things that people value. Therefore a brand is more than a product, because it can have dimensions that differentiate it from other products that satisfy the same need.

Some brands create competitive advantages with product performance by steadily investing in R&D and mass marketing. Other brands create competitive advantages through non-product related means, e.g. by creating appealing images surrounding their products. Especially strong brands carry various different types of associations, which marketers have to account for when making marketing decisions. There are many different ways to create such associations. By creating perceived differences among products through branding and by developing a loyal consumer franchise, marketers create value that can translate to financial products for the firm. Most valuable are intangible assets such as management skills, marketing, financial and operations expertise and of course the brand itself.

Why do brands matter?

Consumer = all types of customers, including individual citizens as well as organizations. To consumers, brands identify the source/maker of a product, thereby allowing them to assign responsibility to a particular manufacturer/distributor. Based on past experiences and marketing programs, consumers find out which brand satisfies them. They use this information to simplify their product decisions because when they already know a brand and like it, they do not necessarily have to consider all other brands available for purchase. This way, the consumer’s search costs for products both internally (how much he has to think) and externally (how much he has to look around) are lowered. Consumers trust a brand and become loyal to it with the implicit understanding that the brand will behave in certain ways and provide them utility through consistent product performance and appropriate pricing, promotion, and distribution programs and actions. As long as consumers are satisfied with a product, they are likely to continue to buy it.

Brands can allow consumers to project their self-image (serve as symbolic devices) and allow consumers to communicate to others the type of person they are by reflecting different values or traits. Brands and their attributes can be classified into three categories:

• Search goods = consumers can evaluate product attributes like color, size, style, design, and weight by visual inspection (e.g. groceries);

• Experience goods = consumers cannot assess product attributes like durability, ease of handling, and safety easily by inspection, so have to try/experience the product (e.g. car tires);

• Credence goods = consumers may rarely learn product attributes (e.g. insurance coverage).

Brands can be indicators of quality and other characteristics, and can reduce risks in product decisions. Types of risk are:

• Functional risk = the product does not perform up to expectations;

• Physical risk = the product poses a threat to the physical well-being of the user/others;

• Financial risk = the product is not worth its price;

• Social risk = the product results in embarrassment from others;

• Psychological risk = the product affects the mental well-being of the user;

• Time risk = the failure of the product results in an opportunity cost of finding another satisfactory product.

One way for consumers to handle these risks is to buy well-known brands with which they have had favorable experiences. The special meaning that brands take on can change consumers’ perceptions and experiences with a product. They may evaluate identical products differently because of the brands they carry. Brands take on personal meanings to consumers and as their lives become more complicated, they use brands in order to simplify their decision making and to reduce risk.

To firms, brands fundamentally serve an identification purpose (to simplify product handling/tracing). Operationally, they help organize inventory and accounting records. A brand also offers the firm legal protection for unique features of the product and can retain intellectual property rights, ensuring that the firm can safely invest in a brand and reap the benefits of a valuable asset. The brand name can be protected through trademarks, manufacturing processes through patents, and packaging through copyrights. Consumers’ brand loyalty provides predictability and security of demand and creates barriers of entry, because lasting impressions in the minds of individuals cannot be easily duplicated by competitors.

Can anything be branded?

Ultimately a brand is something that resides in the minds of consumers: it reflects their perceptions. Marketers must give consumers a label for the product (how you can identify it) and provide meaning for the brand (what it can do for you, and why it is special and different). The key to branding is that consumers perceive differences (related to attributes, the product/service itself, or intangible assets) among brands in a product category. Marketers can benefit from branding whenever consumers have to make a choice.

Business-to-business branding creates a positive image for the company as a whole. Goodwill with business customers is thought to lead to greater selling opportunities and more profitable relationships. A strong brand can provide valuable reassurance and clarity to business customers who may be putting their company’s fate/their own careers on the line. A strong B2B brand can thus provide a strong competitive advantage.

High-tech firms often lack any kind of brand strategy and sometimes see branding as simply naming their products. However, marketing skills, besides product innovation, play an increasingly important role in the adoption and success of high-tech products.

A challenge in marketing services is that they are intangible and more likely to vary in quality than products, depending on the particular people providing them. Brands can help identify and provide meaning to the different services provided by a firm.

Branding can effectively signal to consumers that the firm has designed a particular service offering that is special and deserving of its name. Professional service branding is a combination of B2B branding and traditional service branding. Corporate credibility is key and variability is more of an issue because it is harder to standardize the services of a consulting firm than those of a typical consumer services firm. In professional services individual employees have a lot more of their own equity in the firm and are often brands in their own right. They need to ensure that their words and actions help to build the corporate brand, and not their own because when they leave the company, they will then take their equity with them. Referrals, testimonials, emotions and switching costs can have a lot of influence when branding services.

To retailers and distributors, brands can generate consumer interest, patronage, and loyalty in a store. Retailers can create their own brand image by attaching unique associations to the quality of their service, their assortment, and their pricing policy. The more appealing the brands they offer, the higher the possible price margins, sales volumes, and profits. Store brands/private label brands = retailers/distributors creating their own brands by using their store name, to increase customer loyalty and generate higher margins and profits.

Online marketers must also create unique aspects of the brand on a dimension that is important to consumers. At the same time, the brand needs to perform satisfactorily in other areas such as customer service. By offering unique features and services to consumers, the best online brands are able to rely on word-of-mouth and publicity while avoiding extensive advertising. Online brands also need to focus on offline activities to draw consumers to their websites.

People and organizations often have well-defined images that are easily understood and (dis)liked by others. They compete in some sense for public approval and acceptance, benefiting from conveying a strong and desirable image. By building up a name and reputation in a business context, you are creating your own brand as a person.

Sports teams engage in marketing to meet ticket sales regardless of their performance and to get sponsors. In the arts and entertainment industries marketing is used to generate positive word-of-mouth and to make consumers expect a certain experience. Places like cities or countries are marketed with the aim to create awareness and a favorable image of the location that will encourage temporary visits from tourists or permanent moves from individuals and businesses. Many nonprofit organizations brand ideas and causes to inform or persuade consumers about the issues surrounding such ideas/causes.

What are the strongest brands?

Virtually anything can be and has been branded. However, any brand, no matter how strong, is vulnerable and susceptible to poor management. Factors determining enduring leadership are:

• Vision of the mass market: companies with a keen eye for mass market tastes are more likely to build a broad and sustainable customer base;

• Managerial persistence: the ‘breakthrough’ technology that can drive market leadership often requires the commitment of company resources of long periods of time;

• Financial commitment: costs are high because of the demands for R&D and marketing;

• Relentless innovation: consumer tastes change and competitors develop, so you must keep innovating to stay ahead;

• Asset leverage: companies can become leaders in some categories if they hold a leadership position in a related category.

Branding challenges and opportunities

Some recent developments that have complicated marketing practices and pose challenges:

Consumers and businesses have become more experienced with marketing, more knowledgeable about how it works, and more demanding. In today’s marketing environment, there is a vast number of information sources available to consumers.

Economic downturns: consumers buy lower-priced brands instead of higher-priced products.

Many marketers have added a host of new products under their umbrella brand. By the proliferation of new brands and products, there are few single product brands around, complicating the decisions that marketers have to make.

Traditional advertising media has been fragmented and nontraditional media have emerged. Marketers are now spending more on the latter.

The marketplace has become more competitive: on the demand side, consumption for many products has hit the maturity stage, leading to a situation wherein marketers can only achieve sales growth by taking away competitors’ market share. On the supply side, new competitors have emerged due to globalization, low-priced competitors (store brands and imitators of product leaders), brand extensions, and deregulation.

The cost of new product introduction or supporting an existing product has increased rapidly.

Marketers are responsible for meeting short-term profit targets because of market pressures and senior management imperatives. On the other hand, stock analysts value the long-term financial health of a firm. Therefore marketing managers find themselves in the dilemma of having to make decisions with short-term benefits but long-term costs. Also, they cannot really make a difference because the average job turnover is rapid.

The brand equity concept

Brand equity = the marketing effects uniquely attributable to a brand. It explains why different outcomes result from the marketing of a branded product or service than if it were not branded. Basic principles of branding and brand equity:

Differences in outcomes arise from the ‘added value’ endowed to a product as a result of past marketing activity for the brand. This value can be created for a brand in many different ways. Brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a brand. There are many different ways in which this value can be manifested or exploited to benefit the firm. Fundamentally, the brand equity concept reinforces how important the brand is in marketing strategies.

Strategic brand management process

Strategic brand management = the design and implementation of marketing programs and activities to build, measure, and manage brand equity. The process has four steps:

1. Identifying and developing brand plans;

2. Designing and implementing brand marketing programs;

3. Measuring and interpreting brand performance;

4. Growing and sustaining brand equity.

Identifying and developing brand plans

What is the brand to represent and how should it be positioned? Use three models:

Brand positioning model = describes how to guide integrated marketing to maximize competitive advantages;

Brand resonance model = describes how to create intense, active loyalty relationships with customers;

Brand value chain = a means to trace the value creation process for brands, to better understand the financial impact of brand marketing expenditures and investments.

Designing and implementing brand marketing programs

Building brand equity requires properly positioning the brand in the minds of customers and achieving as much brand resonance as possible. This knowledge-building process depends on:

The initial choices of the brand elements making up the brand and how they are mixed and matched: what would consumers think about the product/service if they knew only the brand name/logo/other element?;

The marketing activities and supporting marketing programs and the way the brand is integrated into them;

Other associations indirectly transferred or leveraged by the brand as a result of linking it to some other entity: because the brand becomes identified with another entity, consumers may infer that the brand shares associations with that entity, thus producing indirect associations for the brand.

Measuring and interpreting brand performance

Brand equity measurement system = a set of research procedures designed to provide timely, accurate, and actionable information for marketers so that they can make the best possible tactical decisions in the short run and the best strategic decisions in the long run. Key steps:

Conducting a brand audit = a comprehensive examination of a brand to assess its health, uncover its sources of equity, and suggest ways to improve and leverage its equity;

Designing brand tracking studies = information collection from consumers on a routine basis over time;

Establishing a brand equity management system = a set of organizational processes designed to improve the understanding and use of the brand equity concept within a firm. Steps: creating brand equity charters, assembling brand equity reports, and defining brand equity responsibilities.

Growing and sustaining brand equity

Brand equity management activities take a broader/more diverse perspective of the brand’s equity:

Defining brand architecture = general guidelines about the branding strategy and which brand elements to apply. Key concepts are brand portfolio = the set of different brands that a particular firm offers for sale to buyers in a particular category, and brand hierarchy = displays the number and nature of common and distinctive brand components across the firm’s set of brands.

Managing equity over time: a long-term perspective recognizes that any changes in the marketing program may affect the success of future programs. It also produces proactive strategies designed to maintain and enhance customer-based brand equity over time and reactive strategies to revitalize a brand that encounters problems.

Managing brand equity over geographic boundaries, cultures, and market segments: in expanding a brand overseas, managers need to build equity by relying on specific knowledge about the experience and behaviors of those segments.

Chapter B. Customer-based brand equity and brand positioning

Three interconnected models are helpful when planning the development of brands:

• Brand positioning model = describes how to establish competitive advantages in the minds of customers in the marketplace;

• Brand resonance model = describes how to take these competitive advantages and create intense, active loyalty relationships with customers for brands;

• Brand value chain model = describes how to trace the value creation process to better understand the financial impact of marketing expenditures and investments to create loyal customers and strong brands.

Positioning = defining the ideal brand knowledge structures and establishing points-of-parity (POPs: no reason why consumers should not buy the brand) and points-of-difference (PODs: reason why consumers should buy the brand) in consumers’ minds to establish the right brand identity and brand image.

Customer-based brand equity

The CBBE concept = approaches brand equity from the perspective of the consumer (individual/organization and existing/prospective). Marketers have to understand the needs and wants of consumers and organizations: what do different brands mean to them, and how does their brand knowledge affect their response to marketing activities? According to the CBBE concept, the power of a brand lies in what resides in the minds and hearts of customers.

Customer-based brand equity = the differential effect that brand knowledge has on consumer response to the marketing of the brand. It is positive when consumers react more favorably to a product and the way it is marketed than when it is not branded.

Brand equity arises from differences in consumer response (differential effect). These differences are a result of consumers’ brand knowledge. Consumers’ responses to marketing make up brand equity and are reflected in perceptions, preferences, and behavior related to all aspects of brand marketing. Consumers’ perceptions of product performance are highly dependent on their impressions of the brand that goes along with it. Thus, consumer knowledge drives the differences that manifest themselves in terms of brand equity.

Money spent on marketing should be considered investments instead of expenses. The quality of these investments is more important than the quantity. The brand knowledge that marketers create over time dictates (in)appropriate future directions for the brand. Consumers will decide where they think the brand should go.

Making a brand strong: brand knowledge

According to the CBBE concept, brand knowledge is the key to creating brand equity because it creates the differential effect that drives it. The associative network memory model views memory as a network of nodes and connecting links, in which nodes represent stored information or concepts, and links represent the strength of association between the nodes. Any type of information can be stored in the memory network.

Brand knowledge has two components: brand awareness = related to the strength of the brand node/trace in memory, which can be measured as the consumer’s ability to identify the brand under different conditions. Brand image = consumers’ perceptions about a brand, as reflected by the brand associations (other informational nodes linked to the brand node in memory, containing the meaning of the brand for consumers, e.g. ‘safety’ or ‘quality’) held in consumer memory.

Sources of brand equity

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. In low-involvement decisions brand awareness alone may be enough to create favorable consumer response. In most other cases, the strength, favorability, and uniqueness of brand associations play a critical role in determining the differential response that makes up brand equity. If consumers perceive the brand as only representative of the product/service category, they’ll respond as if the offering were unbranded. Therefore marketers must convince them that there are meaningful differences between brands.

Brand awareness consists of:

• Brand recognition = consumers’ ability to confirm prior exposure to the brand when given the brand as a cue  important when decision is made at point of purchase;

• Brand recall = consumers’ ability to retrieve the brand from memory when given the product category, the needs fulfilled by the category, or a purchase/usage situation as a cue  important if decisions are made in setting away from the point of purchase.

Advantages of creating a high level of brand awareness are:

• Consideration advantage: brand awareness influences the formation and strength of the brand associations that make up the brand image. To create that image, a brand node in memory has to be established; the brand has to be registered in consumers’ minds. If the right brand elements are chosen, the task becomes easier.

• Consideration advantage: raising brand awareness increases the likelihood that the brand will be in the consideration set of the consumer and decreases the chance that other brands will be considered/recalled.

• Choice advantage: brand awareness can affect choices among brands in the consideration set, even if there are essentially no other associations to those brands.

The elaboration-likelihood model = consumers may make choices based on brand awareness considerations when they have low involvement. This results when consumers lack either purchase motivation (they don’t care about the product/service, e.g. different gasoline brands), or purchase ability (they don’t know anything else about the brands in a category, e.g. high-tech products).

Creating brand awareness means increasing the familiarity of the brand through repeated exposure (more effective for recognition than for recall). Anything that causes consumers to experience one or more brand elements like its name and logo, can increase the brand awareness. Repetition increases recognizability, but improving brand recall also requires linkages in memory to the right product categories or other cues. Strong links between the brand and cues may become especially important over time if the product meaning of the brand changes through extensions, mergers, or acquisitions.

Once a sufficient level of brand awareness is created, marketers can put more emphasis on crafting a brand image. Creating a positive brand image takes marketing programs that link strong, favorable, and unique associations to the brand in memory. Such associations may be either brand attributes = descriptive features that characterize a product/service, or brand benefits = personal value and meaning that consumers attach to the attributes.

CCBE does not distinguish between the source of brand associations: all that matters is their strength, favorability, and uniqueness. Consumers can form associations with a brand not only through the brand’s marketing, but also through other sources like direct experiences, and word-of-mouth. Associations need to be unique, because then they help consumers choose between brands.

Some factors that in general affect the strength, favorability, and uniqueness of brand associations:

Factors that strengthen association to information are the personal relevance and the consistence with which it is presented over time. Direct experiences create the strongest brand attributes. Word-of-mouth is especially important for service organizations. Company-influenced sources of information (e.g. advertising) create the weakest associations.

Favorable brand associations are created by convincing consumers that the brand possesses relevant attributes and benefits for them. Some associations may be more important to consumers than others, and they may be situation- or context-dependent and vary according to what consumers want to achieve in their decision.

Marketers can make the unique differences of their brand explicit through direct comparisons with competitors or by implicitly highlighting them. These differences may be performance- or non-performance related.

Shared associations with competitors can be used to establish category membership and to define the scope of the brand. The strength of the brand associations to the product category is an important determinant of brand awareness.

Identifying and establishing brand positioning

Brand positioning = the act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s minds. It means finding the proper ‘location’ in the minds of a group of consumers, so that they think about the product in the desired way to maximize potential benefit to the firm. Marketers need to know who the target consumer is, who the main competitors are, how the brand is similar to these competitors, and how the brand is different from them.

Market = the set of all actual and potential buyers who have sufficient interest in, income for, and access to a product. Market segmentation divides the market into distinct groups of homogeneous consumers with similar interests and similar behavior, and who therefore require similar marketing mixes.

Segmentation bases can be descriptive/customer-oriented (what kind of person is the customer?) or behavioral/product-oriented (how does the customer think of/use the product?). The latter is most often most valuable in understanding branding issues because they have clearer strategic implications.

Funnel model = traces consumer behavior through several stages: aware  ever tried  recent trial  occasional use  regular use  most often use. Marketers want to understand the percentage of the target market that is present at each stage and the factors influencing the transition from one stage to the next.

Criteria to guide segmentation and target market decisions:

• Can we easily identify the segment?

• Is there adequate sales potential (size) in the segment?

• Are specialized distribution outlets and communication media available to access the segment?

• How favorably will the segment respond to a tailored marketing program?

When a company decides to target a certain segment, it implicitly defines the nature of competition because the companies targeting the same segment will become direct competitors. However, because competition occurs often at the benefit level instead of the attribute level, two completely different products can still be (indirect) competitors, because they for example both satisfy a hedonic need.

Brands can identify more than one frame of reference, e.g. Canon cameras competing with Nikon cameras, but also with those on mobile phones. Ideally, Canon should develop a robust positioning that would be effective across both frames. If that is not effective, Canon has to prioritize and choose the most relevant set of competitors to serve as the frame of reference. Lowest common denominator positioning = ineffective positioning because then you try to be all things to all people.

Once the frame of reference is defined, the basis of the positioning itself can be defined. Points-of-difference (PODs) = attributes/benefits that consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competing brand. PODs may rely on functional attributes (the perceived uniqueness of brand associations), performance attributes/benefits, or come from imagery associations (e.g. the luxury status of Louis Vuitton). Consumer benefits often have important underlying proof points/reasons to believe (RBTs) like key attributes, ingredients, or endorsements.

Points-of-parity associations (POPs) are not necessarily unique to the brand but may be shared with other brands. Types:

• Category points-of-parity = necessary conditions for brand choice; are most likely to exist at the expected product level (e.g. a bank is only considered a bank if it offers the services that are expected to be offered by a bank).

• Competitive points-of-parity = associations designed to negate competitors’ points-of-difference. In order to have a strong competitive position, a brand must excel in some areas and be sufficient in others.

• Correlational points-of-parity = potentially negative associations that arise from the existence of other, more positive associations for the brand. If your brand is good at one thing, it probably isn’t at another. Also some attributes have both positive and negative aspects.

POPs are important because they can undermine PODs: unless certain POPs can be achieved to overcome potential weaknesses, PODs may not even matter. Consumers must feel that a brand does sufficiently well on a particular attribute in order not to consider it as a problem. If so, they base their evaluations/decisions on the (other) factors that the brand is good at.

Positioning guidelines

Two key issues arriving at the optimal competitive brand positioning are defining and communicating the competitive frame of reference and choosing and establishing points-of-parity and points-of-difference.

When defining a competitive frame of reference for a brand positioning you start by determining category membership. Find out with which products the brand competes. The category membership of a product tells consumers about the goals they might achieve by using that product. The most obvious scenario in which it is important to inform customers about the brand’s category membership is when introducing new products. Reinforcement of category membership may be important when consumers are aware of the product, but are not certain whether the product is of the same quality (in the same ‘class’) as other brands in the category.

Preferably consumers have to be informed of a brand’s membership before stating its PODs. They need to know what a product is and what it’s use is before they can decide whether it dominates the brands against which it competes.

There are three main ways to convey a brand’s category membership:

• Communicating category benefits: to reassure consumers that a brand will deliver on the fundamental reason for using a category, marketers frequently use benefits to announce category membership. These are presented in a way that notes that the brand possesses them as a mean to establish category POPs.

• Exemplars: well-known brands in a category can be used as exemplars to specify a brand’s category membership, e.g. associating a new designer with a brand like Calvin Klein.

• Product descriptor: giving away the category origin in the name, e.g. US Airways.

After the competitive frame of reference has been communicated and the POPs are made clear, PODs can be developed. In order for a brand to be perceived as different, the brand association must be seen as desirable from the consumer’s point of view, as deliverable on a company’s inherent capabilities, and as differentiating relative to the competitors. A brand association has sufficient strength if consumers see the attribute as highly important, feel confident that the firm has the capabilities to deliver it, and are convinced that no other brand can offer it to the same extent.

Desirability criteria: target consumers must find the POD personally relevant and important. The differences must matter to them.

Deliverability criteria: depends on a company’s actual ability to make the product (feasibility) and their effectiveness in convincing customers of this ability (communicability).

Differentiation criteria: target customers must find the POD distinctive and superior.

The key to branding success is to establish both POPs and PODs. One of the challenges in positioning is the inverse relationship that may exist in the minds of consumers. Several approaches to address the problem of negatively correlated POPs and PODs in increasing order of effectiveness and difficulty are:

• Separate the attributes: launch two different marketing campaigns, each devoted to a different brand attribute/benefit. This way the negative correlation may be less apparent because the attributes are marketed separately. However, developing two strong campaigns is costly and if the marketer does not address the negative correlation head-on, consumers may not develop as positive an association as desired.

• Leverage equity of another entity: brands can be linked to any kind of entity (a person, other brand, event, etc.) that possesses the right kind of equity.

• Redefine the relationship: convince consumers that the relationship is, in fact, positive by providing them with a different perspective.

Sometimes a company will be able to straddle two frames of reference with one set of PODs and POPs. The PODs in one category then become the POPs in another and vice versa. This is attractive because it can reconcile potentially conflicting consumer goals and create a ‘best-of-both-worlds solution’. However, if the PODs and POPs are not credible, consumers may not view the brand as a legitimate player in either category.

As a general rule, the positioning of an established brand should be fundamentally changed very infrequently and only when circumstances significantly reduce the effectiveness of existing POPs and PODs.

Laddering = the need to deepen the meaning of the brand to permit further expansion. Once the target market attains a basic understanding of how the brand relates to alternatives in the same category, laddering may occur.

According to Maslow, higher-level needs become relevant once lower-level needs have been satisfied:

Means-end chains = a consumer chooses a product that delivers an attribute that provides benefits or has certain consequences that satisfy values.

Laddering thus progresses from attributes to benefits to more abstract values or motivations. As a product becomes associated with more and more products and moves up the product hierarchy, its meaning will become more abstract.

Another opportunity for changing the positioning is reacting to competitive actions. Often competitive advantages exist for only a short time, until competitors imitate them. When a competitor challenges an existing POD or attempts to overcome a POP, there are three options: do nothing, go on the defensive (e.g. by adding some reassurance in the product to strengthen POPs and PODs), or go on the offensive (reposition the brand to address the threat, e.g. by launching a product extension or ad campaign that fundamentally changes the meaning of the brand). A good positioning….

• Has a ‘foot in the present’ and a ‘foot in the future’. It needs to give room to the brand to grow and improve.

• Is careful to identify all relevant POPs: beware to not overlook important POPs and uncover them e.g. by role playing and by doing consumer research.

• Should reflect a consumer point of view in terms of the benefits that consumers derive from the brand. Make clear why the product is attractive.

• Has both rational and emotional components.

Defining a brand mantra

As brands evolve and expand across categories, marketers will want to craft a brand mantra that reflects the essential heart and soul of the brand. A brand mantra/brand essence/core brand promise = a short, 3-5 word phrase that captures the essence of the brand positioning. Brand mantras can provide guidance about that product to introduce under the brand, what ad campaigns to run, and where and how the brand should be sold. They create a mental filter to screen out brand-inappropriate marketing activities/actions of any type that may have a negative bearing on customers’ impressions of a brand. The brand mantra signals its meaning and importance to the firm, as well as the crucial role of employees and marketing partners in its management. It provides memorable shorthand as to what are the crucial considerations of the brand that should be kept most salient and top-of-mind too.

Brand mantras must economically communicate what the brand is and what it is not. A good example is Nike: authentic (emotional modifier), athletic (descriptive modifier), performance (brand function).

The brand function describes the nature of the product or the type of benefits it provides. The descriptive modifier further clarifies the nature. The emotional modifier provides how the brand exactly provides benefits and in what ways.

Brand mantras derive their power and usefulness from their collective meaning. No other brand should singularly excel on all dimensions. They are typically designed to capture the brand’s PODs. POPs may also be important. For brands facing rapid growth, a brand functions term can provide critical guidance as to (in)appropriate categories into which to extend. For more stable brands, the mantra may focus more on the PODs.

Brand mantras may benefit from the learning gained from the brand audit and other activities used for deciding on the brand’s positioning. However, the mantra requires more internal examination. The different means by which each and every employee currently affects brand equity, and how he or she can contribute in a positive way to a brand’s destiny have to be determined. Considerations that should come into play in the final mantra:

• Communicate: the mantra should define the category and clarify what is unique about the brand;

• Simplify: it should be memorable, short, crisp, and vivid;

• Inspire: it should stake out ground that is personally meaningful and relevant to as many employees as possible.

There will always be a level of meaning beneath the brand mantra itself that will need to be articulated.

Chapter C. Brand resonance and the brand value chain

Brand resonance model = describes how to create intense, active loyalty relationships with customers. It considers how brand positioning affects what consumers think, feel, and do and the degree to which they connect (resonate) with a brand.

Brand value chain = a means by which marketers can trace the value creation process for their brands to better understand the financial impact of their marketing expenditures and investments. Partly based on the customer-based brand equity (CBBE) concept, it offers a holistic, integrated approach to understanding how brands create value.

Building a strong brand: the four steps of brand building

The brand resonance model looks at building a brand in steps with a branding ladder, each of which is contingent on successfully achieving the objectives of the previous one. They are related to questions that consumers ask about brands:

1. Ensure identification of the brand with customers and an association of the brand in customers’ minds with a specific product class, product benefit, or customer need  Who are you? Brand identity/salience: deep, broad brand awareness;

2. Firmly establish the totality of brand meaning in the minds of customers by strategically linking a host of brand associations  What are you? Brand meaning/performance/imagery: PODs & POPs;

3. Elicit the proper customer responses to the brand  What do I think/feel about you? Brand responses/judgments/feelings: positive, accessible reactions;

4. Convert brand responses to create brand resonance and an intense, active relationship between customers and the brand. What kind of association and how much of a connection would I like to have with you? Brand relationships/resonance: intense, active loyalty.

We cannot establish meaning unless we have created identity, responses cannot occur unless we have developed the right meaning, and we cannot forge a relationship unless we have elicited the proper responses.

Brand building blocks = the above steps in a pyramid with resonance on top. Brands will only have significant brand equity if they reach the top of the pyramid.

Step 1. Brand salience (brand building block 1)

Brand salience = measures various aspects of awareness of the brand and how easily and often the brand is evoked under various situations or circumstances.

Building brand awareness helps customers understand the product category in which the brand competes and what products are sold under the brand name. it also ensures that they know which of their needs the brand is designed to satisfy.

It gives the product an identity by linking brand elements to a product category and associated purchase/consumption/usage situation. The depth of brand awareness measures how likely it is for a brand element to come to mind and the ease with which it does so. The breadth measures the range of situations in which the brand element comes to mind and depends to a large extent on the organization of brand and product knowledge in memory.

Product category structure = how product categories are organized in memory. In consumers’ minds, a product hierarchy exists, with product class information at the following levels, 1 being the highest:

1. Product class information;

2. Product category information;

3. Product type information;

4. Brand information.

Example: a consumer first chooses between water or a flavored beverage. Then he decides whether or not to have an alcoholic drink, and then he chooses a brand.

A brand must not only be top-of-mind and have sufficient mind share, it must also do so at the right times and places. For many brands, the key question is not whether customers recall it, but where, when, and how easily and often they think of it. Brands that are forgotten in usage situations should increase brand salience and the breadth of brand awareness. It may be harder to change existing brand attitudes than to remind people of their existing attitudes toward a brand.

A highly salient brand is one that has both depth and breadth of brand awareness. Salience is the first step and for many customers it is not sufficient because other considerations such as the image of the brand may play a role. Creating brand meaning includes establishing a brand image, made up of brand associations related to performance and imagery.

Step 2.1 Brand performance (brand building block 2)

The product itself is the primary influence on what consumers experience with a brand. A product that fully satisfies consumer needs is a prerequisite for successful marketing. Brand performance = how well the product/service meets customers’ more functional needs. Important types of attributes/benefits that underlie brand performance are:

• Primary ingredients and supplementary features: customers have beliefs about the levels at which the primary ingredients of the product operate. Some are essntial and necessary for a product to work, others are supplementary features that allow for customization.

• Product reliability, durability, and serviceability: realiability = the consistency of performance over time and from purchase to purchase, durability = the expected economic life of the product, and serviceability = the ease of reparing the product if needed.

• Service effectiveness, efficiency, and empathy: service effectiveness = how well the brand satisfies customers’ service requirements, service efficiency = the speed and responsiveness of service, and service empathy = the extent to which service providers are seen as trusting, caring, and having the customer’s interests in mind.

• Style and design: consumers look beyond the functional aspects to more aesthetic considerations such as size and color. Performance may also depend on how a product looks, feels, smells, etc.

• Price: a particularly important performance association because consumers may organize their knowledge in terms of the price tiers of different brands within a category.

Step 2.2 Brand imagery (brand building block 3)

Brand imagery depends on the extrinsic properties of the product. It is the way people think about the brand abstractly, rather than what they think the brand actually does. Imagery = more intangible aspects of the brand. Four main kinds of intangibles are user profiles, purchase and usage situations, personality and values, and history, heritage, and experiences.

User imagery can be customers’ mental image of actual users of the brand or idealized users. Consumers may base this image on factors like gender, age and income, but also on psychographic factors like careers, social issues, and attitudes.

Purchase and usage imagery tells consumers under what conditions or situations they can/should buy and use the brand. Associations can relate to a type of channel, to specific stores, and to ease of purchase and associated rewards.

Brand personality and values can be divided into five dimensions: sincerity, excitement, competence, sophistication, and ruggedness (outdoorsy and tough). Marketing and communications may be influential in affecting brand personality because of the inferences consumers make about the underlying user/usage situation depicted in an advertisement. The actors in an ad, the tone or style, and the emotions evoked by the ad can affect brand personality. When user and usage imagery are important to consumer decisions, brand personality and imagery and more likely to be related. Consumers often choose and use brands that have a brand personality consistent with their own self-concept or the desired image they have of themselves. Consumers who are high self-monitors and sensitive to how others see them are more likely to choose brands whose personalities fit the consumption situation.

Brand history, heritage, and experiences may recall personal experiences and episodes or past behaviors and experiences of friends, family, or others. They can be highly personal and individual, or shared by many people. These types of associations help create strong PODs. They draw upon more specific, concrete examples that transcend the generalizations that make up the usage imagery.

The brand associations making up the brand image and meaning can be characterized according to three dimensions: strength, favorability, and uniqueness. Successful results on these dimensions produce the most positive brand responses, leading to brand loyalty. It is essential to create strong, favorable, and unique associations in order to build CBBE. Brand responses can be either brand judgments or brand feelings.

Step 3.1 Brand judgments (brand building block 4)

Brand judgments = customers’ personal opinions about and evaluations of the brand, which they form by putting together all the different brand performance and imagery associations. Four types are important:

Judgments about brand quality: brand attitudes are consumers’ overall evaluations of a brand and form the basis for brand choice. The most important ones relate to the perceived quality and to customer value and satisfaction.

Judgments about brand credibility = the extent to which customers see the brand as credible in terms of three dimensions:

• Brand expertise: is the brand seen as competent, innovative, and a market leader?

• Brand trustworthiness: is the brand dependable and keeping customer interests in mind?

• Brand likability: is the brand fun, interesting, and worth spending time with?

Judgments about brand consideration: depend in part on how personally relevant customers find the brand and are a crucial filter in terms of building brand equity. Consumers must deem a brand relevant and give it serious consideration, otherwise they will keep it at a distance.

Judgments about brand superiority = the extent to which customers view the brand as unique and better than other brands. It is critical to building intense and active relationships with customers and depends on the number/nature of unique brand associations.

Step 3.2 Brand feelings (brand building block 5)

Brand feelings = customers’ emotional responses and reactions to the brand. They also relate to the social currency evoked by the brand. Trustmark = a name/symbol that emotionally binds a company with the desires and aspirations of its customers, ultimately a lovemark. Transformational advertising = advertising designed to change consumers’ perceptions of the actual usage experience with the product. They need to love the offering, otherwise they will not be interested. Important types of brand-building feelings are:

• Warmth: consumers may feel sentimental, warmhearted, or affectionate about the brand;

• Fun: consumers may feel amused, lighthearted, joyous, playful, cheerful, etc.;

• Excitement: the brand makes consumers feel energized, being alive, cool, etc.;

• Security: consumers feel safe, comfortable, and self-assured;

• Social approval: the brand gives consumers a belief that others look favorably on their appearance, behavior, etc.;

• Self-respect: the brand makes consumers feel better about themselves, they feel pride, accomplishment or fulfillment.

Warmth, fun, and excitement are experiential and immediate feelings , increasing in level of intensity. The latter three are private and enduring, increasing in level of gravity.

What matters ultimately about consumer responses, is how positive and accessible they are. Brand judgments and feelings can favorably affect consumer behavior only if they internalize or think of positive responses in their encounters with the brand.

Step 4. Brand resonance (brand building block 6)

Brand resonance = the nature of the relationship that the customer has with the brand and the extent to which customers feel that they are ‘in sync’ with the brand. It is characterized in terms of intensity (= the depth of the bond customers have with the brand) and activity (= repeat purchases and the extent to which they seek out brand information, events, and other loyal customers). Categories of brand resonance are:

Behavioral loyalty = repeat purchases and the amount or share of category volume attributed to the brand (the share of category requirements). How often do customers purchase a brand and how much do they purchase? The brand must generate sufficient purchase frequencies and volumes in order to generate bottom-line profit results.

Attitudinal attachment: customers should go beyond having a positive attitude to viewing the brand as something special in a broad context. They have to love the brand. Creating greater loyalty requires deeper attitudinal attachment, through marketing programs and products that fully satisfy consumer needs.

Sense of community: customers may feel affiliated with other people associated with the brand. A stronger sense of community among loyal users can engender favorable brand attitudes and intentions.

Active engagement = when customers are willing to invest time, energy, money, and other resources in the brand beyond those expended during purchase/consumption. Strong attitudinal attachment, social identity, or both are necessary for active engagement with the brand to occur.

Brand-building implications

The brand resonance model with its 4 steps mentioned above, also reinforces a number of important brand tenets:

Customers own the brands: the strongest brands will be those to which consumers become so attached that they become evangelists and attempt to share their beliefs and spread the word about the brand. The power of a brand and its ultimate value to the firm reside within customers. The success of a company’s marketing efforts ultimately depends on how consumers respond and the actions they take.

Don’t take shortcuts with brands: a great brand is the product of carefully accomplishing a series of logically linked steps with consumers. The length of time to build a strong brand will be directly proportional to the amount of time it takes to create sufficient awareness and understanding so that firmly held and felt beliefs and attitudes about the brand are formed that can serve as the foundation for brand equity.

Brands should have duality: they must appeal to both the head and the heart. Strong brands blend product performance and imagery to create a rich, varied, but complementary set of consumer responses to the brand.

Brands should have richness: the various associations making up the brand image may be reinforcing, helping strengthen or increase the favorability of other brand associations, or they may be unique, helping add distinctiveness or offset some potential deficiencies. Strong brands have both breadth (in terms of duality) and depth (in terms of richness). Brands should not necessarily be expected to score highly on all dimensions and categories making up each core brand value.

Brand resonance provides important focus: marketers building brands should use resonance as a goal and a means to interpret their brand-related marketing activities. To what extent is marketing activity affecting the key dimensions consumer loyalty, attachment, community and engagement? And is it creating brand performance and imagery associations and consumer judgments and feelings that will support these dimensions?

Consumers cannot experience an intensive, active loyalty relationship with all the brands they consume. Some brands will be more important (have more resonance potential) to them than others.

The brand value chain

To better understand the ROI of marketing investments, the brand value chain is necessary. Brand value chain = a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value. It recognizes that many different people within an organization can affect brand equity and need to be aware of relevant branding effects. It also assumes that the value of a brand ultimately resides within its customers. The brand value creation process stages:

Stage 1. Marketing program investment

When the firm invests in a marketing program targeting actual or potential customers. The ability of this investment to transfer or multiply farther down the chain depends on qualitative aspects of the marketing program and the program quality multiplier = the ability of the marketing program to affect the customer mind-set. Means to judge the quality (DRIVE): The distinctiveness, relevance, integrated, value and excellence of the program.

Stage 2. Customer mind-set

The associated marketing activity affects the customer mind-set as reflected by the brand resonance model. The 5 As highlight important measures of the mind-set: brand awareness, associations, attitudes, attachment, and brand activity. Awareness supports associations, which drive attitudes that lead to attachment and activity. Brand value is created at this stage when customers have deep, broad brand awareness, appropriately strong, favorable, and unique POPs and PODs, positive brand judgments and feelings, intense brand attachment and loyalty, and a high degree of brand activity.

The ability of the customer mind-set to create value at the next stage depends on external factors, called the marketplace conditions multiplier = the extent to which value created in the minds of customers affects market performance depends on factors beyond the individual customers. Factors: competitive superiority, channel and other intermediary support (how much effort is being put forth by various marketing partners), and customer size and profile. The value created in the minds of customers will translate to favorable market performance when competitors fail to provide a significant threat, when channel members and other intermediaries provide strong supports, and when a sizable number of profitable customers are attracted to the brand.

Stage 3. Market performance (six key outcomes of customer response)

This mind-set produces the brand’s performance in the marketplace (how much and when customers purchase, what they pay for it, etc.). Price premiums, price elasticities, and market share determine the direct revenue stream attributable to the brand over time. Brand value is created with higher market shares, greater price premiums, and more elastic responses to price decreases and inelastic responses to price increases. Brand expansions, the success of the brand in supporting line and category extensions and new-product launches, capture the brand’s ability to add enhancements to the revenue stream. Reduced marketing expenditures (cost structure) thanks to the prevailing customer mind-set, means that the same level of effectiveness can be achieved at a lower cost because ads are more memorable, sales calls more productive, etc.

When combining the five outcomes, they lead to brand profitability = the brand value created in terms of stock market valuation. This depends on external factors according to the investor sentiment multiplier = a host of factors in arriving at brand valuations and investment decisions: market dynamics, growth potential, risk profile, and brand contribution. The value the brand creates in the marketplace is fully reflected in shareholder value when the firm is operating in a healthy industry and when the brand contributes a significant portion of the firm’s revenues and has bright prospects.

Stage 4. Shareholder value

The investment community considers the market performance to arrive at an assessment of shareholder value in general and a value of the brand in particular. Important indicators of shareholder value are stock price, the price/earnings multiple, and overall market capitalization for the firm.

Implications

According to the brand value chain, marketers create value first by making shrewd investments in their marketing program and then by maximizing the program, customer, and market multipliers that translate that investment into bottom-line financial results. Implications of the value chain:

Value creation begins with the investment of a well-funded, well-designed, and well-implemented marketing program.

Value creation requires more than the initial marketing investment. It also means ensuring that value transfers from stage to stage.

The brand value chain provides a detailed road map for tracking value creation that can make marketing research and intelligence efforts easier. The marketing program investment stage is straightforward and can come from the marketing plan and budget. Both customer-mind-set and the program quality multiplier can be assessed with customer research. Market performance and the marketplace conditions multiplier appear in market scans and internal accounting records. Shareholder value and investor sentiment multiplier can be estimated through investor analysis and interviews.

Modifications of the brand value chain can expand its relevance and applicability:

• There are a number of feedback loops, e.g. stock prices having an important effect on employee motivation;

• The value creation may not occur sequentially, e.g. stock analysts may react to an ad campaign for the brand and factor those reactions directly into their assessments;

• Some marketing activities may have only very diffuse effects that manifest over the long term, e.g. social responsibility marketing might affect customer sentiment slowly over time;

• Both the mean and the variance of some brand value chain measures could matter, e.g. a niche brand may receive very high marks but only across a very narrow range of customers.

Chapter D. Choosing brand elements to build brand equity

Brand elements/identities = those trademarkable devices that serve to identify and differentiate the brand. The main ones are brand names, URLs, logos, symbols, characters, spokespeople, slogans, jingles, packages, and signage. The CBBE model suggests that marketers should choose brand elements to enhance brand awareness; facilitate the formation of strong, favorable, and unique brand associations; or elicit positive brand judgments and feelings. The test of brand-building ability of an element is what consumers would think/feel about the product if they knew only that particular element and nothing else about it.

Criteria for choosing brand elements

Memorability, meaningfulness, and likability are the marketer’s offensive strategy and build brand equity. Transferability, adaptability, and protectability play a defensive role for leveraging and maintaining brand equity in the face of different opportunities and constraints.

Memorability: brand elements that promote the achievement of a high level of brand awareness are inherently memorable and attention-getting and therefore facilitate recall/recognition in purchase/consumption settings.

Meaningfulness: two important criteria are how the brand element conveys general information about the function of the product or service (determinant of brand awareness and salience) and specific information about particular attributes and benefits of the brand (determinant of brand image and positioning).

Likability: do customers find the brand element aesthetically appealing?

A memorable, meaningful, and likable set of brand elements is advantageous because consumers often do not examine much information in making product decisions. Descriptive and persuasive elements reduce the burden on marketing communications to build awareness and link brand associations and equity. The less concrete the possible product benefits are, the more important is the creative potential of the brand name and other brand elements to capture intangible characteristics of a brand.

Transferability = the extent to which the brand element adds to the brand equity for new products or in new markets for the brand. How useful is the brand element for line or category extensions? The less specific the name, the more easily it can be transferred across categories. To what extent does the brand element add to brand equity across geographic boundaries and market segments? This depends on the cultural content and linguistic qualities of the brand element.

Adaptability: because of changes in consumer values and opinions, or because of a need to remain contemporary, most brand elements must be updated. The more adaptable and flexible the brand element, the easier it is to update it.

Protectability = the extent to which the brand element is protectable in a legal and competitive sense. Marketers should choose elements than can be legally protected internationally, formally register them with the appropriate legal bodies, and vigorously defend trademarks from unauthorized competitive infringement. The brand must also be competitively protectable.

Options and tactics for brand elements

An ideal brand name is easily remembered, highly suggestive of the product class and the benefits services, fun, interesting, creative, transferable to a variety of products/settings, enduring and relevant over time, and strongly protectable. However, the more meaningful the name, the more difficult it is to use in other cultures. Therefore it is preferable to have multiple brand elements.

Brand names

The brand name captures the central theme/key associations of a product in a very economical fashion. Because it is closely tied to the minds of consumers, it is the most difficult element for marketers to change. Like any brand element, brand names must be chosen with the six general criteria of memorability, meaningfulness, likability, transferability, adaptability, and protectability in mind.

Brand names that are simple and easy to pronounce and spell, familiar and meaningful, and different, distinctive and unusual can improve brand awareness.

Simplicity reduces the effort consumers have to make to comprehend the brand name. To encourage word-of-mouth, they should also be easy to pronounce. The way a brand is pronounced can affect its meaning, so consumers may take away different perceptions if ambiguous pronunciation results in different meanings. Brand names may use alliteration (Coleco), assonance (Ramada), consonance (Hamburger Helper), rhythm (Better Business Bureau) or employ onomatopoeia (Ping golf clubs) to be pleasant.

Familiarity and meaningfulness: the brand name can be concrete or abstract in meaning. The brand name may suggest the product category (JuicyJuice) or link to a word the consumer already knows (Fiesta).

Differentiated, distinctive, and unique: recognition depends on consumers’ ability to differentiate between brands. Distinctive names makes recognition and learning intrinsic product information easier. The name must however also be credible and desirable to the product category.

The meaning consumers extract from the brand name are important because it is a compact form of communication. The name can be chosen to reinforce an important attribute or benefit association that makes up its positioning. It can also communicate more abstract considerations (e.g. Caress soap or Obsessions perfume). Consumers will find it easier to believe that a laundry detergent adds fresh scent if it has a descriptive name like Blossom than something neutral like Circle. However, when you later want to emphasize that the detergent fights tough stains, the name Blossom doesn’t fit well anymore.

Therefore it is important when choosing a meaningful name to consider the possibility of later repositioning and the necessity of linking other associations.

Morpheme = the smallest linguistic unit having meaning, e.g. real words like ‘man’ and prefixes, suffixes, or roots, (Nissan Sentra = Central + Sentry). Plosives are letters like b, c, d, and k that make names direct and less abstract, while sibilants like s and c sound softer and tend to make names more romantic and serene. The actual font may also change impressions.

Naming procedure:

1. Define objectives in terms of the six criteria, and define the ideal meaning of the brand. Also understand its role within the entire marketing program and the market;

2. Generate names, as many as possible;

3. Screen initial candidates against the branding objectives an considerations identified in step 1 and apply the test of common sense (are they pronounceable, do they have double meanings, etc.);

4. Study candidate names by collecting more extensive information about them;

5. Research the final candidates by consumer testing;

6. Select the final name that maximizes the firm’s branding and marketing objectives and then formally register it.

URLs/domain names

Many URLs are already registered nowadays. Companies may choose their brand names based on the URLs still available. Cybersquatting/domain squatting = registering a domain name with bad-faith intent to profit from the goodwill of a trademark belonging to someone else and then selling it at a higher price to that someone. Brand recall is critical for URLs because it increases the likelihood that consumers easily remember the URL to get to the site.

Logos and symbols

Logos have a long history as a means to indicate origin, ownership, or association. They range from word marks with text only, to entirely abstract designs (called symbols). Abstract logos can be quite distinctive and thus recognizable. The danger is that consumers don’t understand what the logo represents.

Advantages of logos are that they are easily recognized and thus can be used to identify a brand, that they are versatile (because they are often nonverbal, they can be used in every country), that they offer advantages when the full brand name is difficult to use (e.g. when it is very long), and that they can be easily adapted over time to achieve a more contemporary look.

Characters

Characters represent a type of brand symbol that takes on human or real-life characteristics (e.g. Pillsbury Doughboy or Peter Pan peanut butter). Because they are often colorful and rich in imagery, they tend to be attention getting and useful for generating brand awareness. Their human element can enhance likeability and help create perceptions of the brand as fun and interesting. Consumers find it easy to build a relation with a brand when the brand has a character. Also, characters do not grow old and can’t be ethically wrong like real spokespersons. They can easily be transferred across categories. A disadvantage is that they can be liked so much that they get all the attention and dampen brand awareness.

Slogans

Slogans = short phrases that communicate descriptive or persuasive information about the brand. They are an extremely efficient, shorthand methods to build brand equity. They can help build brand awareness by playing off the brand name in some way (e.g. The Citi never sleeps) or make strong links between the brand and the category (e.g. Television for women). Substitutions of the tag line can emphasize different ad campaigns (e.g. Nike women: Here I am, instead of the regular slogan Nike: Just do it).

Slogans can play of the brand image to build both awareness and image (Maybe she’s born with it, maybe it’s Maybelline), or contain product-related messages and other meanings (It takes a little more to make a Champion  Champion sportswear is made with extra care or Champion is related to top athletes). Some slogan’s become very strongly linked to the brand and become very successful (e.g. Mastercard’s ‘Priceless’). However, the slogan can quickly become overexposed and lose specific meaning. Then consumers do not think about what it means anymore. An old slogan can also prevent a brand from changing. When changing:

• Recognize how it is contributing to brand equity (through enhanced awareness or image);

• Decide how much of this equity enhancement is still needed;

• Retain the needed or desired equities still residing in the slogan as much as possible while providing new twists necessary to contribute to equity in other ways.

Jingles

Jingles = musical messages written about the brand with the potential to be registered in consumers’ minds. They are not nearly as transferable as other elements because they often convey product meaning in an indirect and abstract way. They might create potential associations for the brand which are most likely to relate to feelings, personality and other intangibles.

Packaging

Packaging = the activities of designing and producing containers or wrappers for a product. They must achieve a number of objectives:

• Identify the brand;

• Convey descriptive and persuasive information;

• Facilitate product transportation and protection;

• Assist in at-home storage;

• Aid product consumption.

The packaging must be aesthetically appealing but also structural designed (e.g. easy to open). The package can become an important means of brand recognition and convey information to build or reinforce valuable brand associations. Structural package innovations can create a POD that permits a higher margin. The right packaging can create strong appeal on the store shelf and help products stand out from the clutter. Some customers decide which item they buy on the packaging (last five seconds of marketing).

Packaging innovations can lower costs and/or improve demand. On the supply side, more eco-friendly packages are developed, while on the demand side, innovations can provide a short-term sales boost. Specialized designers bring artistic techniques and scientific skills to package design in an attempt to meet the marketing objectives of a brand. The shelf impact = the visual effect the package has at the point of purchase when consumers see it in the context of other packages in the category.

Firms change their packaging:

• To signal a higher price or to more effectively sell products through new or shifting distribution channels;

• When a significant product line expansion would benefit from a common look;

• To accompany a new product innovation to signal changes to consumers;

• When the old package looks outdated.

Putting it all together

Each brand element can play a different role in building brand equity, so marketers mix and match to maximize brand equity. Brand identity = the entire set of brand elements and their contribution to awareness and image. The cohesiveness of the identity depends on the consistency of the brand elements. Although the actual product or service itself is critical in building a strong brand, the right elements can be invaluable in developing brand equity.

Chapter E. Designing and implementing brand marketing programs

How do marketing activities in general build brand equity, and how can marketers integrate these activities to enhance brand awareness, improve brand image, elicit positive brand responses, and increase brand resonance?

New perspectives on marketing

Recently, firms have dramatically changed their marketing programs due to enormous shifts in their environments like rapid technological developments, more customer empowerment, the growth of interactive and mobile marketing and globalization. These changes give customers and companies new capabilities with a number of implications for the practice of brand management:

Customers can:

• Wield substantially more customer power;

• Purchase a greater variety of products and services;

• Obtain a great amount of information about everything;

• More easily interact with marketers in placing and receiving orders;

• Interact with other consumers and compare notes.

Companies can:

• Operate a powerful new information and sales channel with augmented geographic reach to inform and promote their company;

• Collect richer information;

• Facilitate two-way communication with their customers and prospects;

• Send ads, coupons, etc. by e-mail to those who give them permission;

• Customize their offerings to individuals;

• Improve their purchasing, recruiting, training, and communication.

Integration and personalization have become increasingly crucial factors in building and maintaining strong brands, as companies strive to use a broad set of tightly focused, personally meaningful activities to win customers.

Integrating marketing

Channel-/communication-/pricing strategies and other marketing activities can enhance or detract from brand equity. One implication of the customer-based brand equity is that the manner in which brand associations are formed doesn’t matter; only the resulting awareness, strength, favorability, and uniqueness of those associations does. Marketers should therefore evaluate all possible means to create knowledge, considering efficiency, cost, and effectiveness.

Schultz, Tannenbaum, and Lauterborn define integrated marketing communications in terms of contacts = any information-bearing experience that a customer/prospect has with the brand, the category, or the market. A person can come into contact with a brand e.g. via friends, packages, magazines, stores, customer service, etc.

Chattopadhyay and Laborie: there are many different ways to build brand equity, but also many firms to build their brand equity. You must think creatively and originally to create programs that can connect with customers. When trying unconventional methods and being creative, you must not sacrifice the goal of brand building and develop programs to provide integrated solutions and customer experiences that create awareness, spur demand, and cultivate loyalty.

Personalizing marketing

In the modern economy, there is an increased consumer desire for personalization because of individualization. This led to a focus on experiential- and relationship marketing:

Experiential marketing = promotes a product by not only communicating a product’s features and benefits but also connecting it with unique and interesting consumer experiences. The idea is not to sell something, but to demonstrate how a brand can enrich a consumer’s life. The experience economy of Pine & Gilmore:

• Commodity business  if you charge for stuff;

• Goods business  if you charge for tangible things;

• Service business  if you charge for the activities you perform;

• Experience business  if you charge for the time customers spend with you.

Berndt Schmitt: experiential marketing = any form of customer-focused marketing activity that creates a sensory-emotional connection to customers. Types of marketing experiences linked to the brand experience scale:

• Sense marketing appeals to the five senses  sensory;

• Feel marketing appeals to inner feelings and emotions  affective;

• Think marketing appeals to the intellect in order to deliver cognitive, problem-solving experiences to engage customers  intellectual;

• Act marketing targets physical behaviors, lifestyles, and interactions  behavioral;

• Relate marketing creates experiences by taking into account social desires  not in the brand experience scale.

Customers want to be entertained, stimulated, emotionally affected and creatively challenged.

Meyer and Schwager: the customer experience management (CEM) process involves monitoring these patterns: past patterns (evaluate completed transactions), present patterns (track current relationships), and potential patterns (conduct inquiries in the hope of finding new opportunities).

Relationship marketing = transcending the actual product/service to create stronger bonds with consumers and to maximize brand resonance, based on the premise that customers are the key to long-term brand success. It attempts to provide a more holistic, personalized brand experience in order to create stronger ties with customers by expanding both the breadth and depth of marketing programs. Benefits:

• Acquiring new customers can cost 5 times as much as retaining current ones;

• The average company loses 10% of its customers a year;

• When the customer defection rate is reduced by 5%, profits can increase by 25-85%;

• The customer profit rate tends to increase over the life of the retained customer.

Concepts that can be helpful with relationship marketing are mass customization, one-to-one marketing, and permission marketing:

Mass customization = making products to fit the customer’s exact specifications. Customers can communicate their preferences to the manufacturer online, which then assembles the product for a price comparable to that of a non-customized item. Many service organizations develop customer-specific services and try to improve the personal nature of their service experience. An advantage at the supply side is that retailers can reduce inventory. However, not every product is easily customized and product returns are problematic.

One-to-one marketing = consumers help add value by providing information to marketers, and marketers add value by taking that information and generating rewarding experiences for consumers. The firm then can create switching costs, reduce transactions costs, and maximize utility for consumers. This helps building strong, profitable relationships. Fundamental strategies of one-to-one marketing:

• Focus on individual consumers;

• Respond to consumer dialogue via interactivity;

• Customize products and services.

Permission marketing = the practice of marketing to consumers only after gaining their explicit permission. Consumers don’t like to be interrupted by marketing but do like receiving messages they gave permission for. By eliciting customer cooperation by giving customers some inducement (e.g. a free sample) for their permission, marketers might build stronger relationships with customers. Godin’s steps to effective permission marketing:

1. Offer an incentive to volunteer;

2. Offer the interest prospect a curriculum over time, teaching him about the product being marketed;

3. Reinforce the incentive to guarantee that the prospect maintains his permission;

4. Offer additional incentives to gain more permission;

5. Over time, leverage the permission to change consumer behavior toward profits.

A disadvantage is that permission marketing assumes that consumers know what they want. Marketers must recognize that consumers may need to be given assistance in forming their preferences. Participation marketing = when marketers and consumers work together to find out how the firm can satisfy consumer goals best.

Reconciling the different marketing approaches

From a branding point of view, the approaches are useful means of eliciting positive brand responses and creating brand resonance to build customer-based brand equity. Mass customization, one-to-one- and permission marketing can potentially engage consumers more actively. These three might be effective at creating greater relevance, stronger behavioral loyalty, and attitudinal attachment. Experiential marketing is particularly effective at establishing brand imagery and tapping into a variety of different feelings as well as helping to build brand communities. All four approaches can build stronger bonds between brands and consumers.

An implications of these approaches may be that the marketing mix (4 P’s) may not fully describe modern marketing programs. However, firms must still devise the 4 P’s as part of their program. The specifics of how they set their pricing, product, and distribution strategies must be changed considerably.

Product strategy

Perceived quality = customers’ perception of the overall quality of a product compared to alternatives and with respect to its intended purpose. Specific attributes of product quality, consistent with the brand resonance model, can be divided into these dimensions: primary ingredients and supplementary features, product reliability, durability and serviceability, and style and design. Product quality depends not only on functional performance but also on broader performance considerations like delivery and customer service. The augmented product aspects like symbolism and the personality reflected in the brand are often crucial to the brand equity. Consumers may base their evaluations just on simple heuristics, decision rules based on brand reputation or product characteristics.

Product strategies should focus on purchase (Proctor & Gamble’s ‘first moment of truth) and consumption (second moment of truth). Aftermarketing = those marketing activities that occur after the purchase. Innovative design, thorough testing, quality production, and effective communication enhance product consumption experiences that build equity.

Marketers may need to use other means to enhance consumption experiences, like user manuals, customer service programs, and loyalty programs:

User manuals that are too complicated, may make consumers’ initial product experiences frustrating. Marketers must develop manuals that comprehensively describe what the product can do and how consumers can realize these benefits. User manuals increasingly may need to appear in online and multimedia formats.

Customer service programs: there is a crucial need to better balance the allocation of marketing funds between conquest activities (e.g. advertising) and retention activities (e.g. customer retention programs). Creating stronger ties with consumers can be as simple as creating a well-designed customer service department. Aftermarketing can be the sales of complementary products that enhance the value of the core product. It can be an important determinant of profitability; aftermarketing sales are strongest when customers are locked in.

Loyalty/frequency programs’ purpose is identifying, maintaining, and increasing the yield from firm’s ‘best’ customers through long-term, interactive, value-added relationships. Loyalty programs reduce defection rates and increase retention. The value created by those programs, increases switching costs for your customers and gives you a better competitive position. 15% of a retailer’s most loyal customers can account for half its sales, and it can take 12-20 customers to replace a lost loyal one. How to build effective loyalty programs:

• Know your audience: employ sophisticated databases;

• Change is good: constantly update the program to attract new customers;

• Listen to your best customers: they can lead to improvements in the program;

• Engage people: make them feel special.

Marketers must develop products in a way that creates a positive brand image with strong, favorable, and unique brand associations; elicits favorable judgments and feelings about the brand; and fosters greater degrees of brand resonance. Product strategy entails choosing benefits the product will embody and marketing activities that consumers desire and the marketing program can deliver. A range of possible associations can become linked to the brand. Perceived value and quality are the most important ones. Relationship marketing has become a branding priority.

Price strategy

Consumers often rank brands according to price tiers in a category. Within any price tier, there is a range of acceptable prices, called price bands = indicate the flexibility and breadth marketers can adopt in pricing their brands within a tier. Besides mean and variance price perceptions, consumers have perceptions with a more inherent product meaning. They may infer the quality based on the price for example. Costs are not only monetary, but can also be time, energy, and psychological costs. Value-based pricing strategies = attempts to sell the right product at the right price.

When choosing a pricing strategy to build brand equity you have to determine a method for setting current prices and a policy for choosing the depth and duration of promotions and discounts. Many firms employ a value-pricing approach to setting prices and an everyday-low-pricing (EDLP) approach to determining their discount pricing policy over time:

Value pricing = pricing with the objective to uncover the right blend of product quality, costs, and prices that satisfies the needs and wants of consumers the profit targets of the firm. Brand lessons emerged from the ‘Marlboro episode’ wherein Marlboro dramatically decreased the prices of its cigarettes: strong brands can command price premiums, but not excessive premiums. Price increases without investments in the brand value increase the vulnerability of the brand to lower-priced competition, because consumers then no longer are convinced that the brand is worth its price.

An effective value-pricing strategy should balance three key components: product design & delivery, costs, and prices:

Product design and delivery: consumers are willing to pay more if they receive additional benefits/perceive added value. The creation of strong brand differentiation has led to price premiums, both offline and online.

Product costs: costs should be lowered as much as possible. However, cost reductions cannot sacrifice quality, effectiveness, or efficiency.

Product prices: understand exactly to what extent consumers value your brand and how much they will pay a premium over product costs.

Combined, the three components above create value. However, consumers also have to understand and appreciate this value. Therefore marketers need to engage in marketing communications to help consumers better recognize the value.

Different consumers may have different value perceptions and could receive different prices. Price segmentation = setting and adjusting prices for different market segments. Partly because of the internet, firms are increasingly employing yield management principles/dynamic pricing (e.g. looking at credit history or basing prices on the popularity of seats in an arena).

Everyday low pricing (EDLP) is a more consistent set of everyday base prices on products. However, price premiums and sales also have their advantages.

Forward buying = when retailers order more products than they plan to sell during the promotional period so that they can sell the overstock at a larger margin after that period. Diverting = retailers pass along or sell the discounted products to retailers in other areas. Both can hurt manufacturers.

To build brand equity, marketers must determine pricing strategies and adjust those. Value pricing strikes a balance among product design, costs, and prices. Consumers must find the price appropriate and fair. There is always tension between lowering pricing and increasing consumer perceptions.

Discount are often an expensive way to add value compared to brand-building marketing activities, because the lost revenue from lower margins is often greater than the additional costs of value-added activities.

Channel strategy

Marketing channels = sets of interdependent organizations involved in the process of making a product available for use/consumption. Possible channel types are classified into direct channels (selling through personal contracts from the company to prospective customers) and indirect channels (selling through third-party intermediaries like retailers). Direct channels may be preferable when product information needs and customization are high, and when quality assurance, purchase lot size, and logistics are important. Indirect channels are preferable when a broad assortment is essential, availability is critical, and after-sales service is important. Channels blend three key factors: information, entertainment, and experience.

The best strategies nowadays are the ones that integrate internet, phone, stores and catalogs. The risk with this hybrid channels is having too many channels, which leads to conflict or lack of support, or too little few channels, which leads to opportunities being overlooked. The goal is to maximize channel coverage and effectiveness while minimizing cost and conflict.

Indirect channels

Through their inventory and the means by which they sell, retailers strive to create their own brand equity. Simultaneously they can have an influence on the brands they sell, especially on the brand-related services they can provide or support. The interplay between the store’s and the brand’s image is important.

Shopper marketing = emphasizes collaboration between manufacturers and retailers on in-store marketing like brand-building displays designed to capitalize on a retailer’s capabilities and its customers. Shopper marketing can spur greater brand sales, but can also cause conflict. Retailers have the power to set the terms of trade with manufacturers, which means they can command more frequent and lucrative trade promotions. Manufacturers must employ a pull strategy to regain some of their lost leverage: creating strong brands that consumers will ask for at the retailer’s. Push strategy = when the manufacturer devotes his selling efforts to the channel members. Most successful manufacturers use both strategies.

In many markets, dealers have captured more of the retail sales, so manufacturers must keep them happy and profitable if they want the benefits of a smooth supply chain. Components of partnership strategies are:

Retail segmentation: retailers may need to be divided into segments because of their different marketing capabilities and needs. They are, in fact, customers too. Branded variants = branded items in a diverse set of durable and semi-durable goods categories that are not directly comparable to other items carrying the same brand name. They are a means to reduce retail price competition because they make direct price comparisons difficult.

Cooperative advertising: the manufacturer pays for a portion of the retailer’s advertising for the manufacturer’s product, if the retailer’s advertising adheres to certain specifications. It focuses more on the local level where communication efforts may have more relevance and impact. However, because the efforts are partly controlled by the retailer, there is a risk that the wrong message is communicated.

Direct channels

Some manufacturers introduce their own outlets or company-owned stores in order to gain control over the selling process and to build stronger customer relationships. Pop-up stores = temporary stores that blend retail and event marketing.

Benefits of company stores are that they are a means to showcase the (varieties of the) brand in a manner not easily achieved through normal retail channels. also they can function as a test market to gauge consumer response. A disadvantage is that some manufacturers lack the skills/resources/contacts to operate as a retailer. Also, there may be conflicts with existing retailers and distributors. Company stores can be a way of bolstering brand image and building brand equity (then stores are seen as attractions/advertisements instead of ways to generate profits).

Some marketers create their own shops within major department stores, as store-within-a-store. The goal is to find a win-win solution that benefits channels partners and consumers alike. Products can also be sold directly to consumers via phone, mail, or electronically (direct selling). Consumers like to order online and pick up or return in a physical store. They also like to browse potential purchases online but to buy them in the store, after they felt/tried/have seen the product.

Chapter F. Integrating marketing communications to build brand equity

Marketing communications = the means by which firms attempt to inform, persuade, and remind consumers about the brands they sell. They represent the voice of the brand and are a means by which it can establish a dialogue and build consumer relationships.

The new media environment

One important purpose of advertising and communication options is contributing to brand equity by creating brand awareness, linking POPs and PODs to the brand in consumer’s memory, eliciting positive brand judgments/feelings, and facilitating a stronger consumer-brand connection and brand resonance. A complicating factor in the development of marketing communication programs is the dramatical change of the media environment due to the digital revolution.

Model for judging the effectiveness of advertising to build brand equity:

1. What is your current brand knowledge?

2. What is your desired brand knowledge?

3. How does the communication option help the brand get from current to desired knowledge with consumers?

For a person to be persuaded by any form of communication, the following steps must occur:

1. Exposure;

2. Attention;

3. Comprehension;

4. Yielding = responding favorably to the message;

5. Intentions = planning to act in the desired manner of the communication;

6. Behavior = actually acting.

To increase the chance that a person is persuaded and thus that the campaign is successful, marketers must attempt to increase the likelihood that each step occurs by designing and executing the program carefully.

MC budgets are higher when there is low channel support, much change in the program over time, many hard-to-reach customers, more complex customer decision making, differentiated products and heterogeneous product needs, and frequent product purchases in small quantities. Besides efficiency considerations, every communication option may target different market segments.

Four major communication options

The four vital ingredients to the best brand-building programs are advertising and promotion, interactive marketing, events and experiences, and mobile marketing.

Advertising

Advertising = any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Given its complexity due to its number of possible strategic roles, the number of decisions to make and the complicated effect on consumers, it is difficult to provide guidelines for advertising.

Television advantages: it can be used to effectively demonstrate product attributes and to portray user/usage imagery, brand personality, emotions, and other brand intangibles.

Television disadvantages: consumers can overlook product-related messages and the brand because of distracting elements. Also many consumers skip commercials, while they are highly expensive.

Guidelines: the message strategy/ad positioning must be distinguished from the creative strategy (the way the add expresses the brand claims). Define the proper positioning to maximize brand equity, and identify the best creative strategy to communicate this. Creative strategies can be informational (elaborating on a specific product-related attribute) or transformational (portraying a non-product-related benefit). Many believe that borrowed interest devices like cute babies, puppies, celebrities and sex appeals can attract consumers’ attention. The risk with this is that they distract from the actual message.

Information-processing factors that affect advertising success are consumer targeting, the ad creative, consumer understanding, brand positioning, consumer motivation, and ad memorability. Copy testing = exposing a sample of consumers to candidate ads and to gauge their reactions.

Radio advantages: flexibility because of highly targeted radio stations, relatively inexpensive ads, and short deadlines for quick responses. Also, many people listen to the radio daily. Radio can be used on a local level as well.

Radio disadvantages: lack of visual image and the relatively passive nature of consumer processing that results.

Effective radio commercials identify the brand early, identify and repeat it often, and promise the listener a benefit early in the commercial.

Print media advantages: the ability to provide detailed product information, to build imagery, and to engage consumers. Magazines have a long shelf life and can be reread, while papers diminish quickly.

Print media disadvantages: the static nature and the fact that it is a passive medium.

Print advertisements need to be clear, consistent, and branded because consumers only quickly glance at them and then look at the most outstanding parts.

Direct response uses contact tools to communicate with/solicit a response from specific customers and prospects. Direct mail is still popular, while infomercials (combining the sell of commercials with the draw of educational information and entertainment) are becoming more popular.

Direct response advantage: it makes it easier for marketers to establish customer relationships. It can keep customers up to date and provide the firm with a learning opportunity about customers’ needs and wants. Precision marketing = combining data analytics with strategic messages and compelling colors and designs in communications.

Direct response disadvantages: intrusiveness and clutter. Marketers must develop an up-to-date list of current and potential customers, put forth the right offer in the right way, and track the effectiveness of the marketing program.

Place/out-of-home advertising = advertising outside traditional media via options like billboards and posters, movies, airlines, lounges, product placement, and point-of-purchase advertising.

Billboards do not have to stay in one place, but can also be put on trucks or taxis for example. Nowadays, many of them are digitalized and displayed in stadiums, in elevators, in toilets, etc. Many advertisements can be found in unconventional places like airplanes, lounges, movie theaters and classrooms. Product placement is the use of a brand in a TV show or movie (e.g. James Bond driving a BMW). Point-of-purchase advertising includes in-store displays, demonstrations, sampling, etc.

Advantages: they can reach a very precise and captive audience in a cost-effective and increasingly engaging manner. It is more effective at enhancing awareness or reinforcing existing associations than at creating new ones because the audience must process out-of-home ads quickly.

Disadvantages: demonstrating the reach and effectiveness is hard. Also consumer backlash against overcommercialization may be a problem.

Promotion

Sales promotions = short-term incentives to encourage trial/usage of a product. Advertising provides consumers a reason to buy, while promotions offer them an incentive to buy. The goal of sales promotions is to change the behavior of the trade (distributors, retailers) and to change the behavior of consumers so that they buy the brand for the first time/more often/earlier/higher quantity, etc.

Reasons for the grow in use of sales promotions: ad rates increased, consumers make more in-store decisions and are less sensitive to advertising. Also retailers become more powerful.

Sales promotions advantages: they permit price discrimination by charging different pricing to customers with different price sensitivity. Also they can build brand equity through information or actual product experiences. They can encourage the trade to maintain full stocks and actively support the manufacturer’s merchandising efforts too.

Disadvantages: decreased brand loyalty, increased brand switching, decreased quality perceptions, and increased price sensitivity. Price has become more and more important, breaking down traditional loyalty patterns. Also in some cases they merely subsidize buyers who would have bought the brand anyway. New buyers may only buy the product because it is on offer and won’t buy it after the promotional period has ended. Also, retailers now demand and expect price promotions.

Consumer promotions are designed to change the choices, quantity, or timing of consumers’ product purchases. Customer franchise building promotions include samples, demonstrations, and educational material, while noncustomer franchise building promotions include price-off packs, premiums, sweepstakes, and refund offers. The former can affect brand equity by enhancing the attitudes and loyalty of consumers towards a brand. Areas of promotional growth are in-store coupons and digital coupons.

Trade promotions = financial incentives/discounts given to retailers, distributors, and other channel members to facilitate the sale of a product through slotting allowances, displays, contests, dealer incentives, training programs, trade shows, and cooperative advertising.

Online marketing communications

The main advantages of online marketing are the low cost and the level of detail and degree of customization it offers. It is especially valuable in building relationships with consumers. Three crucial online brand-building tools are websites, online ads and videos, and social media.

Websites allow any type of consumer to find information about a certain product or brand. The most successful ones are those that provide information, rather than entertain their visitors. Besides company websites, there are many websites made by consumers like review sites, forums, and blogs. Very important is that websites are always up-to-date, easily navigable and that they provide reliable information.

Online ads and videos can be tracked, are nondisruptive, and can target specific consumers based on their browsing behavior. Disadvantage is that they are easy to ignore, consumers just click them away. E-mail ads have increased in popularity. The key is creating a good list of e-mail addresses. Search advertising presents consumers with ads related to their search behavior, based on keywords used in search engines like Google.

Social media allows consumers to share text, photos, audio, and video with each other online. Six key options are message boards and forums, chat rooms, blogs, Facebook, Twitter, and YouTube. Benefits are that they can give a company a voice, can help it communicate with its customers and that they complement other marketing communications. The main advantage is the possibility they provide to connect with customers. Twitter is seen as an ‘early warning system’ so marketers know exactly what is hot and happening. Facebook is more about long-term relationship building and engaging customers. However, only some of the consumers want to get involved with only some of the brands and, even then, only some of the time. That should be taken into account when using social media.

A successful digital campaign blends paid, owned, and earned media. Paid media = all the various forms of more traditional advertising (TV and print), owned media = those media channels the brand controls to some extent (website, social media, e-mails), and earned media = when consumers themselves communicate about the brand via social media, word-of-mouth, etc. Paid media jump starts owned, owned sustains earned, and earned drives costs down and effectiveness up.

Events and experiences

Virtual brand building must be complemented with brand building in the real world. Different kinds of events and experiences engage the consumers’ senses and imagination, changing their brand knowledge in the process. Event marketing = public sponsorship of events/activities related to sports, art, entertainment, or social causes. Event categories are (in order of expenditures) sports, entertainment tours, causes, arts, festivals, fairs and annual events, and associations and membership organizations. By becoming part of a consumer’s experience, sponsors can broaden and deepen their target market relationships. Reasons for sponsoring:

• To identify with a particular market/lifestyle;

• To increase awareness of the product/company;

• To create or reinforce consumer perceptions of key brand image associations;

• To enhance corporate image dimensions;

• To create experiences and evoke feelings; to express commitment to the community or on social issues;

• To entertain key clients or reward employees;

• To permit merchandising or promotional opportunities.

Disadvantages: the success of an event cannot easily be predicted/controlled and some consumers may resent the commercialization of events through sponsorship.

Developing successful event sponsorship means choosing the right events, designing the optimal program, and measuring its effects on brand equity. Potential guidelines for marketers are that the event must meet the brand’s marketing objectives and communication strategy, and that the event must have sufficient awareness, possess the desired image, and be capable of creating the desired effects with the target market. The right event causes the right, favorable associations with the sponsoring brand. The marketing program accompanying the sponsorship (like banners, signs, prizes, retail promotions, etc.) determines its success. Two approaches to measure the outcomes are the supply-side method (focuses on potential exposure to the brand by assessing the extent of media coverage: amount of time/space devoted to the brand) and the demand-side method (focuses on reported exposure from consumers.

Although the supply-side method provides quantifiable measures, it ignores the content of the communications that consumers receive. The demand-side methods explores the sponsorship’s ability to affect awareness, attitudes, and sales.

Mobile marketing

Smartphones are becoming increasingly important in consumers’ lives, and therefore mobile ad spending is increasing (and expected to grow rapidly). They are a unique opportunity for marketers because they can be in consumers’ hands at the point of sale or consumption. Geotargeting = when marketers take advantage of digital technology to send messages to consumers based on their location and the activities they are engaging in. This is one reason for the enormous privacy concerns related to mobile advertising. The key will be opt-in advertising, whereby users agree to allow advertisers to use specific, personal information to target individuals. Online retailers link mobile apps to their web stores in order to make it easier for consumers to buy products online.

Brand amplifiers

Brand amplifiers = efforts to engage consumers via word-of-mouth, PR and publicity. They are especially well-suited at amplifying the effects of the marketing communications named above.

Publicity = non-personal communications such as press releases, media interviews, press conferences, feature articles, newsletters, photographs, films, and tapes. Public relations = annual reports, fund-raising and membership drives, lobbying, special event management, and public affairs. PR needs to be a routine part of every MC program, because every company can profit from positive publicity.

Word-of-mouth’s power is its credibility and relevance; the most trusted information sources are people consumers know. Marketers must motivate consumers to talk about their brand and create a buzz among them (buzz marketing), for example by allowing consumers with an influential role to ‘discover’ a product in the hopes that they will recommend it to their peers. Another approach is to enlist genuine consumers able to give authentic-seeming endorsements of the brand, because many consumers are skeptical towards brand initiated buzz. However, this can be seen as a form of cultural corruption because consumers are, in fact, fooled. Other problems with buzz marketing are that not all products are ‘buzz worthy’, and that it only works in high-interest product categories.

Developing integrated marketing communication programs

Marketers should mix and match communication options to build brand equity: the sum of the options must be greater than its parts. Relevant criteria for an effective and efficient MC program are the 6 C’s:

Coverage | Contribution | Commonality | Complementarity | Conformability | Cost

Coverage = the proportion of the audience reached by each communication option, as well as how much overlap exists among communication options. To what extent do different communication options reach the designated target market, and the same or different consumers making up that market? When there is overlap in options, marketers must decide how to design their program to reflect the fact that consumers may already have something in memory prior to exposure to any option.

Contribution = the inherent ability of a marketing communication to create the desired response and communication effects from consumers in the absence of exposure to any other option.

Commonality = the extent to which common information conveyed by different communication options shares meaning across communication options. This is important because consumers recall information with a consistent meaning more easily than unrelated information. However, the unexpectedness of unrelated information can lead to more elaborate processing and stronger associations. The more coordinated executional information (conveying non-product-related information in different options) is, the more likely that this information can serve as a retrieval cue to other communication effects.

Complementarity = the extent to which different associations and linkages are emphasized across communication options. Those options should be mutually compensatory and reinforcing to create desired consumer knowledge structures.

Conformability = the extent to which an MC option is robust and effective for different groups of consumers. Two types are communication and consumer. When consumers are exposed to an MC, some of them will already have been exposed to other MC for the brand, and others will not. The ability of an MC to work at both levels is important. An MC option is conformable when it achieves its desired effect regardless of consumers’ past communication history. Multiple information provision strategy = providing different information within an option to appeal to different types of consumers. Broad information provision strategy = providing information that is rich and ambiguous enough to work regardless of prior consumer knowledge.

Cost: evaluations of MC on all of the preceding criteria must be weighed against their cost to arrive at the most effective and efficient communication program.

Two steps in designing integrated marketing communication programs are evaluating communication options and establishing priorities and trade-offs. There are not necessarily differences across communication types for contribution and complementarity, because each type can play a critical and unique role in achieving those communication objectives. Types vary in their breadth and depth of audience coverage and in terms of commonality and conformability according to the number of modalities/channels they employ (the more modalities, the greater the potential commonality and conformability). Three possible trade-offs with the integrated marketing communication choice criteria that result from overlaps in coverage are:

• Commonality and complementarity will often be inversely related: the more various MC options emphasize the same attribute, the less they can effectively emphasize other attributes.

• Conformability and complementarity will often be inversely related: the more a program accounts for differences in consumers across options, the less necessary it is that any communication be designed to appeal to many different groups.

• Commonality and conformability do not share an obvious relationship: it may be possible to develop e.g. a sufficiently abstract message, to effectively reinforce the brand across multiple communication types.

Chapter G. Leveraging secondary brand associations to build brand equity

The previous chapters showed how to build brand equity through the choice of brand elements, through marketing program activities, the marketing mix and MC strategies. This chapter is about another way of building brand equity: through the leverage of related or secondary brand associations.

Leveraging secondary brand associations = when a brand is linked to other entities that have their own knowledge structures in consumers’ minds, causing that they assume that some of the associations to those other entities are linked to that brand. This linkage can be important to create strong, variable, and unique associations if existing associations are deficient; and to reinforce existing associations in a different way.

Conceptualizing the leveraging process

A new set of associations from the brand to another entity may be created by linking the brand to that entity. That link may also affect existing associations. When consumers don’t know a product or don’t care about it, they may be more likely to make brand decisions based on secondary brand associations (= what they think about the store, the country the product comes from, or some other characteristic). If consumers have knowledge of the entity the brand is linked to, they may infer that some of the associations or feelings that characterize that entity, also characterize the brand. Cognitive consistency = in the minds of consumers, what is true for the entity, must be true for the brand. Three important factors in predicting the extent of leverage from linking the brand to another entity:

• Awareness and knowledge of the entity: consumers must have knowledge of, and feelings about the entity; otherwise they cannot transfer those to the brand;

• Meaningfulness of the knowledge of the entity: the knowledge about the entity must be relevant for the brand;

• Transferability of the knowledge of the entity: how strongly will the knowledge about the entity actually become linked to the brand?

Some types of entities are more likely to create or affect brand knowledge than others. Events may be especially favorable to the creation of experiences; people may be effective for the stimulation of feelings and other brands may be good for establishing certain attributes and benefits. Any identity may be associated with multiple knowledge dimensions, each of which may affect brand knowledge (in)directly. Judgments and feelings may transfer more easily than more specific associations.

When emphasizing source factors, you should take into account consumers’ awareness of the entity, as well as how the associations, judgments, or feelings for it might get linked to the brand. A commonality leveraging strategy = used when consumers have associations to another entity that are congruent with desired brand associations. Complementary brand strategy = when entities are chosen that represent a departure for the brand because there are few if any common associations. The risk with secondary associations is that you give away part of the control about the brand image.

Secondary brand associations can be leveraged by linking the brand to companies, geographic areas, distribution channels, other brands, characters, spokespersons, events, and other-third party sources like awards or reviews.

Company

Three main branding options for new products are:

• Create a new brand;

• Adopt or modify and existing brand;

• Combine an existing and a new brand.

In case the brand is linked to an already existing brand, knowledge about the latter may also become linked to the new brand. This can be useful when you have a family/corporate brand with much brand equity. However, in some cases, large companies introduce new brands in an attempt to convey a ‘smaller’ image. Brands and companies are linked to the category in the industry in which they are active. This may have a negative influence on new brands, e.g. in the oil industry it doesn’t matter what a company does; consumers’ just have a negative attitude towards the whole industry so will always be suspicious.

Country of origin and other geographic areas

Besides the company, also the area where the product has its roots may generate secondary associations. Many countries are known for expertise in certain categories or have a certain image. Consumers can choose brands from all over the world (the ‘cultural bazaar’) and base this choice upon their beliefs about the quality and image of those brands. When they choose brands with strong national ties, this may reflect the decision to maximize product utility and communicate self-image. Several brands can create a strong POD, in part because of consumers’ identification of and beliefs about the country of origin. Other geographic areas are possible, like states, regions, and cities (e.g. I love New York). It is legally required for the country of origin to appear on the package.

In the domestic market, country-of-origin perceptions may stir consumers’ patriotic notions or remind them of their past. With increasing globalization they may view domestic brands as important to their own culture and identity. Domestic brands are more favored in collectivistic countries than in individualistic ones. An additional challenge is how consumers actually define country-of-origin: what is the origin of US designed jeans fabricated in China, and do consumers even care?

Channels of distribution

Retail stores can indirectly affect brand equity through an ‘image transfer’ process because of the associations consumers link to a store. Retailers have their own images based on assortment, prices, etc. A consumer may infer certain characteristics about a brand on the basis of where it can be bought.

Co-branding

Co-branding = when two or more existing brands are combined into a joint product or are marketed together in some fashion. The main advantage is that a product may be uniquely and convincingly positioned by virtue of the multiple brands in the campaign. It can create more compelling PODs and POPs than otherwise might have been possible. In that way it can generate more sales from the existing target market as well as open opportunities with new markets. Besides that, it can reduce the cost of product launch, and it may be a valuable means to learn about consumers and how to approach them.

Advantages in short are: borrow needed expertise; leverage equity you don’t have; reduce cost of product introduction; expand brand meaning into related categories; source of additional revenue.

Disadvantages are the risks and lack of control that can arise from aligning a new brand to an existing one. Consumer expectations about the involvement level and commitment to co-brands will be high and unsatisfactory performance has a negative influence on all related brands. If the brands are very distinct, consumers may get confused about what the brands stands for and there may be a risk of overexposure when a brand is co-branded with too many other brands. This may also result in distraction and a lack of focus on existing brands. Disadvantages in short are: loss of control; risk of brand equity dilution; negative feedback effects; lack of brand focus and clarity; and organizational distraction.

To create a strong co-brand, both brands should have enough brand awareness, sufficient associations, and positive judgments and feelings of consumers. A necessary but not sufficient condition for success is that the brands separately have some potential brand equity. Also there must be a logical fit in values, capabilities, and goals between them. The licensor and licensee must benefit from financial agreements as a result of the shared equity, increased awareness for the licensor, and greater sales for the licensee.

Ingredient branding creates brand equity for materials, components, or parts that are necessarily contained within other branded products. Ingredient brands attempt to create enough awareness and preference for their product that consumers will not buy a host product that doesn’t contain the ingredient. The inclusion of a branded attribute significantly affects consumer choices because they infer certain quality characteristics as a result of the ingredient. Such ingredients can even become industry standards and thus POPs. One product may contain several branded ingredients, but ingredient brands are not restricted to products and services.

Advantages are that by creating consumer pull, the firm can generate greater sales and a broader consumer demand at a higher margin. There may also be better long-term supplier-buyer relationships. Two revenue streams are the direct one from the cost of the supplied ingredients, and an extra stream from the royalty rights paid to display the ingredient brand. For the manufacturer of the host product, the ingredient brand enhances its brand equity on the demand side, the host product brands may achieve access to new categories, different segments, and more distribution channels.

On the supply side, the host brands may be able to share some production and development costs with the ingredient supplier.

Disadvantages are that the costs of the supporting MC program can be high. Also there is loss of control because the market programs of both parties may have different goals. Manufacturers may be reluctant to become supplier dependent and may resent consumer confusion about what is the real brand, if the ingredient brand gains too much equity. The sustainability of competitive advantage may be uncertain because brands that follow may benefit from the increased understanding of consumers of the ingredient’s role. Follower brands then do not have to communicate so much the importance of the ingredient.

Ingredient branding must accomplish these tasks:

• Consumers must perceive that the ingredient matters;

• Consumers must be convinced that not all ingredient brands are the same and that this one is superior;

• A distinctive symbol/logo must be designed as a clear signal that the product contains the ingredient;

• A coordinated push and pull program must be put into place such that consumers understand the importance/advantages of the ingredient.

Licensing

Licensing creates contractual arrangements whereby firms can use the names, logos, etc. of other brands to market their own for some fixed fee. A firms is then ‘renting’ another brand to contribute to its own product’s brand equity. Licensing can be lucrative and provide legal protection for trademarks. Risks are that a trademark can become overexposed if marketers adopt a saturation policy and consumers can get confused. If the product fails to live up to the expectations, the brand name could be harmed. It can be dangerous to license a brand that is now popular, but later on appears to be a fad. Licensed entities can easily become overexposed and wear out quickly.

Corporate trademark licensing = the licensing of company names, logos, or brands for use on various, often unrelated products. Motivations for doing this may be generating extra revenues and profits, protecting trademarks, increasing brand exposure, and enhancing brand image. There are no inventory expenses, accounts receivables and manufacturing expenses so it is financially appealing. The risk is that the product will not live up to the reputation established by the brand.

Celebrity endorsement

A famous person can draw attention to a brand and influence how it is perceived. Celebrities’ fans may become brand fans. A celebrity endorser should be highly visible and have a rich set of useful associations, judgments, and feelings. He or she should be credible, trustworthy, and likable/attractive.

Potential problems are that celebrity endorses can be linked to too many brands, resulting in the fact that they are not perceived as strongly linked to a brand and are not sincere. There also must be a reasonable match between the celebrity and the product. When they lose popularity or get into trouble, the brand can be harmed. Also, many consumers feel celebrities are doing this work only for the money and do not believe they actually use the brand. Besides that, celebrities can be difficult to work with and may distract attention from the brand in ads.

Marketers should choose a well-known and well-defined celebrity whose associations are brand relevant and transferable. There also must be a logical fit between celebrity and brand. Third, the MC program should use the celebrity in a creative way that highlights the relevant associations and encourages their transfer. Marketing research must help identify potential candidates and facilitate the development of a proper MC program (and track its effectiveness).

Sporting, cultural, or other events

Sponsored events can contribute to brand equity by becoming associated to the brand and improving brand awareness, adding new associations, or improving the strength, favorability, and uniqueness of existing associations. A brand may seem more likeable/trustworthy when linked to an event.

Third-party sources

Secondary associations can be created in different ways by linking the brand to various third-party sources like magazines, experts, and critics. Such sources can be very credible. With the growth of social networks and blogs, a range of new opinion leaders are emerging.

Chapter H. Developing a brand equity measurement and management system

The previous chapters described strategies/approaches to building brand equity. In the next three, we will take a look at what consumers know and feel about and how they act toward brands and how marketers can develop measurement procedures to assess how well brands are doing. Given that the CBBE concept is the differential effect that brand knowledge has on customer response to marketing, there can be two approaches. Indirect approach = assesses potential sources of CBBE by identifying and tracking consumers’ brand knowledge. Direct approach = assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing program. These two approaches are complementary.

Brand equity measurement system = a set of research procedures designed to provide marketers with timely, accurate, and actionable information about brands so they can make the best possible tactical decisions in the short run and strategic decisions in the long run. The goal is to achieve a full understanding of the sources and outcomes of brand equity and to be able to relate the two as much as possible. The ideal system would provide complete, up-to-date, and relevant information about the brand and its competitors to the right decision makers at the right time within the organization. Three steps toward achieving that ideal are conducting brand audits, designing brand tracking studies, and establishing a brand equity management system.

The new accountability

Return of marketing investment (ROMI) = every marketing dollar spent justified as effective and efficient. Up to 70% of marketing expenditures cannot be linked to short-term incremental profits. New tools and procedures are needed to clarify and justify the value of expenditures.

Conducting brand audits

Brand audit = a comprehensive examination of a brand to discover its sources of brand equity. It is an inspection of an outside firm with a report about the firm’s financial health as the outcome. Marketing audit = a comprehensive, systematic, independent, and periodic examination of a company’s marketing environment, objectives, strategies, and activities with a view of determining problem areas and opportunities and recommending an action plan to improve the company’s marketing performance. Three steps of a marketing audit are agreement on objectives, scope, and approach; data collection; and report preparation and presentation. It is internally- and company-focused.

A brand audit is more externally- and consumer-focused and requires understanding of the sources of brand equity from the firm’s and the consumers’ perspective. It can set strategic direction for the brand, and should be conducted on a regular basis. Brand audits provide background information for managers as they set up their marketing plans and can have profound implications on brands’ strategic direction and resulting performance.

Its two steps are brand inventory and brand exploratory:

Brand inventory’s purpose is to provide a current, comprehensive profile of how all the products/services sold by a company are marketed/branded. All brand elements, attributes, policies and other marketing activities related to the brand are collected. The outcome should be an accurate, comprehensive, and up-to-date profile of how the product is branded. Competitive brands should also be profiled to determine PODs and POPs.

The brand inventory helps suggest on what consumers’ perceptions may be based. It can also supply useful analysis and initial insights into how brand equity may be better managed. Also, a thorough brand inventory should be able to reveal the extent of brand consistency, while revealing a lack of perceived differences among different products sharing the brand name that are designed to differ on key dimensions. An inventory could help uncovering undesirable redundancy and overlap that could lead to confusion and resistance from consumers and retailers.

Brand exploratory = research directed to understanding what consumers think and feel about the brand and how they act toward it in order to better understand sources of brand equity as well as any possible barriers. First it is important to look for prior research studies. Second, internal personnel should be interviewed to gain an understanding of their beliefs about consumers perceptions. Additional research is required to better understand customers (how they shop, and what they feel and think about brands). The brand exploratory’s first step often employs qualitative research techniques followed by more focused survey-based quantitative research.

Levy: Three criteria by which a quantitative technique can be classified/judged are direction (if it is related to the person or the brand), depth (the extent to which responses are superficial and concrete), and diversity (the way the information relates to other information gathered). The more specific the question, the narrower the range of information the respondent will give. More abstract and symbolic techniques result in more information, but it is important to follow up with other questions that clearly reveal the reasons behind that information. Ideally, there should be varied in direction, depth, and technique. Accurate interpretation is needed of what respondents explicitly say and implicitly mean.

Mental map = portrays in detail all salient brand associations and responses for a particular target market. Core brand associations = abstract associations that characterize the 5 to 10 most important brand dimensions. These associations can form the basis of the positioning in terms of how they create PODs and POPs.

Brand concept map (BCM) = elicits individual brand maps and combines them into a consensus map. In the brand elicitation stage the respondents are provided with a set of associations used in the mapping stage, wherein respondents were provided with a set of associations to build an individual brand map. In the third stage, the aggregation stage, individual maps are analyzed and common thinking uncovered.

One goal of research in the brand exploratory is a clear and comprehensive profile of the target market. Marketers use personas which represent detailed profiles of target consumers.

A more definitive assessment of the awareness, strength, favorability, and uniqueness requires quantitative research. All potentially salient associations identified in the qualitative phase should be assessed, often also for competitors.

Brand positioning and the supporting marketing program

The brand explanatory uncovers the current knowledge and determines the desired awareness, image, PODs and POPs. The ideal brand positioning balances these key considerations:

• What customers currently believe about the brand;

• What they will value in the brand;

• What the firm is currently saying about the brand;

• Where the firm would like to take the brand.

Once you have a good understanding from the brand audit of current knowledge structures and once you have decided on the desired structures for optimal positioning, you still may want to do additional research testing alternative tactical programs to achieve that positioning.

Designing brand tracking studies

Brand tracking studies collect information from consumers on a routine basis over time, usually through quantitative measures of brand performance on a number of key dimensions that can be identified in the brand audit or other means. They play an important role in monitoring the health of the brand and its equity and can help marketers better understand important considerations like category dynamics, consumer behavior, competitive vulnerabilities and opportunities, and marketing effectiveness and efficiency.

What to track

Product-brand tracking = tracking an individual branded product. You ask consumers which brands are at the top of their minds, move from general to specific questions, and measure all associations that may distinguish competing brands. The specific brand associations (potential source of equity), benefit associations (key POPs and PODs), and attribute beliefs that underlie the benefit associations should be measured in order to help explain changes in more evaluative benefit beliefs for a brand. The key brand associations that make up the potential sources of brand equity should be assessed based on strength, favorability, and uniqueness in that order. When associations are not strong enough, their favorability doesn’t matter, and if they are not favorable enough to influence consumers’ decisions, their uniqueness does not matter.

Corporate or family brand tracking = tracking the corporate/family brand separately/concurrently/both with individual products. Questions should reflect the level and nature of experience your respondents are likely to have had with the company. Important is which products the brand reminds consumers of and which are most influential in affecting consumer’s brand perceptions.

Global tracking = if the tracking covers various geographic markets, you need a broader set of background measures.

How to conduct tracking studies

Elements used are often the brand name, but also the logo for example.

Whom to track: there is often concentrated on current customers, but you can also track non-customers who may not be loyal to other brands and probably willing to switch. The market can be divided into light and heavy users. Other types of customers, like channel members and other intermediaries, can be tracked to better understand their beliefs about the brand. Such tracking is especially important in service organizations where personnel is closely involved in affecting brand equity.

When and where to track: continuous tracking studies collect consumer information continually over time. These smooth out abnormalities, unusual marketing activities, wrongly targeted events or an unlikely occurrence in the marketing environment to provide a more representative set of baseline measures. The frequency of such studies depends on the frequency of purchase, consumer behavior and marketing activity in the category. The more stable and enduring the associations (the more mature the market), the less frequent tracking is necessary.

How to interpret tracking studies: measures must be as reliable and sensitive as possible so they can detect subtle shifts. Therefore, questions must be phrased in a comparative way and appropriate benchmarks should be used. Such benchmarks can help comparing the brand to competitors and assessing the productivity of brand marketing teams. There must be allowed for respondents who don’t have an opinion and there must be accounted for the nature of the category (high- versus low involvement). One of the most important tasks is to identify the determinants of brand equity like PODs and marketing activities that have the most effective impact on brand knowledge.

Establishing a brand equity management system

Brand tracking studies and audits can provide a lot of information about how to build and measure brand equity. A good system to measure brand equity should decrease the likelihood that managers make bad decisions and increase the likelihood that they make good decisions about the brand. One of the biggest threats to brand equity comes from within the organization, and the fact that marketing managers often have their job for a limited period of time. That results in short-time perspectives and a lacking understanding and appreciation of brand equity (running the brand ‘without a license’).

To cope with those threats, many organizations made internal branding a top priority. Brand equity management system = a set of organizational processes designed to improve the understanding and use of the brand equity concept within a firm. Steps to implement such a system are creating brand charters, assembling brand equity reports, and defining brand equity responsibilities.

Step 1. Brand charter

Brand charter = a document that provides relevant guidelines to marketing managers within the company as well as to key partners outside the company such as marketing research suppliers or ad agency personnel. It is used to formalize the company view of brand equity and should:

• Define the firm’s view of branding and brand equity and explain why it is important;

• Describe the scope of key brands;

• Specify what the actual and desired equity is and define and clarify POPS, PODs, and the brand mantra;

• Explain how brand equity is measured;

• Suggest how marketers should manage brands with guidelines;

• Outline how to devise marketing programs along specific tactical guidelines;

• Specify the proper treatment of the brand in terms of trademarks, design, packaging, and communications.

The charter should be updated annually and when new products are introduced, marketers should reflect these adequately in the charter.

Step 2. Brand equity report

Brand equity report = a gathering of the results of the tracking survey and other relevant performance measures for the brand to be distributed to management regularly. It should describe what is happening with the brand and why and include all relevant internal measures of efficiency/effectiveness and external measures of brand performance and sources/outcomes of equity. It should also summarize consumers’ perceptions and behavior, and descriptive market-level information.

Marketing dashboards provide comprehensive but actionable summaries of brand-related information. They should use the right models for extensive thinking and management should sufficiently invest in them to keep them up to date and to keep staff actively involved.

Step 3. Brand equity responsibilities

To develop a brand equity management system that will maximize long-term brand equity, organizational responsibilities and processes with respect to the brand must be well defined. The implementation of the brand charter and equity reports should be centrally coordinated.

This can for example be done by a Chief Brand Officer (CBO) who reports directly to the CEO. Also, periodic brand development reviews can be organized, during which brand-sensitive material, the status of key brand initiatives, brand-sensitive projects, and new production and distribution strategies are reviewed. Also, brand positioning conflicts could be resolved during such review meetings.

Senior management should determine the marketing budgets and oversee the allocation of company resources. They can base such decisions on the outcomes of the brand equity measurement systems. The marketing function should be organized in such in way in that brand equity is optimized. More and more firms are hiring special brand managers nowadays and involve themselves in category management. This way, they are attempting to redesign their marketing organizations to better reflect the challenges faced by their brands. Because many firms are exploring other ways to conduct their marketing functions, the traditional marketing department is disappearing. The biggest challenge for a multiple-product, multiple-market organization, is in assuring that both product and place are in balance. This can be hard due to lack of oversight.

External relationships with suppliers and marketing partners must be managed carefully. Firms have been consolidating (continuing) their marketing partnerships and reducing the number of their outside suppliers. The less suppliers you work with, the better their understanding of your brand. Marketing partners should be provided with a brand charter so they can provide more brand consistent support.