Master MSc in Digital Media

Brand Building

Brand Building

Lecture 1:
Introduction to Branding & Brand Equity

Vladimir Melnyk
30 September 2020
 Tutor
Contact Dr. Vladimir Melnyk
Professor of Marketing and Consumer Behavior
Carlos III University of Madrid
Contact: Vladimir.Melnyk@UC3M.es

CV ▪ Education:
▪ B.A. & MSc in Business Economics (Sumy State University, Ukraine)
▪ MSc in Economics (CORIPE, Turin, Italy)
▪ Research MSc in Marketing (Tilburg University, The Netherlands)
▪ PhD in Marketing & CB (Wageningen University, The Netherlands)
▪ Postdoc in Marketing & CB (Maastricht University, The Netherlands)
▪ Research focused on:
▪ Consumer decision making
▪ Marketing communication and Advertisement
▪ Social influence and Social marketing
▪ Consumer adoption of innovative products
 Course objectives
• Learn how product and brand managers make strategic and
tactical decisions during various stages of the product life cycle.
• Introduce major concepts, issues, and strategies in product and
brand management.
• Understand processes and practices of the strategic and tactical
management of a product and brand.
• Develop students’ skills in making decisions about products and
brands.
 Agenda
• Introduction to the course
• Evolution of branding?
• What are brands?
• Strong brands and Brand Equity
– Understand brand equity, it’s components and concepts
– Understand the benefits of brand equity on business performance
– Recognize managerial issues associated with building brand image
Rules & Tips
 Course materials
• Lectures
• Books:
– Beverland M. (2018). “Brand Management: Co-creating Meaningful
Brands”, London: Sage.
– Keller, K. L. (2019). “Strategic Brand Management: Global Edition”, Pearson
Prentice-Hall.
– Aaker, D. A. (2011), Building Strong Brands, London: Simon & Schuster.
• Case studies (asynchronous)
• Papers (asynchronous)
!!!Course Book!!!
Schedule
 Grading
• Individual activity 20% (>5.5)
– In-class participation
– Presentations
• Team Case presentation 15% (>5.5)
• Team Brand Challenge (course assignment) 25% (>5.5)
• Written exam: 40% (> 5.0)
– Open ended questions
 Active Participation

Handed in power point presentations about the cases and

active participation in class, should be judged as sufficient
to pass the course.  
 
Use the case discussions as a way to show your active
participation!
 Brand Challenge
Brand Audit & Brand Meaning Project
• Choose an existing • Create a new brand
company (big or small, • Analyze the brand in terms
known or unknown, global of Keller’s Pyramid of
or local) Brand-Building blocks
• Analyze the company in • Develop a branding
terms of Keller’s Pyramid of OR strategy for this company
Brand-Building blocks
• Describe strong and weak
points of the company’s
branding strategy
• Give recommendations to
the company of what to
adjust/ change/ improve in
their branding strategy
 Brand Audit
- Positioning statement (Positioning is the act of designing a company’s product
and product image to occupy a distinctive place in the target market’s mind)
- Summary of marketing efforts (4Ps) that support the brand’s
position
- Inventory of brand elements (including name, logo, characters,
packages, slogans or taglines, and endorsers that are used in
brand positioning)
- Current and forecasted market situation, including analyses of
two direct competitors and opportunities and threats to the
brand in the short-term future.
 Brand Meaning
- Target market perceptions of the brand in terms of
brand image.
- Emotions, beliefs, intentions associated with the brand
as well as purchase and usage behaviors associated
with the brand.

Keller’s (2001) CBBE pyramids should be used in

explaining how the target market perceives the chosen
brand
Keller’s (2001) CBBE pyramids
Subdimensions of Brand-Building Blocks
 CASES
Class 2: Mountain Man Brewery Case
Class 4: Dove
Class 7: 3M
Class 8: Gordon Ramsay Case  

ALL students are expected to read the case before the start of the class.

In asynchronous part you will prepare a small PowerPoint presentation about the
case

Case presentations should be limited to 10 minutes.

 CASES
 Apart from in class work, much of work for this course will be done outside
classes, individually and within teams (physically or online).
 The course material for these parts involves compulsory reading (case studies
from, journal articles).
 
ALL students are expected to read the materials assigned for each topic. This is very
important in order to effectively work in class. At the beginning of next class, groups
(randomly selected) will be asked to present their solution to the case. Case
presentations should be limited to 10 minutes. The non-presenting groups should
come up with a minimum of one question per group to stimulate class discussion.
Participation in presentations and class discussions will contribute to your
participation evaluation.
1. What is “Brand”?
What is Branding?
Rational or irrational?

perceptions created by brand

communications change
people’s taste experience
 Change in perception of taste

https://www.youtube.com/watch?v=DRa0OYsJ1BY
Can you recognize these brands?
 Branding origin
Brandr – from “Brandr”,
means to burn oneself into
or stigmatise.
Branding initially was used
on people, slaves captured
by Vikings as a way of
signally status and
ownership over conquered
peoples.
Also on animals
Burn oneself into
idea that is more
than just a logo, it’s
an assence.
Founders,
consumers, and
employees put their
heart and soul into
brands and do see
something of
themselves in them.
 Short potted history of branding
• Ancient period: proto-brands (marks of origin)
• Pre-20th century
– Trademarks (legal protection of symbolic things)
– Literal authenticity
• Pre-1950s
– STP (Segmentation, Targeting, Positioning) by P&G
– Brand management system (brands instead of products)
• Post 1950s
– Symbols for Sale (advertisement)
– Denotive-conative(from names, which denoted category to names, which
connoted ideas)
• 1980s onward - understanding value & power of brands:
– Brand Equity
– Consumer approaches
– Cultural approaches
Early brand advertisement
 Brand Management Influences
• Economics: efficiency
• Law: trademarks
• Psychology: behavior (individual)
• Anthropology & Sociology: behavior (social)
• Business studies: firm brand issues
• Media studies: communication
• Creative practice: identity and experience
 What is a brand?
 How do you understand it?
 Which aspects does it include?
Let’s see how the definition
developed…

What is missing?
 Brand Definitions
David Aaker

“A Brand is a distinguishing name and / or symbol

intended to identify the goods and services of
one seller and to differentiate those goods and
services from those of competitors.”
David Aaker “Building Strong Brands”
 Brand Definitions
American Marketing Association
(First)

“A name, term, design, symbol, or any other feature

that identifies one seller’s good or service as distinct
from those of other sellers. The legal term for brand
is trademark. A brand may identify one item, a
family of items, or all items of that seller. If used for
the firm as a whole, the preferred term is trade
name”
(AMA MK1)
 Brand Definitions
American Marketing Association
(Latest)

“A brand is a customer experience represented by a

collection of images and ideas; often, it refers to a symbol
such as a name, logo, slogan, and design scheme.
Brand recognition and other reactions are created by the
accumulation of experiences with the specific product or
service, both directly relating to its use, and through the
influence of advertising, design, and media commentary.”
 Brand Definitions
Seth Godin
“A brand is a set of expectations, memories, stories,
and relationships that, taken together, account for a
consumer’s decision to choose one product or
service over another. Measure of brand value
If the consumer (whether it’s a business, a buyer, a
voter or a donor) doesn’t pay a premium, make a
selection, or spread the word, then no brand value
exists for that consumer”

Creativity consultant
 Brand Definitions
Helen Edwards

“Brand = Product and/or service + values + associations.

This combination creates ‘meaning’ that people can
connect with at the level of identity and therefore the
relationship is beyond commercial.
In theory the values are ‘forever’ and embrace the
ideology, the product and/or service and associations can
change over time”.

Co-founder of Passionbrand, award winning independent journalist

 Brand Definitions
Marty Neumier

“A brand is a person’s gut feel about a product,

service, or company. It’s a GUT FEELING because
we’re all emotional, intuitive beings, despite our
best efforts to be rational. It’s a PERSON’S gut
feeling, because in the end the brand is defined
by individual’s, not by companies, markets, or the
so-called general public. Each person creates his
or her own version of it.”

Author on topics of brand, design, innovation, and creativity. Director of “Branding for Liquid” Agency
 Brand Definitions
Erminio Putignano

“Branding is an exercise in world-making. It’s about shaping

a worldview anchored in values, beliefs and promises and
bringing it to life through symbols, stories and experiences.
It is an act of narration and a conversation and it implies a
very active contribution from all parties involved –
everybody is involved in its generation and interpretation
(organisations, agencies, customers and the community at
large). If the worldview is convincing and relevant, then it is
able to change opinions and behaviours”.

Brand consultant
 Brand Definitions
Jeff Bezos

“What people say about you

when you aren’t in the room”
 Brand Definitions
Marie-Agnes Parmentier

“[A brand is] a repository of meanings fueled by a

combination of marketers’ intentions, consumers’
interpretations, and numerous sociocultural networks’
associations.”
 Brand Definitions
Michael Beverland, 2018

“An intangible symbolic marketplace resource, imbued

with meaning by stakeholders and the broader context
in which it is embedded that enables users to project
their identity goal(s) to one or more audiences”
 To sum up…
 What is branding?
 What is the difference between
marketing and branding?
Marketing
Branding
 Who shapes brand meaning?
Shifting the focus of Brand Management
from Top-down to Bottom-up approach
 Figure 1.1 Authors shaping brand meaning

Firms Users

Brand Brand
Stories Stories
Shared
Brand Meaning
Brand Brand
Stories Stories

Popular
Influencers
Culture

Source: Adapted from Holt (2003, p. 3)

 Shaping Brand Meaning

Firms Users

Brand Brand
Stories Stories
Shared
Brand Meaning
Brand Brand
Stories Stories

Popular
Influencers
Culture

Source: Adapted from Holt (2003, p.3)

 What can be branded?
 Branding Principles
• Brand meaning is co-created.
• Brand marketers matter!
• Context matters
• Co-creating serves latent (often social) needs
• Branding is about identity
• Brands are assets
• Brands drive everything we do

https://www.dropbox.com/s/yl9fvcfxaog3s1t/What%20is%20Branding-.mp4?dl=0
 Importance of Brands

“In a global economy based on commodity production,

a brand may be a company’s most important asset.
And brand management is an increasingly critical skill
for a growing number of businesses around the world.”
Business Week, Dec. 20, 2004, p. 116.)
2. Strong Brands
 What are STRONG brands to you?
 Give examples.
 What makes these brads strong?
 What is a good brand name?
 Good Brand Names:

No Bad
Foreign
Distinctive
Language
Meanings

Easy to
Suggest Suggest
Pronounce,
Product Product
Recognize,
Qualities Benefits
Remember
 Can you think some examples when
brand names were “Lost in translation”?
Brands Lost in Translation

Coors’ slogan ‘Turn it loose’ translated in

Spanish into ‘Suffer from diarrhea’
Brands Lost in Translation
Brands Lost in Translation
 Brand Names must:
• For consumers, brand names . . .
– Guarantee quality and consistency.
– Help to choose and buy efficiently.
– Signal that something is new.
– Add fun and interest to consumption.

Peter Brabeck, CEO Nestle:

“In technocratic and colorless times, brands bring warmth, familiarity, and
trust.”

• For companies, brand names offer long-term competitive advantage.

Brand examples: Bottled Water
Solan de Cabras Water

 Solan de Cabras water is an A-brand of

water.
 Solan de Cabras water is from a spring in
the Sierra Nevada, a mountain range in the
south of Spain.

 What price would you expect to pay for

Solan de Cabras water?
€ _______ for a 0,5 liter bottle
 Dia Water

 Dia water is a supermarket brand of water.

 Dia water is from a spring in the Sierra
Nevada, a mountain range in the south of
Spain.

 What price would you expect to pay for

Dia water?
€ _______ for a 0,5 liter bottle
Look at the dimensions and pick up
one that for you sits on either end of
the scale.
 Why?
 Brand Delivering Benefits
Customers Truly Desire

Strongly Strongly
Agree Disagree
 Benefits for customers
Brandz Top 75 UK Brands by Value #30
“When we look at the new entries, the
vast majority reflect almost where our
society is going,” Peter Walshe, BrandZ
global strategy director at Kantar
Millward Brown.
“It’s fascinating because you see a lot
of online stuff, the way convenience
food eating and drinking is really taking
off. You’ve got a lot of betting brands in
there – again, a reflection of our
entertainment and the way in which
we’re watching television and betting
on our phones.”
“For us to become the food app, we’ve created a community to champion
customers, restaurants and the vibrant takeaway sector, we’ve built our business
in having the widest choice available on our platform. That’s how we’ve built our
brand too.” Ben Carter, UK Marketing Manager
 Brand Stays Relevant

Relevance is about the brand’s present value – the

more relevance, the more forward momentum the
brand has.

Strongly Strongly
Agree Disagree
 Brand Stays Relevant

Asos (19) The top three fastest growing UK brands are life insurance company
Prudential (40%), Dyson (31%) and Asos (31%) – with the top 10 risers
together worth as much as the remaining 65.

“They are perceived to be healthier and more innovative brands, scoring better
than the others on metrics such as purpose, experience, brand love, ‘shaking
things up’ and ‘leading the way’.” (Brandz, 2018)
 Brand is Properly Positioned

Positioning is critical to branding

Strongly Strongly
Agree Disagree
Sarah Warman, BrewDog’s vice-president of brand strategy.
“Our mission has always been crystal clear, to make other people as passionate about
craft beer as we are. We’re obsessed with two things; our beer and our people.
Our commitment to both will always drive us to come up with new ideas and continue
the craft beer revolution to bring great beer to more people across the planet.”
Brandz UK 65
 Brand is Consistent

Consistency is critical to brand equity, brands must stand for

something and reinforce that over time

Strongly Strongly
Agree Disagree
 Brand is Consistent

Dyson has consistently improve on household products by using

uptodate materials and new patents, positioning competitors as lazy
and lacking in innovation, trying to sell the same poor quality
technology based on patents from decades ago
 Brand Managers Understand what the
Brand Means to Consumers
Managers understand exactly what the brand means to customers, which
may be different to what they intended. Being able to really get the
customer relationship is critical for managers and suggests the spend a
lot of time in the field tracking conversations

Strongly Strongly
Agree Disagree
 Brand Means to Consumers

Lovehoney mainstreamed sex toys in the UK and built a £300million a year.

They understood that sex was natural but subject to taboos, so they got rid off the
image of the porn industry and focused on sexual health and wellness, not being
judgmental about people’s practices.
3. Brand Equity
What is Brand Equity?
 What is brand equity

Brand equity is the value added to the

functional product or service
by associating it with the brand name
(Aaker 1991)

75
 Brand Equity: 3 Approaches

1. Customer Based Brand Equity (CBBE)

2. Company (Financial) Brand Equity
3. Employer Brand Equity
 Customer-based Brand Equity (CBBE)

 Differential effect that brand knowledge has on

consumer response to the marketing of that
brand

 The more you know about the brand and the

more you like that, the more likely you are to
respond to its marketing in the ways intended
The Brand is in the Mind of the Customer

 What do I know about it?

 What do I feel towards it?

 What was it like to use?

 Customer-based Brand Equity
Brand Knowledge

• Buyers know brands from . . .

– brand elements like names, symbols, logos, and
slogans.
– marketing programs such as product features,
design, and benefits; prices; retail outlets; and
communications.
– secondary elements like company name, country of
origin, owner/user characteristics, and endorsers.
– personal consumption experiences.
 Customer-based Brand Equity
Brand Associations

• Brand associations depend on brand awareness and

memory.
• Brand associations should be strong, favorable, and
unique.
• Brand associations come from marketing
communications and from buyers’ direct experiences.
 CBBE Framework

Non-Product-Related
Brand
(e.g., Price, Packaging,
Recognition User and Usage Imagery)
Brand
Awareness
Brand Attributes
Recall Product-Related
(e.g., color, size,
design features)
Brand
Knowledge
Types of
Brand Associations Benefits Functional
Brand
Image Symbolic
Favorability,
Overall
Strength, and
Evaluation Experiential
Uniqueness of
(Attitude)
Brand Association
Brand Mea
n ing
 Watch a video of “Whopper Freakout”
 Apply this case to it to the CCBE framework.

https://www.youtube.com/watch?v=IhF6Kr4ITNQ
 Keller: Brand Equity & Brand Awareness
Brand Becomes Commoditised!

TOP
OF MIND
ce AWARENESS • First Mentioned

BRAND RECALL
en
ali

• Unaided Recall
dS
an

BRAND RECOGNITION
Br

• Aided Recall
•

Unaware
 Customer-Based Brand Equity (CBBE)
model
Building strong brand involves 4 steps:
1. Brand identity (who is it) - establishing brand awareness
2. Brand meaning – associations “what does it stand for”
3. Brand response - eliciting positive brand responses
4. Loyalty - forming sustainable brand relationships
Keller’s (2001) CBBE pyramids
 Customer-Based Brand Equity (CBBE)
model
• Achieving those 4 steps involves 6 brand-building
blocks:
- Brand salience
- Brand Performance
- Brand Imagery
- Consumer Judgments
- Consumer Feelings
- Brand Resonance
Customer-Based Brand Equity Pyramid

• Loyalty
• Attachment
You & me • Community
• Engagement

How do • User profiles

How you make
good are you? me feel? • Purchase and usage
situations
• Personality and values
What are your What’s your • History, heritage, and
features? story?
experiences

Category Identification; Needs Satisfied

 Ultimate Goal: Brand Resonance

• Most valuable (high loyalty and price premiums),

occurs when all other brand building blocks are
established

• 4 parts:
– Behavioral loyalty
– Attitudinal attachment
– Sense of community
– Active engagement
 Brand Resonance
Behavioral loyalty
• Repeat purchases
• How much and how often do consumers buy your
product
– In absolute terms and relative to product of
competitor

NB!
• Be aware of inertia
• Can be due to pure functional reasons
– E.g., best accessible, only affordable, etc…
 Brand Resonance
Attitudinal attachment
• Strong positive attitude towards the brand
• ‘Love’ the brand
 Brand Resonance
Sense of community

• Identification with a brand community

• Feeling of belonging to other people associated with

the brand
Strong Brand Community: Harley-Davidson

https://www.youtube.com/watch?v=imN_lT_K-hs
 Give examples of brands with strong
communities?
 Do you belong to any brand community?
Other Brand Communities
 Brand Resonance
Active engagement
• Consumers willing to invest time, energy, money or other
resources into brand beyond those expended during purchase
or consumption of brand

• Examples: join club, receive updates, visit website, participate in

chat rooms

• Consumers become brand ambassadors

• Requirement: strong attitudinal attachment and/or sense of

community
 CBBE- $$$$$?

 United Airlines Breaks Guitars, Loses

$180 Million After Canadian singer Dave
Carroll takes his story to YouTube

 United Airlines lost $250 million of its

market value after showing a passenger
being forcibly dragged off an overbooked
flight in 2017.
 How does customer-based BE
translates into company-based BE?
 What do all the measures mean for the
company?
 Company-based Brand Equity (CBBE)
 Differential effect of the brand on the balance sheet of
owner
 Brand equity is the asset value of a brand.
 It is based on net present value (NPV) of cash flows
associated with the brand:

NPV = Σ Casht[1/(1+k)]t
t = time period,
Casht = net cash flow for time period t
k = cost of capital (interest rate)
Strong Brand Equity at P&G
 Employer Brand Equity
Differential effect of the brand on
current / potential employees
 Employer Brand
• The principle of brand equity…
• …turned internally toward employees
• Potential Employee
– Brand Awareness
– (Anticipated) Brand Associations
• Current Employee
– Brand Associations
– Your Brand – Employer = ????
• Increasing focus with HR to manage, monitor & improve
Employer Brand
 Employer Brand
Rewards and Benefits
• Fair Payment
• Fair Hours
• On site services and extras
• Employee care
 Employer Brand
Culture and Work Environment
• Diversity and inclusion,
• Organizational culture,
• Using employee feedback to make
improvements,
• Quality of physical work environment
 Employer Brand
Leadership and development
• Flexibility
• Tailored career paths
• Performance management
• Quality of leadership
• Talent management
• Teamwork
 Summary
• Brand Equity is a measure of whether the brand makes a
difference to an audience.
• Strong brand relationships are predicted to result in higher
brand value.
• Brand equity is built over time, via consistency and relevance.
• Different brand authors have different ways of judging brand
equity.
• Firms that build brand equity ensure the brand drives all their
activities.
 Benefits of Brand Equity
• Greater customer loyalty
• Less harmed by competitive actions
• Higher profit margins
• More inelastic buyer responses to price increases;
more elastic buyer responses to price decreases
• Increased efficiency and effectiveness of marketing
communications
• Higher possibility of successful brand extensions
 For the next class:
Readings:
Check the Course Book for the references

Prepare 10 key points from any of the paper you red to briefly
share in class.

Case:
Mountain Man Brewing Company Case. Prepare a small
presentation to answer the questions (check the Course Book).