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Brand Equity For Strategic Advantage: Consumer Decision Making
Brand Equity For Strategic Advantage: Consumer Decision Making
Advantage: Consumer
Decision Making
B r a n d E q u it y a n d
D e c is io n M a k in g
H o w C o n s u m e rs S ta g e 1 : S ta g e 2 : Im p lic a t io n s fo r
Cope S c r e e n in g C o m p a r in g B ra n d M a n a g e m e n t
What does awareness and
image buy?
Influences how consumers make
choices
By changing how choices are made
we can change what is purchased
Overview
B r a n d E q u ity a n d
D e c is io n M a k in g
H o w C o n s u m e rs S ta g e 1 : S ta g e 2 : Im p lic a tio n s fo r
Cope S c r e e n in g C o m p a r in g B ra n d M a n a g e m e n t
Consumers are overloaded.
B r a n d E q u ity a n d
D e c is io n M a k in g
H o w C o n s u m e rs S ta g e 1 : S ta g e 2 : Im p lic a tio n s fo r
Cope S c r e e n in g C o m p a r in g B ra n d M a n a g e m e n t
Screening is important
Elimination occurs
because:
– The brand lacks a
feature (attribute)
– The brand does not
meet some cutoff
(price?)
Once eliminated a
brand is not
reconsidered.
How Does Brand Equity Effect
Screening?
Awareness: Can I recall this brand?
Imagine that your sewer is
backing up, and you are about
to leave town on a business trip.
Examples:
– Volvo and Safety
– Crest with Tartar Control
– American Express Travelers Checks
Screening: Summary
Large product classes are screened.
Elimination = Death
Brand Equity influences screening
– Recall for the consideration set
– Inferences about product attributes
– Setting the agenda for screening
B r a n d E q u ity a n d
D e c is io n M a k in g
H o w C o n s u m e rs S ta g e 1 : S ta g e 2 : Im p lic a tio n s fo r
Cope S c r e e n in g C o m p a r in g B ra n d M a n a g e m e n t
Screening simplifies choice, but
does not do the whole job.
Even when screening consumers seem to
examine 2-3 alternatives much more
carefully.
Process involves intense comparisons on a
small set of attributes.
How does this comparison process work?
How does this comparison
work?
Consumers compare other brands to one
brand
Often that brand serves as the reference
brand.
Key concept: Loss aversion…when
compared to the reference brand, losses
loom large.
Consumers judge value by…
The observed price relative to reference
price for the product, and
The observed price relative to the normal
or ‘fair’ price of the product
– Examples:
• Restaurants on Friday nights…
• Super Bowl ticket prices.
B r a n d E q u ity a n d
D e c is io n M a k in g
H o w C o n s u m e rs S ta g e 1 : S ta g e 2 : Im p lic a tio n s fo r
Cope S c r e e n in g C o m p a r in g B ra n d M a n a g e m e n t
To create value…
Brand must support a higher reference
price…
Must maintain this over time, even in the
face of stiff competition…
Applications:
– To raise price…
• New Models
• Price Bundling
• Etc…
What Strategic Element cannot
be duplicated?
You lower price, they can eventually
lower price
You can add a feature, they can
eventually ad that feature
But…