CHAPTER:2

CUSTOMER-BASED EQUITY
AND BRAND POSITIONING

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A. Customer-Based Brand Equity

1. Defining Customer-Based Brand

Equity

2. Brand Equity as a Bridge

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 What is Brand Equity?

Brand equity is the added value endowed on

products and services, which may be reflected in
the way consumers, think, feel, and act with respect
to the brand.

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A.1. Defining Customer Based Brand Equity
(CBBE)
 Approaches brand equity from the perspective of
the consumer
 Positive
CBBE - When consumers react more favorably
 Negative CBBE - When consumers react less favorably

 Stresses that the power of a brand lies in what

resides in the minds and hearts of customers
 Differential effect that brand knowledge has on
consumer response to the marketing of that brand

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Customer-Based Brand Equity-
Tree key ingredients:
1. Differential effect
 Differences in consumer response
2. Brand knowledge
 A result of consumers’ knowledge about the brand
3. Consumer response to marketing
 Choice of a brand
 Recall of copy points from an ad
 Response to a sales promotion
 Evaluations of a proposed brand extension

2.5
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Marketing Advantages of Strong Brands

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Marketing Advantages of Strong Brands

1.
2.
3.
4.
5.
6.
7.
8.

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A.2. Brand Equity as a Bridge

Brand as a Reflection
of the Past

Brand as a Direction
for the Future

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Brand Equity as a Bridge

 Brand as a reflection of the past

• Marketers should consider the money spent in brand
building as an “ investment”.

• On the basis of the past experience, what consumers

saw, heard, learned, felt, and experienced about the
brand should be analyzed.

• The quality of the investment in brand building is the

most critical factor, not the quantity.

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Brand Equity as a Bridge

 Brand as a direction to the future

• Brand knowledge that marketers create over time, which
allows them to determine appropriate and
inappropriate future directions for the brand.
•

• Brand equity offers focus and guidance, provides a

means to interpret past marketing performance and
design future marketing programs.

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Making a Brand Strong:
Brand Knowledge

 Key to create brand equity

 Creates the differential effect that drives brand equity
 Marketers need an insightful way to represent how
brand knowledge exists in consumer memory

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Associative Network Memory Model

 Brand knowledge consists of brand nodes in

memory with a variety of linked associations.

 Views memory as a network of nodes and

connecting links
 Nodes - Represent stored information or concepts
 Links - Represent the strength of association between
the nodes
 Brand associations are informational nodes linked to
the brand node in memory
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Possible Apple Computer Associations

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B. Sources of Brand Equity

1. Brand Awareness

2. Brand Image

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B.1. Brand Awareness

• Brand awareness: Related to the strength of the

brand node or trace in memory.
• Brand recognition: Consumers’ ability to confirm prior
exposure to the brand when given the brand as a cue.
• Brand recall: Consumers’ 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.

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Brand Awareness

• Advantages of brand awareness

• Learning advantages
• Consideration advantages

• Choice advantages

• The elaboration- likelihood model

• Consumer purchase motivation
• Consumer purchase ability

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B.2. Brand Image
• Brand image: Consumers’ perceptions about a
brand.
• Positive brand image - Requires strong favourable and
unique brand associations.
• Forging strong associations with the appropriate
product category.
• Forms of brand associations:
• Brand attributes: Descriptive features that characterize a
product or service.
• Brand benefits: The personal value and meaning that
consumers attach to the product or service attributes.

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Brand Image
Strength of • More deeply a person thinks about product
information and relates it to existing brand
Brand knowledge, stronger is the resulting brand
Associations association

Favorability of • Is higher when a brand possesses relevant

Brand attributes and benefits that satisfy
Associations consumer needs and wants

Uniqueness of • “Unique selling proposition” of the product

Brand • Provides brands with sustainable
competitive advantage
Associations
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C. Identifying and Establishing Brand Positioning

1. Basic Concepts

2. Target Market

3. Nature of Competition

4. Points-of-Parity and Points-of-Difference

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 C.1. Basic Concepts
 Brand positioning
 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

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 C.2. Target Market
 Market segmentation: Divides the market into
distinct groups of homogeneous consumers who have
similar needs and consumer behavior
 Involves identifying segmentation bases and criteria
 Criteria
 Identifiability
 Size
 Accessibility
 Responsiveness

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Consumer Segmentation Bases

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Business-to-Business Segmentation Bases

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Segmentation Approaches Build on
Brand loyalty

Hypothetical Examples of Funnel Stages and Transitions

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 C.3. Nature of Competition
 Competitive analysis
• Considers resources, capabilities and likely intentions of other
firms.
• Allows marketers to choose markets where consumers can be
profitably served.
 Indirect competition
• Brands which do not face direct competition in its product
category
 Multiple frames reference
• Broader category competition or the intended future growth
of a brand.
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C.4. Points of Parity and Points of Difference

 Points-of-difference associations (PoD)

• Attributes or benefits that consumers strongly associate with
a brand, positively evaluate, and believe that they cannot
be found to the same extent with a competitive brand.
 Points-of-parity associations (PoP)
• Attributes shared with other brands.
• Three types of associations are:
• Category points- of-parity: Necessary conditions for brand choice.
• Competitive points-of-parity: Associations designed to negate competitors’ PoD.
• Correlational points-of-parity: Potential negative associations that arise from the
existence of other, more positive associations for the brand.

 Points-of-parity versus points-of-difference

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 D. Positioning Guidelines
Defining and Communicating the Competitive Frame of
Reference

Choosing Points-of-Difference

Establishing Points-of-Parity and Points-of-Difference

Straddle Positions

Updating Position Overtime

Developing a Good Positioning

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 Brand Mantra

• Short, three-to five-word phrase that captures the

irrefutable essence or spirit of the brand positioning.
• Provides guidance about:

• What products to introduce under the brand.

• What ad campaigns to run.

• Where and how the brand should be sold.

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 E. Brand Mantra

1. Designing a Brand Mantra

2. Implementing a Brand Mantra

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 E.1. Designing a Brand Mantra
• A good brand mantra should provide:
• Brand functions: Nature of the product or service or the type of experiences or
benefits the brand provides.
• Descriptive modifier: Combined with brand functions, helps delineate the brand
boundaries.
• Emotional modifier: Determines how a brand provides benefits and in what
ways.
Emotional Descriptive
Brand Brand Function
Modifier Modifier
Nike Authentic Athletic Performance
Disney Fun Family Entertainment
McDonald Fun Family Food
Coca Cola Happiness Sharing Tasty
Apple Smart Technologic Listen to music
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Contoh Tagline
 LG – “Life’s Good”
 Apple – “Think Different”
 Harley Davidson – “American
by birth Rebel by Choice”
 Lego – “Play On”
 Panasonic – “Ideas for Life”
 Reebok – “I am what I am”
 Walmart – “Save Money, Live
better”
 Red Cross – “The greatest
tragedy is Indifference”
 Fortune Magazine – “For the
men in charge of change”
 McDonalds – “I’m lovin it”
 Levi – “Quality never goes out of 
style”
 Nike – “Just Do It”
 Nokia – “Connecting People”
 Sony – “Make Believe”
 Kentucky Fried Chicken –
“Finger Lickin good”
 Olympus – “Your Vision. Our
Future”
 Burger King – “Have it Your
way”
 Visa – “Its Everywhere you want
to be”
 Coca-Cola – “Twist Cap to
Refreshment”
 Jaguar – “Grace, space, pace”
 Diesel Jeans – “Be Stupid”
 Ebay – “Buy it. Sell it. Love it”
Energizer – “Keeps going and
going and going”
 L’Oreal – “Because you’re worth
it”
 Nikon – “At the Heart of the
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image”
 Google – “Don’t be Evil”
 3M – “Innovation”
 Canon – “See what we mean”
 Volkswagen – “Think Small”
 Fedex – “When there is no
tomorrow”
 IBM – “Solutions for a small
planet”
 Disneyland – “The happiest
place on earth”
 Adidas – “Impossible is Nothing”
 AT&T – “Reach Out and Touch
Someone”
 Telkom – “The World in Your
Hand”
 D’Cost Accademy – “Stupid Guys
Keep Learning”
 E.2. Implementing Brand Mantra

• Should be developed at the same time as the brand

positioning.
• Requires more internal examination and involves

input from a wider range of company employees.

• Based on core brand associations, a brainstorming

session can attempt to identify PODs, POPs, and

different brand mantra candidates.

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