Faculty of Management Sciences

Department of Marketing and Logistics

Prof Stewart Kaupa

13 AUGUST 2022
 CHAPTER TWO

CUSTOMER-BASED EQUITY AND

BRAND POSITIONING
 Defining Customer Based Brand Equity
(CBBE)
• Approaches brand equity from the perspective
of the consumer
• 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’s response to the marketing of
that brand.
 Brand Equity as a Bridge
• Brand as a Reflection of the Past

• Brand as a Direction for the Future

 Brand Equity as a Bridge
• Consumers perception of the brand plays a key
role in determining the worth of the brand
• Brand equity offers guidance to interpret past
marketing performance and design future
marketing programs
• Other factors that influence brand success and
equity are:
• Employees, suppliers, and channel members
• Media and government
 Key to create brand equity
• 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
Sources of Brand Equity

Brand Awareness

Brand Image
 Sources of Brand Equity
• 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.
 Sources of Brand Equity
• 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
 Advantages of brand awareness
• Learning advantages
• Consideration advantages
• Choice advantages
• The elaboration- likelihood model
• Consumer purchase motivation
• Consumer purchase ability
 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.
 Brand image
• 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
 Brand Image
• More deeply a person thinks about product
Strength of Brand information and relates it to existing brand
Associations knowledge, stronger is the resulting brand
association

• Is higher when a brand possesses relevant

Favorability of
attributes and benefits that satisfy
Brand Associations consumer needs and wants

• “Unique selling proposition” of the product

Uniqueness of • Provides brands with sustainable
Brand Associations competitive advantage
• To create brand equity, marketers should:
• Create favorable consumer response i.e. brand
awareness
• Create positive brand image through brand
associations that are strong, favorable, and
unique
 Identifying and Establishing Brand
Positioning
• Points-of-Parity and Points-of-Difference
• Basic Concepts
• Target Market
• Nature of Competition
 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
 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
 Defining and communicating the
competitive frame of reference
• Communicating category benefits - Marketers use
product benefits to announce category
membership.
• 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 points- of-difference
• Desirability criteria
• Deliverability criteria
• Feasibility
• Communicability
• Differentiating criteria
Establishing points-of-parity and points-of-difference

• 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.
• Disadvantage - If the points-of-parity and points-of-
difference with respect to both categories are not
credible, consumers may not view the brand as a
legitimate player in either category
 Updating positions overtime
• Laddering
• Once the target market attains a basic
understanding of how the brand relates to
alternatives in the same category, it may be
necessary to deepen the meanings associated
with the brand positioning.
• Failure to move up the ladder may reduce the
strategic alternatives available to a brand.
• Go on the offensive
 Reacting
• Reacting
• When a competitor challenges an existing POD
or attempts to overcome a POP, there are
essentially two main options for the target
brand:
• Do nothing.
• Go on the defensive.
 To Sum up…
• To appropriately position a brand, marketers
should:
• Identify their target customers
• Analyze the type of competition they might
face in the identified market base
• Identify product features and associations that
are different or similar to their competitors
 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

 Brand Mantra
• Implementing a Brand Mantra
• Designing a Brand Mantra
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.
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.
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
 To Sum up ...
 Brand positioning describes how a brand can
effectively compete against a specified set of
competitors
 A good product positioning should:
 Have a “foot in the present” and a “foot in the future”
 Identify all relevant points-of-parity
 Reflect a consumer point of view in terms of the
benefits that consumers derive
 Contain points-of-difference and points-of-parity that
appeal both to the “head” and the “heart”
 To Sum up...
• A good brand mantra should:
– Communicate the category of the business
to set the brand boundaries and clarify
what is unique about the brand
– Be simple, crisp, and vivid
– Stake out ground that is personally
meaningful and relevant to as many
employees as possible
• END OF CHAPTER TWO
Faculty of Management Sciences
Department of Marketing and Logistics

Thank You