BUSS454 2021 Chapter 2

Product and Brand Management
BUSS454
Chapter 2
Customer-Based Brand Equity and Brand
Positioning
BUSS454 Spring 2021 Tony Garrett
Learning Objectives
• Define customer-based brand equity

• Outline the sources and outcomes of customer based brand equity
• Identify the four components of brand positioning
• Describe the guidelines in developing a good brand positioning
• Explain brand mantra and how it should be developed

Learning Objectives


Customer Based Brand Equity
• Two questions that arise about brands

• What makes a brand strong?
• How do you build a strong brand?
• Customer Based Brand Equity Model (CBBE) helps answer
these questions
• Answers brand equity from the view of the consumer
• What do different brands mean to consumers?
• How does brand knowledge of consumers affect their response to
marketing activity?

• Differential effect that brand knowledge has on

consumer response to the marketing of that brand
• Differences in consumer response

• No differential then competition will be based on price
• Halo effect


• What the consumer has learnt, felt, seen and heard about a
brand as a result of experiences over time
• Strongly influenced by the marketing activity of the firm


• Consumer perceptions, preferences and behavior to all elements
of the brand marketing
• Choice of the brand
• Recall of copy points from an advertisement
• Response to a sale promotion
• Evaluations of a proposed brand extension

Marketing Advantages of Strong Brands
• Improved perceptions of product performance

• Greater loyalty
• Less vulnerability to competitive actions
• Less vulnerability to marketing crisis
• Larger margins
• More inelastic consumer response to price increases
• More elastic consumer response to price decreases
• Greater trade cooperation and support
• Increased marketing communication effectiveness
• Possible licensing opportunities
• Additional brand extension opportunities

Brand equity as a bridge
• Brands a reflection of the past

• Brands as a direction for the future

Making a brand strong
• Brand knowledge is the key to creating brand equity

• Creates the differential effect that drives brand equity
• How to assess brand knowledge
• Associative network memory model

Making a brand strong
• Associative network memory model

• Brand has associations related to it
• Related to memory – memories represented by nodes with
interconnected links (the associations)
• Brand knowledge
• 2 components
• Brand awareness – the strength of the memory node or memory which
can measure the consumer’s ability to remember the brand in different
conditions
• Brand Image – consumer's perceptions about a brand reflected by the
brand associations held in the consumer’s memory

Learning Objectives


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

• Brand Awareness
• Consists of:
• brand recognition – the ability to confirm prior exposure to the
brand when given the brand as a cue
• brand recall performance – consumer’s ability to retrieve the
brand from memory when given the product category, the needs
fulfilled by the category or a purchase or usage situation as a cue

• Advantages of brand awareness

• Learning advantages
• Awareness influences the formation and strength of the associations
that make up the brand image
• The marketer therefore must first establish a brand node in memory


• Consideration advantages
• Get the brand into the consideration set – the set of brands that the
consumer seriously considers for purchase (normally more than
one)


• Consideration advantages
• Choice Advantages
• Can impact the choices among the brands in the consideration set,
even if there are essentially no other associations with those brands
• E.g. low involvement purchase decisions – the elaboration likelihood
model (consumer purchase motivation and ability)

• Anything that causes consumers to experience one of a brand’s element can

increase familiarity and awareness of that brand element:
• Name, symbol, logo, character, packaging, or slogan, including
advertising and promotion, sponsorship and event marketing, publicity
and public relations, and outdoor advertising
• Repetition increases recognizability:
• But improving brand recall also requires linkages in memory to product
aspects

• Brand Image
• 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
• Brand associations may be either brand attributes or benefits

• Strength of Brand Associations

• The more deeply a person thinks about product information and
relates it to existing brand knowledge the stronger the brand
association will be
• Related to personal relevance and consistency with which it has
been presented over time
• Beliefs are formed through either
• brand attributes – descriptive features that characterize a product or
service
• Brand benefits are the personal value and meaning that the consumer
attaches to the product or service

• Favorability of Brand Associations

• To find favorable and unique associations careful analysis of the
consumer and competition to determine the best positioning for the
brand must be undertaken.
• Need to be desirable – relevant, distinctive and believable; and
deliverable – actual or potential ability of the product to perform,
the current or future prospects of communicating that performance,
and the sustainability of the actual and communicated performance
over time

• Uniqueness of Brand Associations

• Brand must have a sustainable competitive or “unique selling
proposition”
• Must understand competition
• May have some shared associations with other brands – helps
denote category membership
• Consumers will not hold all brand associations as being equal

Learning Objectives


Brand Positioning
• Basic Concepts
• Target Market
• Nature of Competition
• Points-of-Parity and Points-of-Difference

Brand Positioning
• Basic Concepts
• Act of designing the company’s offer and image so that it
occupies a distinct and valued place in the target customers’
minds
• Finding the proper “location” in the minds of consumers or
market segment
• Allows consumers to think about a product or service in the
“right” perspective
Need to find the Frame of Reference

Determining a frame of reference
• What are the ideal points-of-parity and points-of-

difference brand associations vis-à-vis the competition?
• Marketers need to know:
• Who the target consumer is
• Who the main competitors are
• How the brand is similar to these competitors
• How the brand is different from them

Identifying and Establishing Brand
Positioning
• Target Market
• Identifying the consumer target important as different
consumers may have different brand knowledge structures
therefore different perceptions and preferences.

Target Market
• A market is 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 who have similar
needs and consumer behavior, and who thus require
similar marketing mixes.
• Market segmentation requires making tradeoffs between
costs and benefits.

Target Market
Set of all actual and potential buyers

who have an interest
in, income for, and access to a product

Target Market
Market segmentation divides the market into distinct groups

of homogeneous
consumers who have similar needs
and consumer behavior

Target Market
• Segmentation basis
• Descriptive or customer oriented, or behavioral or product
oriented

Target Market
• Behavioral
• User status
• Usage rate
• Usage occasion
• Brand loyalty
• Benefits sought

Target Market
• Demographic
• Income
• Age
• Sex
• Race
• Family

Target Market
• Psychographic
• Values, opinions and attitudes
• Activities and lifestyle

Target Market
• Geographic
• International
• regional

Target Market (Industrial)
• Nature of Good
• Kind
• Where used
• Type of buy
• Buying Condition
• Purchase location
• Who buys
• Type of buy

Target Market (Industrial)
• Demographic
• Sic code
• Number of employees
• Number of product workers
• Annual sales volume
• Number of establishments

Criteria to guide segmentation
• Identifiability
• Size
• Accessibility
• Responsiveness

Hypothetical Examples of Funnel Stages and
Transitions

Nature of Competition
• What customer to target will depend on the nature of

competition
• Firms have targeted the segment in the past or decide to so in
the future
• Consumers may look at other brands in their purchase decisions
• Need to define competition broadly – look at benefits
offered

Points of Parity and Difference
• What is the basis of the positioning?

• Points of differences
• Attributes or benefits that consumers strongly associate with a
brand
• Positive
• What can not be found in the competition
• Related to USP (unique selling proposition)
• SCA – sustainable competitive advantage
• Look for the perceived uniqueness of the brand associations e.g.
design, performance, benefits …

• Points of Parity
• Not associations unique to the brand but may be shared with
other brands
• Category – represent the necessary (although not necessarily
sufficient) conditions for brand choice

other brands
• Category points of parity – represent the necessary (although not
necessarily sufficient) conditions for brand choice
• Competitive points of parity – associations designed to negate
competitors’ points of difference

other brands
• Category points of parity
• Competitive points of parity
• Points of parity easier to achieve than points of difference
• Points of difference must be seen as being superior points of
difference – but this is key to get positioning

Learning Objectives


Positioning guidelines
• Optimal brand positioning are achieved after

• Defining and communicating the competitive frame of reference
• Choosing and establishing points of parity and points of
difference

Positioning Guidelines
• Defining and communicating the competitive frame of

reference
• What is the product’s category membership
• May need to inform the brand’s category membership
• Reinforce category membership
• Have to define membership so that consumers have no confusion
as to what the point of differences are – may do sequentially –
doing it at the same time not effective

• Defining and communicating the competitive frame of

reference
• What is the product’s category membership
• May need to inform the brand’s category membership
• Reinforce category membership
• Have to define membership so that consumers have no confusion
as to what the point of differences are – may do sequentially –
doing it at the same time not effective
• May straddle two frames of reference

• Communicating the competitive frame of reference

• Often benefits are used to communicate category membership
• Use of exemplars can be used to denote POP or POD
• Use of product descriptors

Choosing Points of Difference
• Need choose POD that the consumer finds desirable and

believe can be delivered
• Both satisfied – POD is strong
• Desirability
• Relevance
• Distinctiveness
• Believability

Choosing Points of Difference
• Need choose POD that the consumer finds desirable and

believe can be delivered
• Both satisfied – POD is strong
• Deliverability
• Feasibility
• Communicability
• Sustainability

Establishing Points of Parity and Difference
• Attributes that make up POP or POD are negativity correlated

• E.g.
• Low price vs. high quality
• Taste vs. low calories
• Nutritious vs. good tasting
• Efficacious vs. mild
• Powerful vs. safe
• Strong vs. refined
• Ubiquitous vs. exclusive
• Varied vs. simple
Establishing Points of Parity and Difference
• Attributes that make up POP or POD are negativity

correlated
• Need to develop a product that performs on both dimensions
• Separate the attributes
• Leverage equity of another entity
• Redefine the relationship

Straddle Positions
• Type of positioning where a company is able to straddle

two frames of reference:
• With one set of points-of-difference and points-of-parity
• The points-of-difference in one category:
• Become points-of-parity in the other
• And vice-versa for points-of-parity

Updating Positions over Time
• Generally, positioning should be fundamentally changed

very infrequently:
• And only when circumstances significantly reduce the
effectiveness of existing POPs and PODs
• Yet, positioning will evolve to better reflect market
opportunities or challenges
• POD or POP may be refined, added, or dropped as
situations dictate

Updating the position over time
• An established brand can have problems

• Laddering – deepen the meaning of the brand to tap into core
brand associations
• Often useful to explore underlying consumer motivations
• Reacting – respond to competitive challenges that threaten an
existing positioning
• Competitive actions are often directed at eliminating points-of-
difference to make them points-of-parity:
• Or to strengthen or establish new points-of-difference

Laddering
• Understand the key associations

• Identify the core consumer motivations for the product
• E.g. Maslow’s Hierarchy of Needs
• Physiological
• Safety and security
• Social
• Ego
• Self actualization

Laddering
• Understand the key associations

• Identify the core consumer motivations for the product
• E.g. Maslow’s Hierarchy of Needs
• Look at Means-ends chains
• Attributes lead to benefits
• Laddering repeatedly asks what the implication of an attribute or
benefit is for the consumer

Reacting
• Competitive actions are often directed at eliminating

PODs or establish new PODs
• Options against competitive actions
• Do nothing
• Go on the defensive
• Go on the offensive

Learning Objectives


Developing a Good Positioning
• A good positioning:
• Has a foot in the present and a foot in the future:
• Needs to be somewhat aspirational so that the brand has
room to grow and improve
• Is careful to identify all relevant points-of-parity:
• Don’t overlook or ignore crucial areas where the brand is
potentially disadvantaged
• Should reflect a consumer point of view in terms of the benefits
that consumers derive from the brand
• Recognizes that a duality exists in the positioning of a brand:
• Rational and emotional components
Defining or Establishing Brand Mantras
• The core brand promise that can go across numerous

categories
• Core brand associations
• Those abstract associations that characterize the brand
• Establish the mental map
• Group brand associations into related categories with descriptive labels
• Brand Mantra
• The heart and soul of the brand
• A short statement that captures the essence of the brand

Designing a Brand Mantra
• Must economically communicate what the brand is and is not

• Brand function
• The type of experience the brand provides
• Descriptive Modifier
• Clarifies the nature of the of the function
• Emotional Modifier
• How does the brand provide the benefits and in what ways?
• Should be developed at the same time as the positioning considering

communication, simplification, and inspiration

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Product and Brand Management

• Define customer-based brand equity

BUSS454 Spring 2021 Tony Garrett

• Define customer-based brand equity

BUSS454 Spring 2021 Tony Garrett

• Two questions that arise about brands

BUSS454 Spring 2021 Tony Garrett

• Differential effect that brand knowledge has on

• Differences in consumer response

BUSS454 Spring 2021 Tony Garrett

• Differential effect that brand knowledge has on

BUSS454 Spring 2021 Tony Garrett

• Differential effect that brand knowledge has on

BUSS454 Spring 2021 Tony Garrett

• Improved perceptions of product performance

BUSS454 Spring 2021 Tony Garrett

• Brands a reflection of the past

BUSS454 Spring 2021 Tony Garrett

• Brand knowledge is the key to creating brand equity

BUSS454 Spring 2021 Tony Garrett

• Associative network memory model

BUSS454 Spring 2021 Tony Garrett

• Define customer-based brand equity

BUSS454 Spring 2021 Tony Garrett

• Customer based brand equity occurs when the consumer

BUSS454 Spring 2021 Tony Garrett

BUSS454 Spring 2021 Tony Garrett

• Advantages of brand awareness

BUSS454 Spring 2021 Tony Garrett

• Advantages of brand awareness

BUSS454 Spring 2021 Tony Garrett

• Advantages of brand awareness

BUSS454 Spring 2021 Tony Garrett

• Anything that causes consumers to experience one of a brand’s element can

BUSS454 Spring 2021 Tony Garrett

BUSS454 Spring 2021 Tony Garrett

• Strength of Brand Associations

BUSS454 Spring 2021 Tony Garrett

• Favorability of Brand Associations

BUSS454 Spring 2021 Tony Garrett

• Uniqueness of Brand Associations

BUSS454 Spring 2021 Tony Garrett

• Define customer-based brand equity

BUSS454 Spring 2021 Tony Garrett

BUSS454 Spring 2021 Tony Garrett

Need to find the Frame of Reference

• What are the ideal points-of-parity and points-of-

BUSS454 Spring 2021 Tony Garrett

BUSS454 Spring 2021 Tony Garrett

• A market is the set of all actual and potential buyers who

BUSS454 Spring 2021 Tony Garrett

Set of all actual and potential buyers

BUSS454 Spring 2021 Tony Garrett

Market segmentation divides the market into distinct groups

BUSS454 Spring 2021 Tony Garrett

BUSS454 Spring 2021 Tony Garrett

BUSS454 Spring 2021 Tony Garrett

BUSS454 Spring 2021 Tony Garrett