Chapter three

Customer Based Brand Equity

CBBE concept is that the power of a brand lies in what

customers have learned, felt, seen, and heard about the
brand as a result of their experiences over time.
In other words, the power of a brand lies in what
resides in the minds and hearts of customers.
 cont.,d
 CBBE as the differential effect that brand knowledge has on
consumer response to the marketing of that brand.
 A brand has positive CBBE when consumers react more
favorably, high level of awareness, familiar with the brand,
less sensitive to price increase, strong and unique brand
association in memory.
 On the other hand a brand is said to have negative CBBE
if consumers react less favorably to marketing activity for
the brand.

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 cont.,d
Marketing Advantages of CBBE

Greater loyalty - feel great loyalty to the brand

Less vulnerable to competition - consumers have valued these

brands and stick with them and reject the other competitors,
creating steady revenue for the firms.
Higher margins.(Inelastic to price increases and Elastic to

price decreases)
Licensing opportunities- firm may choose to license its name,
logo, or other trade mark item to other company for use on
their products and merchandize.
Brand extension opportunities- when a firm uses an
established brand name to enter a new market.
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 Cont’d….
MAKING A BRAND STRONG; BRAND KNOWLEDGE
Brand knowledge is the key to creating brand equity, because
it creates the differential effect that drives brand equity.
Brand knowledge refers to the thoughts, feelings,
experiences, become associated of a customer with a
business’s brand or a company. Brand knowledge is developed
due to interactions in the form of advertisements,
communication.
Brand knowledge as having two components: brand
awareness and brand image.
Brand awareness refers to customers’ability recall and
recognize the brand under different conditions and to link
the brand name, logo, symbol, and so forth to certain
associations in memory.
Brand awareness is defined as the degree to which 10-4
 Cont’d….
Brand recognition is consumers’ ability to confirm prior
exposure to the brand when given the brand as a cue.
Familiarity of brand with past exposure
Brand recall refers to the ability of the consumers to
correctly generate and retrieve the brand in their memory.
Advantages of brand awareness.
Learning Advantages: it influences the formation and
strength of the associations that make up the brand image.
It easier people learn about the brand and the better
the brand is registered in the mind.
Consideration Advantages: it is important that
consumers think of and consider the brand whenever they
are making a purchase for which the brand

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 Cont’d….
o Choice advantage; brand awareness can affect choice
among brands in the consideration set,
o Increase customer loyalty:
o lowers your customer acquisition costs:
o Establishes trust; Brand awareness assists a firm in
fostering consumer trust.
o Builds brand equity; Provide people with favorable
impressions and experiences.
o Brand image refer to more intangible aspects of the brand,
and consumers can form imagery associations directly from
their own experience. Or indirectly through advertising or by
some other source of information, such as word of mouth.

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 Cont’d
Brand image is consumers’ perceptions about a brand, as

reflected by the brand associations held in consumer memory.

Brand associations are the other informational nodes linked to
the brand node in memory and contain the meaning of the
brand for consumers.
E.g Apple computer; associate as creative, innovative and user
friendly

Brand attributes are those descriptive features that characterize

a product or service. Brand benefits are the personal value
and meaning that consumers attach to the product or service
attributes

Creating a positive brand image takes marketing programs that

link strong, favorable, and unique associations to the brand in
 Cont’d
BUILDING A STRONG BRAND:
THE FOUR STEPS OF BRAND BUILDING
The brand resonance model looks at building a brand as a
sequence of steps. The steps are a follows:
1. Ensure identification of the brand with customers and an
association of the brand in customers’ minds with a specific
product class, product benefit, or customer need.
2. Firmly establish the totality of brand meaning in the minds of
customers by strategically linking a host of tangible and
intangible brand associations.
3. Elicit the proper customer responses to the brand.
4. Convert brand responses to create brand resonance and an
intense, active loyalty relationshipbetween customers and the
brand.
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 Cont’d
These four steps represent a set of fundamental
questions that customers invariably ask about
brands. This set is the following one:

• Who are you? (brand identity)

• What are you? (brand meaning)

• What about you? What do I think or feel about you?

(brand responses)

• What about you and me? What kind of association and

how much of a connection would I like to have with you?
(brand relationships
 Cont’d
Brand Identity (Who are you?)
This is the first stage where you need to create brand
awareness. In this stage, people do not identify your brand and
cannot distinguish your brand from other brands.
Achieving the right brand identity means creating brand
salience with customers.
 Brand salience measures various aspects of the awareness of
the brand and how easily and often the brand is evoked under
various situations orcircumstances.
 Brand Meaning (What are you?)
to identify and communicate what your brand means, and
what it stands for.
it provide more information about the product to its users.
Consumers want to know more about the usage, the problems
that it can solve, how to use the product, etc.
 Cont’d..
 Brand meaning is made up of two major categories of brand
associations related to performance and imagery.
Brand performance describes how well the product or service
meets customers’ functional needs.
Many famous brands, such as Apple, Google, Bosch, etc. have
built great brand equity due to their extraordinary
performance.
Five important types of attributes and benefits often underlie
brand performance.
1. Primary ingredients & supplementary features: the primary
ingredients of the product operate (high, medium, or low).
2. Product reliability, durability, and serviceability:
Reliability refers to the consistency of performance over time and
from purchase to purchase. Durability is the expected economic
life of the product, and serviceability, the ease of repairing the
product if needed
 Cont’d..
Service effectiveness, efficiency, and empathy:
Service effectiveness measures how well the brand
satisfies customers’ service requirements.
Service efficiency describes the speed and
responsiveness of service. Service empathy is the extent to
which service providers are seen as trusting, caring, and
having the customer’s interests in mind.
Style and design: product that go beyond its functional
aspects to more aesthetic considerations such as its size,
shape, materials and color involved..
Price: it dictate how consumers categorize the price of
the brand and how firm or flexible that price is seen.
 Cont’d..
Brand Response (What about you?)

 Customers have a certain expectations from a brand, and

when it meets expectations, the customer is happy and
shows positive feelings.
Brand meaning is what helps produce brand responses, or what
customers think or feel about the brand. We can distinguish
brand responses as either brand judgments or brand feelings
 Brand judgments are customers’ personal opinions about and
evaluations of the brand, which consumers form by putting
together all the different brand performance and imagery
associations.
 Cont’d..
Brand quality- customer value and satisfaction
Brand credibility- refers to the extent to which the brand
perceived expertise, trustworthiness, and likability.
Brand superiority- brand as unique as and better than other
brands.
 Brand feelings are customers’ emotional responses and
reactions to the brand.
The following are six important types of brand-building
feelings.
Warmth: the brand makes consumers feel a sense of calm or
peacefulness.
Fun: upbeat types of feelings; the brand makes consumers
feel amused, lighthearted, joyous, playful, cheerful and so on.
 Cont’d..
 Excitement: the brand makes consumers feel energized and
feel that they are experiencing something special. consumers
feeling a sense of elation of “being alive”, being cool, sexy or
so on.
 Security: The brand produces feeling of safety, comfort, and
self-assurance
 Social approval: the brand result in consumers having positive
feelings about the reactions of others; that is consumers feel
that others look favorably on their appearance, behavior, and
so on.
 Self-respect: The brand makes consumers feel better;
consumers feel a sense of pride, accomplishment, or
fulfillment
 Cont’d..
 Brand Resonance (What about you and me?)
 This is the most difficult and most desirable stage is brand
resonance.
 Brand Resonance is the ultimate relationship and the level
of identification that customers have with the brand.
 You have achieved brand resonance when your customers feel
a deep, psychological bond that customer have with your and
brand and activity engendered by this loyalty (repeat purchase
rates
 Brand resonance can be broken down into four categories:
 Behavioral loyalty- is relates to repeat purchase or how often
do customers purchase a brand and how much do they
purchase.
 Cont’d..
Attitudinal attachment- To create resonance, there also
needs to be a strong personal attachment.
Your customers love your brand or your product, and
they see it as a special purchase.
Sense of community- the brand may feel customers a
kinship or affiliation with other people associated with
the brand.
 Active engagement: This is the strongest example of brand
loyalty. Customers are actively engaged with your brand,
even when they are not purchasing it or consuming it. This
could include joining a club related to the brand; participating
in online chats, marketing rallies, or events; following your
brand on social media; or taking part in other, outside
activities
 Brand and pdt mgt
Chapter Four
Brand positioning and value
Brand positioning: - is at the heart of marketing strategy. It is

the “act of designing the company’s offer and image so that it

occupies a distinct and valued place in the target customers
minds.
Good brand positioning helps guide marketing strategy by
clarifying what a brand is all about, how it is unique and how it is
similar to competitive brands, and why consumers should
purchase and use it.
Positioning is not what you do to a product but it’s what you do
to the mind of the prospect. It is how you differentiate your
 Cont’d..
 There are various positioning errors, such as-
 Under positioning- This is a scenario in which the customers
have a blurred and unclear idea of the brand.
 Over positioning- This is a scenario in which the customers
have too limited awareness or too narrow a view of the firm,
the product or the brand.
 For example, buyers think that Apple only comes out with
expensive products where Apple has a range of products at
different prices.
 Confused positioning- This is a scenario in which the
customers have a confused opinion of the brand
 Double Positioning- This is a scenario in which customers do
not accept the claims of a brand.
 There are situations where the buyer finds it extremely difficult
to believe the claims made by the brand given the price, product
features or the manufacturer.
 Cont’d..
Positioning REQUIERS:
Determining frame of reference (Who the Target
Consumers are and Who your main competitors are)
Identify points-of- parity and points-of- difference
Frame of Reference
Frame of reference can be closely linked to target
market decisions and identifying competitors.
Target market
 Identifying the consumer target is important because
different consumers may have different brand knowledge
structures and thus different perceptions and
preferences for the brand.
 Cont’d..
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.
There are 2 ways to segment
Descriptive: characteristics or customer-oriented (related to
what kind of person or organization is the customer).
Includes: age, income, Sex, Race, and Family.
Behavioral: grouped or product-oriented (by how individuals in
the market perceive or use the product). Includes: user
status, Usage rate, Usage occasion, Brand loyalty and
benefit sought.
Four main segments:
Sensory: Seeking flavor and product appearance
Sociable: Seeking brightness of teeth
Worriers: Seeking decay prevention
 Cont’d..
 Base for segmenting consumer market
Behavioral
 User status, Usage rate, Usage rate, Brand loyalty and
Benefits sought
Demographic
 Sex, Income, Age, Race
 Psychographic Values, opinions, and attitudes and
Activities and lifestyle
Geographic
 International, Regional
Business-to-Business Segmentation
Bases
 Geographic purchasing approach
 Operating variables power structure
 Cont’d..
 Nature of Competition
 Identifying competitor is a good starting point in defining
frame of reference. Deciding to target a certain type of
consumer often defines the nature of competition.
 Indirect Competition.
 Indirect competition, also known as substitutes, is when two
or more businesses offer different products or services and
compete for the same market to satisfy the same customer.
 For instance, a food vendor offering baked bread for sale is
an indirect competitor of one selling chicken tenders.
 They both serve customers who want food even though they
sell different products.
 One lesson stressed by many marketing strategists is not to
define competition too narrowly.
 Cont’d..
 Points-of-Parity and Points-of-Difference
 Arriving at the proper positioning requires establishing the
correct points-of-difference and points-of-parity association
 Points-of-Difference Associations. (PODs) are formally
defined as attributes or benefits that consumers strongly
associate with a brand, positively evaluate, and believe that
they could not find to the same extent with a competitive
brand.
 POD can be classified in to either Attribute Based (Functional,
performance related differences) or Image Based (Affective,
experiential, brand image related differences).
 Consumers’ actual brand choices often depend on the perceived
uniqueness of brand associations.
 Many top brands attempt to create a point-of-difference on
“overall superior quality,” whereas other firms become the
“low-cost provider” of a product or service.
 Cont’d..
 POP are not necessarily unique to the brand but may in fact be
shared with other brands.
There are three types: category, competitive, and correlational.
 Category point of parity means that the brand offers
necessary category features. Thus, consumers might not
consider a bank truly a “bank” unless it offered a range of
checking and savings plans; provided safety deposit boxes,
traveler’s checks, and other such services; and had convenient
hours and automated teller machines
 Competitive points-of-parity are those associations
designed to negate competitors’ points-of- difference. They are
associations designed to overcome the perceived weakness of
the brand. Adding components that will negate the points of
difference of the competitors.
 Cont’d..
 Correlational points-of-parity are those potentially negative
associations that arise from the existence of other.
 For example, consumers might find it hard to believe a brand is
“inexpensive” and at the same time “of the highest quality.
cheap, is not good quality.
 There is a "zone" or "range of tolerance or acceptance" with
points-of-parity.
 POSITIONING GUIDELINES
 Two key issues in arriving at the optimal competitive brand
positioning are.
 Defining and communicating the competitive frame of
reference and
 Choosing and establishing points of-parity and points-of-
difference.
 
 Cont’d..
 Defining and Communicating the Competitive Frame
of Reference.
 A starting point in defining a competitive frame of reference
for a brand positioning is to determine category membership.
With which products or sets of products does the brand
compete?
 For example, consumers may be aware that Sony produces
computers, but they may not be certain whether Sony Vaio
computers are in the same “class” as Dell, HP, and Lenovo.
 The preferred approach to positioning is to inform consumers
of a brand’s membership before stating its point-of-difference
in relationship to other category members.
 There are three main ways to convey a brand’s category
membership: communicating category benefits, comparing to
exemplars, and relying on a product descriptor
 Cont’d..
 Communicating Category Benefits. To reassure
consumers that a brand will deliver on the fundamental
reason for using a category, marketers frequently use
benefits to announce category membership. Performance
and imagery associations can provide supporting
evidence.
 Exemplars. Well-known, noteworthy brands in a
category can also be used as exemplars to specify a
brand’s category membership.
 Product Descriptor. The product descriptor that follows
the brand name is often a very compact means of
conveying category origin
 Choosing pop and poD
In choosing points-of-difference, three important
considerations are that consumers find the POD desirable
and that the firm has the capabilities to deliver on the
POD and differentiating.

There are three key consumer desirability criteria for PODs.

1. Relevance. Target consumers must find the POD

personally relevant and important.

2. Distinctiveness. Target consumers must find the POD

distinctive and superior.

3. Believability. Target consumers must find the POD

believable and credible.
 Cont’d..
There are three key deliverability criteria.
1. Feasibility. The firm must be able to actually create
the POD. The product design and marketing offering must
support the desired association.
2. Communicability: It is very difficult to create an
association that is not consistent with existing consumer
knowledge or that consumers, for whatever reason, have
trouble believing.
3. Sustainability: Is the positioning preemptive,
defensible, and difficult to attack? Can the favorability of
a brand association be reinforced and strengthened over
time? If yes, the positioning is likely to be enduring.
 Cont’d..
 Establishing Points-of-Parity and Points-of-Difference
The key to branding success is to establish both points-of-parity
and points-of-difference.
 In creating both POPs and PODs, one of the challenges in
positioning is the inverse relationships that may exist in the
minds of many consumers.
Several additional ways exist to address the problem of negatively
correlated POPs and PODs.
 Separate the Attributes. An expensive but sometimes effective
approach is to launch two different marketing campaigns, each
devoted to a different brand attribute or benefit.
 Leverage Equity of Another Entity. Brands can link themselves to
any kind of entity that possesses the right kind of equity—a
person, other brand, event.
 Redefine the Relationship. to convince them that in fact the
relationship is positive
 Cont’d..
Defining and establishing brand values
 Developing a strong positioning and building brand
resonance are crucial marketing goals.
 The brand value chain is a structured approach to
assessing the sources and outcomes of brand equity and
the manner by which marketing activities create brand
value.
 It provides different types of information for brand
managers, chief marketing officers, managing directors,
The brand value creation process begins;
1. when the firm invests in a marketing program targeting actual
or potential customers
2. Asses the marketing activity that affects the customer mind-set
—what customers know and feel about the brand.
3. Asses the brand’s performance in the marketplace—how much
and when customers purchase, the price that they pay…
 Cont’d..
1.4. an assessment of shareholder value in general and a value of
the brand in particular..
Marketing Program Investment. Any marketing program
investment that can contribute to brand value development,
intentionally.
Marketing activities, like product research, development, and
design; trade or intermediary support; marketing communications
including advertising, promotion, sponsorship, direct and interactive
marketing, personal selling, publicity, and public relations; and
employee training.

Program Quality Multiplier. The ability of the marketing program

to affect the customer mind-set will depend on its quality .
 Cont’d..
key considerations is through the acronym DRIVE, as
follows:
 Distinctiveness: How unique is the marketing program? How
creative or differentiating is it?
 Relevance: How meaningful is the marketing program to
customers?
 Integrated: How well integrated is the marketing program at
one point in time and over time
 Value: How much short-run and long-run value does the
marketing program create? Will it profitably drive sales in the
short run? Will it build brand equity in the long run?
 Excellence: Is the individual marketing activity designed to
satisfy the highest standards?
Ethiopia will prevail!!!
Thank you!!! Peace for all!!!

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