Chapter 9 Creating Brand Equity

1. Chapter 9 Creating Brand Equity Philip Kotler Kevin Lane Keller Donna Sia, Shelle Caiga, Rhea Jardin May 4, 2012 www.hypermarketing2.co m

2. Outline: What do we have to know? 1. What is brand and how does branding work? 2. What is brand equity? 3. How is brand equity built, measured and managed? 4. What are the important decisions in developing a branding strategy? hypermarketing2.co www. m

3. What is brand? Brand is a “name, term, sign, symbol, or design or combination of then, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.” hypermarketing2.co www. m

4. How does branding work? Branding is endowing products and services with the power of a brand. It creates mental structures that help consumers organize their knowledge about products and services in a way that clarifies their decision making and, in the process, provides value to the chain. hypermarketing2.co www. m

5. What is Brand Equity? Brand equity is the added value endowed on products and services. It may be reflected in the way consumers think, feel and act with respect to the brand, as well as in the prices, market share and profitability the brand commands for the firm. hypermarketing2.co www. m

6. Outline: Like playing basketball, managing a brand involves strategies… Step 1. Identify and establish Step 3. Measure and interpret Brand Positioning Brand Performance Step 2. Plan and implement Step 4. Grow and sustain Brand Marketing Brand Value www.hypermarketing2.co m

7. What can branding do to your business? Identifies the maker & signifies quality Creates barriers to entry Serves as competitive Offers legal protection advantage www.hypermarketing2.co m

8. What can branding do to your business? Loyola Schools AGSB School of Law Secures price premium School of Medicine Organizes accounting and simplifies product handling hypermarketing2.co www. m

9. Provide customers the right type of experience to create desired brand knowledge. Hi, I’m Jersey 17, I am passionate and I try to be the best at what I do especially basketball. Jersey 17’s Brand Print hypermarketing2.co www. m

10. Provide customers the right type of experience to create desired brand knowledge. What is important to me is to give my fans a good game and give my best for the team. Jersey 17’s Brand Print hypermarketing2.co www. m

11. Provide customers the right type of experience to create desired brand knowledge. Even though I am busy with my career, I was still able to finish my education & start my own business Jersey 17’s Brand Print hypermarketing2.co www. m

12. Provide customers the right type of experience to create desired brand knowledge. I hope I inspire young athletes to pursue their dreams, whatever sport they are into. Jersey 17’s Brand Print hypermarketing2.co www. m

13. Provide customers the right type of experience to create desired brand knowledge. Thoughts & Beliefs Images Feelings Jersey 17’s Brand Print hypermarketing2.co www. m

14. What STRONG brands do… Improved perceptions of product performance Greater Loyalty hypermarketing2.co www. m

15. What STRONG brands do… Large Margins hypermarketing2.co www. m

16. What STRONG brands do… Less vulnerability to competitive marketing actions More inelastic consumer response Increased marketing communications effectiveness hypermarketing2.co www. m

17. One comparative measure of brand equity is the BAV Brand Asset Evaluator (BAV) compares brand equity of thousands of brands across hundreds of categories and these are its four pillars (Derek) Brand Equity Differentiation Knowledge Relevance Esteem Energy www. hypermarketing2.co m

18. Develop your brand’s identity. Brand Essence Extended Identity Core Identity Aaker Model hypermarketing2.co www. m

19. Develop your brand’s identity by: Brand Essence: Movement for self-esteem Campaign for real beauty Empowering Women Aaker Model hypermarketing2.co www. m

20. Develop your brand’s identity by: Brand Essence: Movement for self- Extended esteem Identity: Dove Men + Campaign for real Care beauty Aaker Model www.hypermarketing2.co m

21. Develop your brand’s identity by: Brand Essence: Movement for self- Extended esteem Identity: Dove Men + Core Campaign for real Care Identity: beauty Beautiful Skin Aaker Model www.hypermarketing2.co m

22. Brand building follows a sequential series of steps: Strong relationship High share of category expenditure Bonding Advantage Performance Relevance Weak relationship/ Low share of category Presence expenditure Brand Dynamics Pyramid www.hypermarketing2.co m

23. Building relationship with a brand… Do I know about it? Presence Presence Brand Dynamics Pyramid www.hypermarketing2.co m

24. Building relationship with a brand… Does it offer me something? Relevance Presence Brand Dynamics Pyramid www.hypermarketing2.co m

25. Building relationship with a brand… Can it deliver? Bonding Advantage Performance Relevance Presence Brand Dynamics Pyramid www.hypermarketing2.co m

26. Building relationship with a brand… Does it offer something Bonding better than others? Advantage Performance Relevance Presence Brand Dynamics Pyramid www.hypermarketing2.co m

27. Building relationship with a brand… Bonding Advantage Nothing else I Performance Relevance beats it! Presence Brand Dynamics Pyramid www.hypermarketing2.co m

28. Building relationship with a brand… Resonance Judgment & Feelings Performance & Imagery Presence Brand Salience Brand Resonance Pyramid hypermarketing2.co www. m

29. What drives brand equity? Brand Elements Men and Women for others… The Ateneo Way… hypermarketing2.co www. m

30. Like the person of your dreams, brand elements should be… Likeable Protectible Memorable Adaptable Meaningful Transferable? hypermarketing2.co www. m

31. What drives brand equity? Marketing Activities hypermarketing2.co www. m

32. What drives brand equity? Meaning Transference Mirrors your brand www.hypermarketing2.co m

33. Brands are not built by advertising alone. Designing Holistic Marketing Activities Personalize Integrate Internalize hypermarketing2.co www. m

34. Measuring Brand Equity Brand Audits Health of brand Source of brand equity Ways to improve equity Where, how much & Brand-Tracking what ways brand value is being created? Brand Valuation Financial Value of the brand hypermarketing2.co www. m

35. In summary: Brand Elements Brand Valuation The company Thoughts & Beliefs Images Bonding Brand Advantage Feelings Performance Relevance Presence Presence Marketing Activities and Meaning Transference Brand Relationship Consumer www.hypermarketing2.co m

36. Chapter 9 Creating Brand Equity Philip Kotler Kevin Lane Keller Donna Sia, Shelle Caiga, Rhea Jardin May 4, 2012 www.hypermarketing2.co m

37. CREATING BRAND EQUITY MARKMA Rhea G. Jardin May 4, 2012 hypermarketing2.co www. m

38. What is a Brand? A product or service whose dimensions differentiate it in some way from other products or services designed to satisfy the same need hypermarketing2.co www. m

39. hypermarketing2.co www. m

40. Role of Brands 1. Identify the source or maker of the product that satisfies the consumers’ needs 2. Simplifies product handling or tracing 3. Offers firm legal protection with intellectual property rights 4. Signals level of quality so that buyers can easily choose the product again hypermarketing2.co www. m

41. What is Branding? - Endowing products and services with the power of the brand by creating differences between products - “who” the product is, what the product does and why consumers should care hypermarketing2.co www. m

42. Brand Equity - the added value on products and services - reflected on how consumers think, feel and act on the brand - reflected in the prices, market share and profitability for the firm hypermarketing2.co www. m

43. Customer-based brand equity A. Positive – customers react more favorably to a product and the way it is marketed B. Negative – customers react less favorably to marketing activity for the brand Three (3) key ingredients: 1. Consumer response 2. Consumer’s knowledge about the brand 3. Consumer’s perceptions, preferences and behavior hypermarketing2.co www. m

44. Brand Knowledge 1. Quality is the critical factor not the quantity 2. Dictates future directions for the brand based on how consumers think and feel about the brand Brand promise - the marketer’s vision of what the brand must be and do for consumers hypermarketing2.co www. m

45. Five pillars of brand equity 1. Differentiation – measures the degree to which a brand is seen as different from others 2. Energy – measures the brand’s sense of momentum 3. Relevance – measures the breadth of a brand’s appeal 4. Esteem – measures how well the brand is regarded and respected 5. Knowledge – measures how familiar and intimate consumers are with the brand hypermarketing2.co www. m

46. Five pillars of brand equity + + = energized brand strength - point to the brand’s future value + = brand stature - “report card” of past performance “Pillar’s pattern” reveal a brand’s current and future status www.hypermarketing2.co m

47. BrandDynamics Pyramid -Developed by Millward Brown of BRANDZ Marketing as a model of brand strength Nothing else beats it Bonding Does it offer something Advantage better than the others? Can it deliver? Performance Does it offer me Relevance something? Do I know Presence about it? www. hypermarketing2.co m

48. BrandDynamics Pyramid -Developed by Millward Brown of BRANDZ Marketing as a model of brand strength Nothing else beats it Bonding Strong relationship / High Does it offer something share of category expenditure Advantage better than the others? Can it deliver? Performance Does it offer me Relevance something? Do I know Presence Weak relationship / about it? Low share of category expenditure www. hypermarketing2.co m

49. Brand Resonance Model Stages of Brand Brand Brand building Branding objective at Development blocks each stage 4. Relationships Resonance = what about Intense, active you and me? loyalty 3. Response = Judgments Feelings Positive, what about accessible you? reactions 2. Meaning = Performance Imagery Points-of- what are you? parity & difference Salience 1. Identity = Deep, broad who are you? brand awareness hypermarketing2.co www. m

50. Brand Resonance Model Brand salience – how often and how easily customers think of the brand under various purchase or consumption situations Brand performance – how well the product or service meets customers’ functional needs Brand imagery – the ways in which brand attempts to meet customers’ psychological or social needs Brand judgments – focus on customers’ own personal opinions and evaluations Brand feelings – customers’ emotional responses and reactions with respect to the brand Brand resonance – nature of the relationship customers have with the brand (“in sync” with it) www.hypermarketing2.co m

51. Brand equity drivers 1. Initial choices for the brand elements or identities making up the brand 2. The way the brand is integrated into the supporting marketing program 3. The associations indirectly transferred to the brand by linking the brand to some other entity www.hypermarketing2.co m

52. Brand element choice criteria 1. Memorable – how easily the brand element is recalled and recognized (i.e. short names) 2. Meaningful – credibility of the brand, product ingredient or type of person who might use the brand 3. Likeable – how visually and verbally appealing is the brand element 4. Transferable – can the brand element be used to introduce new products in the same or different categories? www.hypermarketing2.co m

53. Brand element choice criteria 5. Adaptable – how adaptable and updatable is the brand element Betty Crocker in 1936 Betty Crocker in 1986 6. Protectible – brand names that become synonymous with product categories www. hypermarketing2.co m

54. Measuring brand equity 1. Brand audit - measures “where the brand has been” 2. Brand-tracking studies – measure “where the brand is now” and whether marketing programs are having the intended effects www.hypermarketing2.co m

55. Measuring brand equity Brand valuation – estimating the total financial value of the brand Rank Brand 2006 Brand Value (Billions) 1 Coca-cola $67.00 2 Microsoft $56.93 3 IBM $56.20 4 GE $48.91 5 Intel $38.32 6 Nokia $30.13 7 Toyota $27.94 8 Disney $27.85 9 McDonald’s $27.50 10 Mercedes-Benz $22.13 hypermarketing2.co www. m

56. Managing brand equity 1. Brand reinforcement - requires innovation and relevance throughout the marketing program - brand must be moving forward in the right direction with new offerings and ways to market them 2. Brand revitalization - reinvention strategy - renewal of commitment to quality www.hypermarketing2.co m

57. Brand Equity reflected on where customers price market share profitability quality is a factor over quantity Pillars of brand equity: differentiation energy relevance esteem knowledge energized brand strength brand stature criteria for brand element: memorable/short meaningful likeable transferrable adaptable protectible www. hypermarketing2.co m

58. CREATING BRAND EQUITY MARKMA Rhea G. Jardin May 4, 2012 hypermarketing2.co www. m

59. Chapter 9 Creating Brand Equity Philip Kotler Kevin Lane Keller Donna Sia May 4, 2012 hypermarketing2.co www. m

60. Outline: What do we have to know? 1. What is brand and how does branding work? 2. What is brand equity? 3. How is brand equity built, measured and managed? 4. What are the important decisions in developing a branding strategy? hypermarketing2.co www. m

61. What is brand? Brand is a “name, term, sign, symbol, or design or combination of then, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.” hypermarketing2.co www. m

62. How does branding work? Branding is endowing products and services with the power of a brand. It creates mental structures that help consumers organize their knowledge about products and services in a way that clarifies their decision making and, in the process, provides value to the chain. hypermarketing2.co www. m

63. What is Brand Equity? Brand equity is the added value endowed on products and services. It may be reflected in the way consumers think, feel and act with respect to the brand, as well as in the prices, market share and profitability the brand commands for the firm. hypermarketing2.co www. m

64. Outline: Like playing basketball, managing a brand involves strategies… Step 1. Identify and establish Step 3. Measure and interpret Brand Positioning Brand Performance Step 2. Plan and implement Step 4. Grow and sustain Brand Marketing Brand Value www.hypermarketing2.co m

65. What can branding do to your business? Identifies the maker & signifies quality Creates barriers to entry Serves as competitive Offers legal protection advantage www.hypermarketing2.co m

66. What can branding do to your business? Loyola Schools AGSB School of Law Secures price premium School of Medicine Organizes accounting and simplifies product handling hypermarketing2.co www. m

67. Provide customers the right type of experience to create desired brand knowledge. Hi, I’m Jersey 17, I am passionate and I try to be the best at what I do especially basketball. Jersey 17’s Brand Print hypermarketing2.co www. m

68. Provide customers the right type of experience to create desired brand knowledge. What is important to me is to give my fans a good game and give my best for the team. Jersey 17’s Brand Print hypermarketing2.co www. m

69. Provide customers the right type of experience to create desired brand knowledge. Even though I am busy with my career, I was still able to finish my education & start my own business Jersey 17’s Brand Print hypermarketing2.co www. m

70. Provide customers the right type of experience to create desired brand knowledge. I hope I inspire young athletes to pursue their dreams, whatever sport they are into. Jersey 17’s Brand Print hypermarketing2.co www. m

71. Provide customers the right type of experience to create desired brand knowledge. Thoughts & Beliefs Images Feelings Jersey 17’s Brand Print hypermarketing2.co www. m

72. What STRONG brands do… Improved perceptions of product performance Greater Loyalty hypermarketing2.co www. m

73. What STRONG brands do… Large Margins hypermarketing2.co www. m

74. What STRONG brands do… Less vulnerability to competitive marketing actions More inelastic consumer response Increased marketing communications effectiveness hypermarketing2.co www. m

75. One comparative measure of brand equity is the BAV Brand Asset Evaluator (BAV) compares brand equity of thousands of brands across hundreds of categories and these are its four pillars (Derek) Brand Equity Differentiation Knowledge Relevance Esteem Energy www. hypermarketing2.co m

76. Develop your brand’s identity. Brand Essence Extended Identity Core Identity Aaker Model hypermarketing2.co www. m

77. Develop your brand’s identity by: Brand Essence: Movement for self-esteem Campaign for real beauty Empowering Women Aaker Model hypermarketing2.co www. m

78. Develop your brand’s identity by: Brand Essence: Movement for self- Extended esteem Identity: Dove Men + Campaign for real Care beauty Aaker Model www.hypermarketing2.co m

79. Develop your brand’s identity by: Brand Essence: Movement for self- Extended esteem Identity: Dove Men + Core Campaign for real Care Identity: beauty Beautiful Skin Aaker Model www.hypermarketing2.co m

80. Brand building follows a sequential series of steps: Strong relationship High share of category expenditure Bonding Advantage Performance Relevance Weak relationship/ Low share of category Presence expenditure Brand Dynamics Pyramid www.hypermarketing2.co m

81. Building relationship with a brand… Do I know about it? Presence Presence Brand Dynamics Pyramid www.hypermarketing2.co m

82. Building relationship with a brand… Does it offer me something? Relevance Presence Brand Dynamics Pyramid www.hypermarketing2.co m

83. Building relationship with a brand… Can it deliver? Bonding Advantage Performance Relevance Presence Brand Dynamics Pyramid www.hypermarketing2.co m

84. Building relationship with a brand… Does it offer something Bonding better than others? Advantage Performance Relevance Presence Brand Dynamics Pyramid www.hypermarketing2.co m

85. Building relationship with a brand… Bonding Advantage Nothing else I Performance Relevance beats it! Presence Brand Dynamics Pyramid www.hypermarketing2.co m

86. Building relationship with a brand… Resonance Judgment & Feelings Performance & Imagery Presence Brand Salience Brand Resonance Pyramid hypermarketing2.co www. m

87. What drives brand equity? Brand Elements Men and Women for others… The Ateneo Way… hypermarketing2.co www. m

88. Like the person of your dreams, brand elements should be… Likeable Protectible Memorable Adaptable Meaningful Transferable? hypermarketing2.co www. m

89. What drives brand equity? Marketing Activities hypermarketing2.co www. m

90. What drives brand equity? Meaning Transference Mirrors your brand www.hypermarketing2.co m

91. Brands are not built by advertising alone. Designing Holistic Marketing Activities Personalize Integrate Internalize hypermarketing2.co www. m

92. Measuring Brand Equity Brand Audits Health of brand Source of brand equity Ways to improve equity Where, how much & Brand-Tracking what ways brand value is being created? Brand Valuation Financial Value of the brand hypermarketing2.co www. m

93. In summary: Brand Elements Brand Valuation The company Thoughts & Beliefs Images Bonding Brand Advantage Feelings Performance Relevance Presence Presence Marketing Activities and Meaning Transference Brand Relationship Consumer www.hypermarketing2.co m

94. Chapter 9 Creating Brand Equity Philip Kotler Kevin Lane Keller Donna Sia May 4, 2012 hypermarketing2.co www. m

Chapter 9 Creating Brand Equity

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Chapter 9 Creating Brand Equity