10 Creating Brand Equity

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Creating Brand EquityCreating Brand EquityCreating Brand EquityCreating Brand Equity

Philip KotlerPhilip Kotler

Chapter 10Chapter 10


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What is Brand Equity Brand (American Marketing

Association): A brand is a name, term,

sign, symbol or design or combinationof them. Intended to identify the goods

or services of one seller or group of

sellers and to differentiate them fromthose of competitors


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What is Brand Equity Brand adds dimensions that differentiate it in

some way from other products or servicesdesigned to satisfy the same need.

Differences could be functional, rational ortangible- related to product performance ofthe brand

It could also be more symbolic, emotional orintangible- related to what brand represents


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What is Brand Equity Brand identifies the

Source or Maker of the product

Assign responsibility to a particular manufacturer

or distributor Consumers learn about brands through past

experiences and its marketing programme

Brand simplifies decision making and reducerisk. Brand reduces time and complicationsof customers


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What is Brand Equity Brands simplify product handling or tracing

Brands helps to organize inventory and

accounting records Brands offer legal protection for unique

features or aspect of the product

Brand names can be protected through

registered trade marks, patents,, copyrights,

intellectual property rights


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What is Brand Equity Brand signal a certain level of quality

Brand provides predictability and security ofdemand

Brand creates barriers to entry Brand creates loyalty and translates into a

willingness to pay a higher price often 20 to25% more

Brand works as a competitive advantage Brand is a legal property


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The Scope of Branding Branding is endowing products and services

with the power of brand

Branding is creating difference Branding is teaching consumers

who the product is-by giving it a name and using

brand elements to help identify it

what the product does

why consumer should care


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The Scope of Branding Branding involves creating mental structures and

helping consumers organize their knowledge aboutproduct and services in a way that clarifies theirdecision making and in the process provides value tothe firm

Consumers must be convinced that there aremeaningful differences among brands.

Branding can be applied to anywhere Physical goods

Services Stores

Persons

Places

Organizations

Ideas


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Brand Equity Brand equity is the added value endowed to product

and services

This value may be reflected in how consumer think,

feel and act with respect to brand as well as prices,market share and profitability that the brandcommands

Brand equity is an intangible asset that haspsychological and financial value to the firm

Consumer-based brand equity can be defined as thedifferential effect that brand knowledge has onconsumer response to the marketing of the brand


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Marketing Advantages of Strong Brands

Improved perception of Product performance Greater loyalty

Less vulnerability to competitive marketing actions

Less vulnerability to marketing crises

Larger margins More inelastic consumer response to price increases

Greater trade cooperation and support

Increased marketing communication effectiveness

Possible licensing opportunities Additional brand extension opportunities


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Brand Equity Positive customer based brand equity:

when consumers react more favorably

to a marketing activity Negative customer based brand

equity: when consumer react less

favorably to a marketing activity


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Brand Equity Brand knowledge: consists of all the

thoughts, feelings, images,

experiences, beliefs and so on thatbecomes associated with the brand.

Valvo: Safety


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Worlds strongest Brands share

10 important attributes

The Brands excels at delivering the benefits the consumerstruly desire

The brand stays relevant

The pricing strategy is based on consumer perception ofvalue

The brand is consistent

The brand portfolio and hierarchy makes sense

The brand makes use of and coordinates a full repertoire ofmarketing activities to build equity

The brand managers understand what the brand means to

consumers The brand is given proper, sustainable support

The company monitors sources of brand equity


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Brand Equity Models


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Building Brand Equity


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Measuring Brand Equity


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Managing Brand Equity


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Devising Branding

Strategy A branding strategy for a firm reflects the no

and nature of common and distinctive brandelements applied to the different products

sold by the firm The decision as to how It can develop ne brand elements for the new

products

It can apply some of its existing brand elements

It can use a combiunation of new and existingbrand elements


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Devising Branding

Strategy Brand Extension: When firm ises an

established brand to introduce a nw product,

it is called Brand Extension

Ex: Kingfisher Airlines

Sub-brand: When brand is combined with an

existing brand, the brand-extension can also

be called as sub-brand Ex: Amul Masti Dahi, Maruti-Swift


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Devising Branding

Strategy Parent Brand: An existing brand that

gives birth to a brand extension is

referred to as Parent Brand Family Brand: If the brand is already

associated with multiple products

through brand extension then it may becalled as family brand


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Devising Branding

Strategy Brand Extension classification

Line extension: The parent brand is used to brand a new productthat targets a new market segment within a product categorycurrently served by the parent brand, such as through new newflavors, forms, colours, added ingredients and sizes

Lifebuoy Active Red Lifebuoy Active Orange

Lifebuoy International Plus

Lifebuoy International Gold

Category Extension: The parent brand is used to enter a differentproduct category from currently served by the parent brand

Honda: Cars

Honda: Motorcycles Honda: Generators

Honda: Marine Engines

Kingfisher: Beer

Kingfisher: Airlines


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Devising Branding

Strategy Brand Line: consists of all products- original

as well as line and category extensions- sold

under a particular brand.

Brand Mix: (Or brand assortment) is the set

of all brand lines that a particular seller

makes available to buyers

Brand variant: are specific brand linessupplied to specific retailers or distribution

channels. These results from the pressure

retailers put on manufacturers to provide

distinctive offerings.


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Devising Branding

Strategy Licensed product is one whose brand

name has been licensed to other

manufacturers who actually make theproduct


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10 Creating Brand Equity