2/8/18

CBBE & Brand Positioning

CHAPTER:2 Learning Objectives:

CUSTOMER-BASED EQUITY AND BRAND 1. Define CBBE
POSITIONING 2. Outline the sources and outcomes of CBBE
3. Identify the four components of brand positioning
4. Describe the guidelines in developing a good
brand positioning
5. Explain brand mantra and how it should be
developed

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Strategic Brand Management Identifying and Developing Brand

Process Plans

Identifying and Developing Brand Plans Brand Positioning Model

Describes how to guide integrated marketing to maximize
competitive advantages.
Designing and Implementing Brand Marketing
Programs Brand Resonance Model
Describes how to create intense, activity loyalty relationships with
Measuring and Interpreting Brand Performance customers.

Brand Value Chain

Growing and Sustaining Brand Equity Means to trace the value creation process for brands, to better
understand the financial impact of brand marketing expenditures
and investments.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Defining Customer Based Brand Equity

Customer-Based Brand Equity
(CBBE)
¨ Approaches brand equity from the perspective of
the consumer
¨ Stresses that the power of a brand lies in what

Defining Customer-Based Brand Equity - resides in the minds and hearts of customers
- customers have learned, felt, seen and heard
Brand Equity as a Bridge about the brand as a result of their experiences
over time.
¨ Differential effect that brand knowledge has on
consumer response to the marketing of that brand
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

1
 2/8/18

Defining Customer Based Brand Defining Customer Based Brand

Equity (CBBE) Equity (CBBE)
• Positive customer-based • Negative customer-based
brand equity - When brand equity - When
consumers react more consumers react less
favorably to a product and favorably to marketing
the way it is marketed when activity for the brand
the brand is identified than compared with an unnamed
when it is not. or fictitiously named version
of the product.

Vs.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Defining Customer Based Brand Defining Customer Based Brand Equity

Equity (CBBE) (CBBE)
Results in
Positive Consumers being Less sensitive to More willing
customer- more accepting price increases to seek brand
based BE of a new brand and withdrawal in a new
extension of advertising distribution
effort channel

Own brand Competitors brand

Consumers react less favorably to marketing activity for the brand

compared to the competitor brand

Negative customer-based BE
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Defining Customer Based Brand Figure 2.1- Marketing Advantages of

Equity (CBBE) Strong Brands
The three key ingredients of CBBE:
¨ Differential effect
¤ Differences in consumer response
¨ Brand knowledge
¤A result of consumers’ knowledge about the brand
¨ Consumer response to marketing
¤ Choice of a brand
¤ Recallof copy points from an ad
¤ Response to a sales promotion
¤ Evaluations of a proposed brand extension

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

2
 2/8/18

Brand Equity as a Bridge Brand as a reflection of the past

• Marketers should consider the money spent in brand
building as an “ investment”.
• On the basis of the past experience, what consumers
Brand as a Reflection of the Past saw, heard, learned, felt, and experienced about the
brand should be analyzed.
• The quality of the investment in brand building is the
Brand as a Direction for the Future
most critical factor, not the quantity.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Brand as a direction to the future To Sum up ...

• Brand knowledge that marketers create over time, ¨ Consumers perception of the brand plays a key role
which allows them to determine appropriate and in determining the worth of the brand
inappropriate future directions for the brand. ¨ Brand equity offers guidance to interpret past
• Brand equity offers focus and guidance, provides a marketing performance and design future
means to interpret past marketing performance and marketing programs
design future marketing programs. ¨ Other factors that influence brand success and
equity are:
¤ Employees, suppliers, and channel members
¤ Media and government

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Making a Brand Strong: Associative Network Memory

Brand Knowledge Model
¨ Brand knowledge is the key to creating brand Associative Network Memory Model

equity.
¨ Therefore marketers need to have an insightful way Considers memory as a

to represent how brand knowledge exists in the

consumer memory Network of

¨ An influential model naming Associative Network

Memory Model developed by psychologists is of Represents Nodes Connecting Represents
stored strength of
immense help to the marketer in this regard. information links
association
between
this
information
2.17
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

3
 2/8/18

Brand Associations Brand Associations

Possible Associations of Facebook

Associative Network Memory Model
BRAND
Friends Means of showing ¨ Views memory as a network of nodes and
how good my life is connecting links
¤ Nodes - Represent stored information or concepts
Information Image
¤ Links- Represent the strength of association between
the nodes
Facebook
Closeness
¨ Brand associations are informational nodes linked to
Sharing
the brand node in memory

Status Connectivity

Copyright © 2013 Pearson Education

Making a Brand Strong:

Sources of Brand Equity
Brand Knowledge
¨ Brand knowledge consists of a brand node in
memory with a variety of associations linked to it.
¤ Marketersneed an insightful way to represent how Brand Awareness
brand knowledge exists in consumer memory
¨ BK is the Key to create brand equity
¤ Creates the differential effect that drives brand equity
¨ Brand knowledge has two components: Brand Image
brand awareness and brand image.

2.23
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

4
 2/8/18

Possible Coca-Cola Association

Sources of Brand Equity
BRAND
Brand awareness is related to the strength of the brand node or
Refreshment Affordability
trace in memory, as reflected by the consumer’s ability to
identify the brand under certain condition.
Fun Cool
Brand awareness is a necessary, but not always sufficient, step in
building brand equity. Other considerations like brand image
come into play.
Coca-Cola
Accessibility
Taste
Brand image can be expressed as the perception about a brand
as reflected by the brand associations held in consumer memory.
Excitement Availability
Brand associations are the other information nodes linked to the
brand node in memory and contain the meaning of the brand for
consumers. Copyright © 2013 Pearson Education

Figure2.2 - Possible Apple Computer

Sources of Brand Equity
Associations Customer-based brand equity occurs when the consumer has a
high level of awareness and familiarity with the brand and holds
some strong, favorable and unique brand associations in
memory.
In low involvement decision setting--- brand awareness alone is
sufficient for----- more favorable consumer response

In high involvement decision setting--- the strength, favorability

and uniqueness of the brand associations play a critical role in ----
determining the differential response.

Therefore a brand should have some salient, unique associations

in order to get differential response from customer
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Sources of Brand Equity Sources of Brand Equity

Establishing a high level of ¨ Brand awareness
¤ Brand recognition
¤ Brand recall
Brand awareness Positive brand image
¨ Brand image
In ¤ Strong,
favorable, and unique brand associations
Consumers memory Examples include:
Luxurious Car = success, wealth, only the best
Produces 5 Star Hotel = Paradise fit for kings and queens
Sportswear = strong athletic body, no pain no gain, enhance your
The knowledge structure Different types of customer moves
that affect consumer based brand equity GenZ = A young aspiration generation, always connected, higher
response Copyright © 2013 Pearson Education economic freedom…… Copyright © 2013 Pearson Education

5
 2/8/18

Sources of Brand Equity Brand Awareness Advantages

Brand awareness consists of brand recognition and
brand recall performance. ¨ Learning advantages
¤ Register the brand in the minds of consumers
Brand recognition relates to the consumers ability to ¨ Consideration advantages
confirm prior exposure to the brand when given the brand
¤ Likelihood that the brand will be a member of the
as a cue.
consideration set
Brand recall relates to consumers ability to retrieve ¨ Choice advantages
the brand from memory when given the product category, ¤ Affect choices among brands in the consideration set
the needs fulfilled by the category, or a purchase or usage
situation as a cue.
For purchase decision made on store= B. Recognition is imp.
For purchase decision made outside= B. Recall is imp. 2.32
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Establishing Brand Awareness Establishing Brand Awareness

¨ increase familiarity through repeated ¨ use of shock advertising with bizarre

exposure (BRg) themes (BRg+c)
¨ visually or verbally reinforce the brand
name (BRc)

2.34
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Brand Image Brand Image

A positive Brand image is created by marketing programs that Strength of Brand Associations
link strong, favorable and unique associations to the brand in Association will vary in the strength of their connection
memory. And these associations are being created through
to the brand node. Strength can be expressed through
feeding message or information towards the customers.
an equation
Besides marketer controlled sources of information brand
associations can also be created in a variety of other ways: SBA= f (Amount or quantity of processing of received
- by direct experience
information + nature or quality of that processing)
- from information communicated about brand from other
commercial or non-partisan sources- e.g. consumer reports, word
of mouth The more deeply a person thinks about product
- assumptions or inferences from brand and its elements information and relates it to existing brand knowledge,
the stronger the resulting brand associations.
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

6
 2/8/18

Brand Image Brand Image

Individual
Strength of Brand Associations
The source of information creating the strongest brand
Having deep thought Having shallow thought over attribute (descriptive features that characterize a product) and
over product info product info brand benefit (personal value and meaning attached to
product attribute) is commonly known as direct experience.
Other sources are: WOM, Price, Quality etc.
Relates this info to existing Doesn‘t relate this info to
brand knowledge existing brand knowledge Favorability of Brand Associations
Favorable associations for a brand are those
Stronger brand Weaker brand associations associations that are desirable to consumers and are
Associations successfully delivered by the product.
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Brand Image Brand Image

Favorability of Brand Associations Uniqueness of Brand Associations
In order to survive in the long run brand should have
Desirability depends on three factors: sustainable competitive advantage or “USP” that gives
[Link] relevant consumers find the brand association consumers a compelling reason why they should buy that
[Link] distinctive consumers find the brand association
particular brand. The differences may be communicated
[Link] believable consumers find the brand association
explicitly (direct comparison) or implicitly (no comparison, focus
Deliverability also depends on three factors: on product or non-product related attributes).
[Link] actual or potential ability of the product to perform
[Link] current or future prospects of communicating that To create the differential response that leads to CBBE, it is
performance important that some of the strongly held brand associations are
[Link] sustainability of the actual and communicated performance not only favorable but also unique. This uniqueness will serve as
over time. POD and will give answer to the consumers “why to buy this
Copyright © 2013 Pearson Education brand”? Copyright © 2013 Pearson Education

Brand Image To Sum up...

Strength of • More deeply a person thinks about product ¨ To create brand equity, marketers should:
information and relates it to existing brand
Brand knowledge, stronger is the resulting brand ¤ Create favorable consumer response i.e. brand
Associations association awareness
¤ Create positive brand image though brand associations
Favorability of • Is higher when a brand possesses relevant
that are strong, favorable, and unique
Brand attributes and benefits that satisfy
Associations consumer needs and wants

Uniqueness of • “Unique selling proposition” of the product

Brand • Provides brands with sustainable
competitive advantage
Associations
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

7
 2/8/18

Identifying and Establishing Brand

Basic Concepts
Positioning
¨ Brand positioning
¤ Act of designing the company’s offer and image so that
Basic Concepts it occupies a distinct and valued place in the target
customers’ minds
Target Market
¤ Finding the proper “location” in the minds of consumers

Nature of Competition or market segment

¤ Allows consumers to think about a product or service in
Points-of-Parity and Points-of-Difference the “right” perspective

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Figure 2.3 - Consumer Segmentation

Target Market Bases
¨ 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
n Identifiability
n Size
n Accessibility
n Responsiveness

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Figure 2.4 - Business-to-Business Figure 2.5 - Hypothetical Examples

Segmentation Bases of Funnel Stages and Transitions

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

8
 2/8/18

Nature of Competition Nature of Competition

Competitive analysis Indirect competition
• Considers resources, capabilities and likely • Even if a brand does not face direct
intentions of other firms. competition in its product category, and thus does
• Allows marketers to choose markets where not share performance related attributes with
consumers can be profitably served. other brands, it can still share more abstract
associations and face indirect competition in a
more broadly defined product category.
APPLE vs. TESLA; GOOGLE vs. SIEMENS

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Points of Parity and Points of

Nature of Competition
Difference
Multiple frames of reference ¨ Points-of-difference associations
• Result of broader category competition or the ¨ Points-of-parity associations
intended future growth of a brand. ¨ Points-of-parity versus points-of-difference

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Points of Parity and Points of Points of Parity and Points of

Difference Difference

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

9
 2/8/18

Points of Parity and Points of

Points- of-parity associations
Difference
• Attributes shared with other brands.
• Three types of associations are:
• Category points- of-parity: Necessary conditions for
brand choice.
• Competitive points-of-parity: Associations designed to
negate competitors’ points-of-difference.
• Correlational points-of-parity: Potential negative
associations that arise from the existence of other, more
positive associations for the brand.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Points- of-parity associations Points- of-parity associations

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Points-of-parity versus points-of-

To Sum up…
difference
• Unless certain points-of-parity can be achieved to ¨ To appropriately position a brand, marketers
overcome potential weaknesses, points-of-difference should:
may not even matter. ¤ Identify their target customers
• There is a “zone” or “range of tolerance or ¤ Analyze the type of competition they might face in the
acceptance” with points-of-parity. identified market base
¤ Identify product features and associations that are
• Points-of-parity are easier to achieve than points-of-
different or similar to their competitors
differences.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

10
 2/8/18

Defining and communicating the

Positioning Guidelines
competitive frame of reference
Defining and Communicating the Competitive Frame of • Communicating category benefits - Marketers use
Reference
product benefits to announce category membership.
Choosing Points-of-Difference • Exemplars - Well-known, noteworthy brands in a

category can also be used as exemplars to specify a

Establishing Points-of-Parity and Points-of-Difference brand’s category membership.
• Product descriptor - The product descriptor that
Straddle Positions follows the brand name is often a very compact
means of conveying category origin.
Updating Position Overtime

Developing a Good Positioning

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Defining and communicating the

Choosing points- of-difference
competitive frame of reference
• Desirability criteria
• Deliverability criteria
• Feasibility
• Communicability
• Differentiating criteria

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Establishing points-of-parity and

Straddle positions
points-of-difference
• Separate the attributes • Type of positioning where a company is able to
• Leverage equity of another entity straddle two frames of reference with one set of
• Redefine the relationship
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.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

11
 2/8/18

Straddle positions Straddle positions

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Straddle positions Updating positions overtime

• Laddering
• Once the target market attains a basic understanding
of how the brand relates to alternatives in the same
• If the points-of-parity and points-of-difference with category, it may be necessary to deepen the meanings
respect to both categories are not credible, associated with the brand positioning.
consumers may not view the brand as a legitimate • Failure to move up the ladder may reduce the strategic
player in either category. alternatives available to a brand.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Updating positions overtime Updating positions overtime

• Laddering- Philips • Reacting
• When a competitor challenges an existing POD or
attempts to overcome a POP, there are essentially three
main options for the target brand:
• Do nothing.
• Go on the defensive.
• Go on the offensive.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

12
 2/8/18

To Sum up ... Brand Mantra

¨ Brand positioning describes how a brand can
effectively compete against a specified set of
competitors
¨ A good product positioning should: Designing a Brand Mantra
¤ Have a “foot in the present” and a “foot in the future”
¤ Identify all relevant points-of-parity Implementing a Brand Mantra
¤ 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”
Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Brand mantra Designing a brand mantra

• Short, three-to five-word phrase that captures the • A good brand mantra should provide:
irrefutable essence or spirit of the brand positioning. • Brand functions: Nature of the product or service or
• Authentic-Athletic-Performance the type of experiences or benefits the brand provides.
• Provides guidance about: • Descriptive modifier: Combined with brand functions,

• What products to introduce under the brand. helps delineate the brand boundaries.
• What ad campaigns to run. • Emotional modifier: Determines how a brand provides
benefits and in what ways.
• Where and how the brand should be sold.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

Designing a brand mantra_E.G. Designing a brand mantra_E.G.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

13
 2/8/18

Implementing brand mantra To Sum up...

• Should be developed at the same time as the brand ¨ A good brand mantra should:
positioning. ¤ Communicate the category of the business to set the
• Requires more internal examination and involves brand boundaries and clarify what is unique about the
input from a wider range of company employees. brand
¤ Be simple, crisp, and vivid
• Based on core brand associations, a brainstorming
¤ Stake out ground that is personally meaningful and
session can attempt to identify PODs, POPs, and
relevant to as many employees as possible
different brand mantra candidates.

Copyright © 2013 Pearson Education Copyright © 2013 Pearson Education

WE ARE DONE FOR THIS CHAPTER

Copyright © 2013 Pearson Education

14