A. Brand Element Choice Criteria
i. The first three—memorable, meaningful, and likable—are brand
building.
ii. The latter three—transferable, adaptable, and protectable—are
defensive and help leverage and preserve brand equity against
challenges.
B. Developing Brand Elements
i. Often, the less concrete brand benefits are, the more important that
brand elements capture intangible characteristics.
ii. Like brand names, slogans are an extremely efficient means to build
brand equity
C. Designing Holistic Marketing Activities
i. Customers come to know a brand through a range of contacts and
touch points: personal observation and use, word of mouth,
interactions with company personnel, online or telephone experiences,
and payment transactions
ii. A brand contact is any information-bearing experience, whether
positive or negative, a customer or prospect has with the brand, its
product category, or its market
iii. Integrated marketing is about mixing and matching marketing
activities to maximize their individual and collective effects
iv. We can evaluate integrated marketing activities in terms of the
effectiveness and efficiency with which they affect brand awareness
and create, maintain, or strengthen brand associations and image.
v. Marketing programs should be put together so the whole is greater
than the sum of the parts.
D. Leveraging Secondary Associations
i. Brand equity can be borrowed by linking the brand to other
information in memory that conveys meaning to consumers
ii. These “secondary” brand associations can link the brand to sources
such as
1. The company itself (through branding strategies)
2. Countries or other geographical regions (through identification
of product origin)
3. Channels of distribution (through channel strategy)
4. Other brands (through ingredient or co-branding)
5. Characters (through licensing)
6. Spokespeople (through endorsements)
7. Sporting or cultural events (through sponsorship)
8. Some other third-party sources (through awards or reviews)
E. Internal Branding consists of activities and processes that help inform and
inspire employees about brands
i. Brand bonding occurs when customers experience the company as
delivering on its brand promise.
ii. All the customers’ contacts with company employees and
communications must be positive
iii. When employees care about and believe in the brand, they’re
motivated to work harder and feel greater loyalty to the firm.
iv. Some important principles for internal branding are:
1. Choose the right moment.
2. Link internal and external marketing. Internal and external
messages must match.
3. Bring the brand alive for employees. Internal communications
should be informative and energizing.
4. Keep it simple.
II. Measuring Brand Equity
A. An indirect approach assesses potential sources of brand equity by identifying
and tracking consumer brand knowledge structures.
B. A direct approach assesses the actual impact of brand knowledge on consumer
response to different aspects of the marketing.
C. The brand value chain is a structured approach to assessing the sources and
outcomes of brand equity and the way marketing activities create brand value
based on several premises.
i. Brand value creation begins when the firm targets actual or potential
customers by investing in a marketing program to develop the brand,
including marketing communications, trade or intermediary support,
and product research, development, and design.
ii. Customers’ mind-sets will affect buying behavior and the way
consumers respond to all subsequent marketing activity—pricing,
channels, communications, and the product itself—and the resulting
market share and profitability of the brand.
iii. The investment community will consider this market performance of
the brand to assess shareholder value in general and the value of a
brand in particular
iv. Three multipliers increase or decrease the value that can flow from one
stage to another.
1. The program multiplier determines the marketing program’s
ability to affect the customer mind-set and is a function of the
quality of the program investment.
2. The customer multiplier determines the extent to which value
created in the minds and hearts of customers affects market
performance. This result depends on competitive superiority
(how effective the quantity and quality of the marketing
investment of other competing brands are), channel and other
intermediary support (how much brand reinforcement and
selling effort various marketing partners are putting forth), and
customer size and profile (how many and what types of
customers, profitable or not, are attracted to the brand).
3. The market multiplier determines the extent to which the value
shown by the market performance of a brand is manifested in
shareholder value. It depends, in part, on the actions of
financial analysts and investors.
D. Millward Brown maintains that a brand’s financial success depends on its
ability to be meaningful, different, and salient and that brand predisposition is
measured by three brand equity metrics: power, premium and potential.
E. For brand equity to perform a useful strategic function and guide marketing
decisions, marketers need to fully understand
i. The sources of brand equity and how they affect outcomes of interest
ii. How these sources and outcomes change, if at all, over time.
iii. Brand audits are important for the former; brand tracking for the latter.
F. Five steps to follow to formally estimate the dollar value of brand (Interbrand)
i. Market segmentation
ii. Financial analysis
iii. Role of branding
iv. Brand strength
v. Brand value calculation
III. Managing Brand Equity
A. Marketers can reinforce brand equity by consistently conveying the brand’s
meaning in terms of (1) what products it represents, what core benefits it
supplies, and what needs it satisfies; and (2) how the brand makes products
superior and which strong, favorable, and unique brand associations should
exist in consumers’ minds
B. Reinforcing brand equity requires that the brand always be moving forward—
in the right direction and with new and compelling offerings and ways to
market them.
C. Revitalizing a brand often starts by trying to understand what the sources of
brand equity were to begin with and then deciding whether to retain the same
positioning or create a new one and, if so, which new one.
IV. Devising a Branding Strategy
A. A firm’s branding strategy often called its brand architecture and it reflects the
number and nature of both common and distinctive brand elements
B. A firm has three main choices:
i. It can develop new brand elements for the new product.
ii. It can apply some of its existing brand elements.
iii. It can use a combination of new and existing brand elements.
C. Branding strategy terms
i. When a firm uses an established brand to introduce a new product, the
product is called a brand extension.
1. Brand extensions can be line extensions, in which the parent
brand covers a new product within a product category it
currently serves, such as with new flavors, forms, colors,
ingredients, and package sizes.
2. They can also be category extensions, where marketers use the
parent brand to enter a different product category
ii. When marketers combine a new brand with an existing brand, the
brand extension can also be called a sub-brand
iii. The existing brand that gives birth to a brand extension or sub-brand is
the parent brand.
iv. If the parent brand is already associated with multiple products
through brand extensions, it can also be called a master brand or
family brand.
v. A brand line consists of all products—original as well as line and
category extensions—sold under a particular brand.
vi. A brand mix (or brand assortment) is the set of all brand lines that a
particular seller makes.
vii. Many companies are introducing branded variants, which are specific
brand lines supplied to specific retailers or distribution channels.
viii. A licensed product is one whose brand name has been licensed to other
manufacturers that actually make the product.
D. Branding Decisions: Alternative Branding Strategies
i. Individual or separate family brand names.
1. Companies often use different brand names for different
quality lines within the same product class.
2. A major advantage of separate family brand names is that if a
product fails or appears to be of low quality, the company has
not tied its reputation to it.
ii. Corporate umbrella or company brand name.
1. Development costs are lower with umbrella names because
there’s no need to research a name or spend heavily on
advertising to create recognition.
2. Corporate-image associations of innovativeness, expertise, and
trustworthiness have been shown to directly influence
consumer evaluations
iii. Sub-brand name, which combines two or more of the corporate brand,
family brand, or individual product brand names. The corporate or
company name legitimizes, and the individual name individualizes, the
new product.
iv. House of Brands versus a Branded House
1. The use of individual or separate family brand names has been
referred to as a “house of brands” strategy
2. The use of an umbrella corporate or company brand name is a
“branded house” strategy
3. A sub-brand strategy falls somewhere between, depending on
which component of the sub-brand receives more emphasis.
4. With a branded house strategy, it is often useful to have a
well-defined flagship product.
a. A flagship product is one that best represents or
embodies the brand as a whole to consumers.
b. It often is the first product by which the brand gained
fame, a widely accepted best-seller, or a highly admired
or award-winning product.
c. Flagship products play a key role in the brand portfolio
in that marketing them can have short-term benefits
(increased sales) as well as long-term benefits
(improved brand equity for a range of products).
E. Brand Portfolios reflect a need for multiple brands in order to pursue multiple
segments, and:
i. Increase shelf presence and retailer dependence in the store
ii. Attract consumers seeking variety who may otherwise have switched
to another brand
iii. Increase internal competition within the firm
iv. Yield economies of scale in advertising, sales, merchandising, and
physical distribution
v. Brand lines with poorly differentiated brands are likely to be
characterized by much cannibalization and require pruning.
vi. Flankers or fighter brands are positioned with respect to competitors’
brands
1. The more important (and more profitable) flagship brands can
retain their desired positioning.
2. Marketers walk a fine line in designing fighter brands, which
must be neither so attractive that they take sales away from
their higher-priced comparison brands nor designed so cheaply
that they reflect poorly on them.
vii. Cash Cows may be kept around despite dwindling sales because they
manage to maintain their profitability with virtually no marketing
support
viii. Low-End Entry may be to attract customers to the brand franchise and
act as “traffic builders”
ix. High-End Prestige adds prestige and credibility to the entire portfolio
F. Brand Extension Advantages
i. Most new products are in fact brand extensions
ii. Two main advantages of brand extensions
1. They can facilitate new-product acceptance
2. They provide positive feedback to the parent brand and
company.
iii. Extensions can reduce launch costs
iv. Positive feedback benefits
v. Renew interest and liking for the brand and benefit the parent brand by
expanding market coverage.
G. Disadvantages of Brand Extensions
i. Line extensions may cause the brand name to be less strongly
identified with any one product
ii. Brand dilution occurs when consumers no longer associate a brand
with a specific or highly similar set of products and start thinking less
of the brand.
iii. If a firm launches extensions consumers deem inappropriate, they may
question the integrity of the brand or become confused or even
frustrated
iv. Cannibalizing the parent brand
v. Firm forgoes the chance to create a new brand with its own unique
image and equity.
H. Success Characteristics—how marketers judge each potential brand extension:
how effectively it leverages existing brand equity from the parent brand as
well as how effectively, in turn, it contributes to the parent brand’s equity.
Marketers should ask a number of questions in judging the potential success
of an extension
i. Does the parent brand have strong equity?
ii. Is there a strong basis of fit?
iii. Will the extension have the optimal points-of-parity and
points-of-difference?
iv. How can marketing programs enhance extension equity?
v. What implications will the extension have for parent brand equity and
profitability?
vi. How should feedback effects best be managed?
V. Customer Equity: the sum of all the lifetime values for all customers
A. Acquisition depends on the number of prospects, the acquisition probability of
a prospect, and acquisition spending per prospect.
B. Retention is influenced by the retention rate and retention spending level.
C. Add-on spending is a function of the efficiency of add-on selling, the number
of add-on selling offers given to existing customers, and the response rate to
new offers.
D. The customer equity perspective focuses on bottom-line financial value.
i. It offers limited guidance for go-to-market strategies.
ii. It largely ignores some of the important advantages of creating a
strong brand, such as the ability to attract higher-quality employees,
elicit stronger support from channel and supply chain partners, and
create growth opportunities through line and category extensions and
licensing.
iii. The customer equity approach can overlook the “option value” of
brands and their potential to affect future revenues and costs.
iv. It does not always fully account for competitive moves and
countermoves or for social network effects, word of mouth, and
customer-to-customer recommendations.
E. Brand equity tends to emphasize strategic issues in managing brands and
creating and leveraging brand awareness and image with customers.
i. It provides much practical guidance for specific marketing activities.
ii. With a focus on brands, however, managers don’t always develop
detailed customer analyses in terms of the brand equity they achieve or
the resulting long-term profitability they create.
iii. Brand equity approaches could benefit from sharper segmentation
schemes afforded by customer-level analyses and more consideration
of how to develop personalized, customized marketing programs—
whether for individuals or for organizations such as retailers.
iv. There are generally fewer financial considerations put into play with
brand equity than with customer equity.
