Chapter 9 Creating Brand Equity

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Chapter 9Creating Brand Equity

• Brand Equity added _____ endowed to products and
  services - value is reflected in how we think,
  feel and act with respect to the brand, as well
  as the prices, market share, and profitability
  that the brand commands for the firm.
• Value to customer interpretation/processing of
  information, confidence in purchase decision, use
  satisfaction www.littletikes.com
• Value to firm marketing programs, brand loyalty,
  prices/margins, brand extensions, trade leverage,
  competitive advantage

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Brand Equity Implications

• Trade leverage in bargaining with retailers
  because customers expect them to carry the brand
• Company can charge ______ price because brand has
  higher perceived quality
• Easier to launch extensions because brand name
  carries high ___________________
• Brand offers defense against price competition

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Building Brand Equity (p. 281)

• Brand elements trademarkable devices that serve
  to identify and differentiate the brand.
• Developing Brand Elements (p. 282)
• What images come to mind?
• How easily is the name pronounced?
• How well is the name remembered?
• Which names are preferred?

4
Building Brand Equity

• Designing Holistic Marketing Activities (p. 284)
• Customers come to know a brand through a range of
  contacts and touch points personal observation
  and use, word of mouth, interactions with company
  personnel, online or telephone experiences, and
  payment transactions.
• Application

5
Devising a Branding Strategy

• Brand extension established brand name is used
  to launch new products
• Honda
• Advantages Consumers have positive expectations
  of brand reduced costs introducing a new name,
  creating awareness of brand and new product,
  packaging and labeling, etc.

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Devising a Branding Strategy

• Disadvantages of brand extensions brand name may
  not be as strongly identified with any one
  product Cadbury chocolates and candy,
• Cannibalization customers switch to the
  extended brand from the parent brand

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Crafting the Brand Positioning(Chapter 10)

• Positioning act of designing the companys
  offering and image to occupy a distinctive place
  in the mind of the target market

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Points of Parity and Points of Difference (p. 312)

• Points-of-Difference attributes or benefits
  consumers strongly associate with a brand,
  positively evaluate, and believe that they could
  not find to the same extent with a competitive
  brand
• Points-of-Parity associations that are not
  necessarily unique to a brand but may in fact be
  shared with other brands all travel agencies
  must be able to make air and hotel reservations,

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Points of Parity and Points of Difference

• Challenge
• To achieve a point of parity on a particular
  attribute or benefit, a sufficient number of
  customers must believe that the brand is good
  enough on that dimension. http//www.hyundaiusa.c
  om/
• With points of difference, the brand must
  demonstrate clear superiority

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Choosing POPs and PODs (p. 315)

1. Relevance target customers must find the POD
   personally relevant and important
2. Distinctiveness target customers must find the
   POD distinctive and superior
3. Believability target customers must find the
   POD believable and credible
4. Feasibility the firm must be able to actually
   create the POD
5. Communicability consumers must be given a
   compelling reason and understandable rationale as
   to why the brand can deliver the desired benefit
6. Sustainability can the favorability of a brand
   association be reinforced and strengthened over
   time?

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Adding Further Differentiation

• Differentiation adding a set of meaningful and
  _______ differences to distinguish the companys
  offering from the competitors offerings

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Adding Further Differentiation

• Meaningful or worthwhile differentiation
• Criteria
• Important highly valued
• Distinctive delivered in a distinctive way
• Superior superior to other ways of obtaining
  the benefit
• Preemptive cannot easily be copied by
  competitors
• Affordable buyer can afford to pay the
  difference
• Profitable company will find it profitable to
  introduce the difference google.com

13
Sales and Product Life Cycles (p. 332)

• Introduction - slow sales growth high cost per
  customer technological problems, recover RD
• Create product awareness and trial
  samples/coupons to induce trial offer a basic
  product
• Growth rapidly rising sales rising profits
  growing number of competitors
• Maximize market share offer product extensions,
  service, warranty

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Sales and Product Life Cycles

• Maturity peak sales profits stabilize or
  decline because of increased competition
• Maximize profit while defending market share
  diversify brands and items models (diet cola)
• Decline declining sales declining profits
• Reduce expenditure and milk the brand

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Sales and Product Life Cycles

• Implications
• Different products have different life spans
• Anticipate differences in sales over time and
  develop appropriate strategies

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Sales and Product Life Cycles

• Time Time