2.customer Based Brand Equity

CUSTOMER-BASED
BRAND EQUITY
(CBBE)
2.1
Customer-Based Brand Equity

The differential effect that brand knowledge
has on consumer response to the marketing of

that brand.
Keller, 1993
2.2

Differential effect
Differences in consumer response
Brand knowledge
A result of consumers knowledge about the
brand
Consumer response to marketing
Choice of a brand
Recall of copy points from an ad
Response to a sales promotion
Evaluations of a proposed brand extension
2.3
Brand Equity as a Bridge

Reflection of past investments in the marketing
of a brand
Direction for future marketing actions or
programs
2.4
Making a Brand Strong:

Brand Knowledge
Brand knowledge is the key to creating brand
equity.
Brand knowledge consists of a brand node in
memory with a variety of associations linked
to it.
Brand knowledge has two components: brand
awareness (strength of brand node)and brand
image(brand associations in memory).
2.5
Sources
of
Brand
Equity
Brand awareness
Brand recognition
Brand recall
Brand image
Strong, favorable, and unique brand associations
2.6
Brand Awareness
Advantages
Learning advantages
Register the brand in the minds of consumers
Consideration advantages
Likelihood that the brand will be a member of
the consideration set
Choice advantages
Affect choices among brands in the
consideration set
2.7
Establishing Brand Awareness

Increasing the familiarity of the brand through
repeated exposure (for brand recognition)

Forging strong associations with the
appropriate product category or other relevant
purchase or consumption cues (for brand
recall)
2.8
Creating a Positive Brand Image

Brand Associations
Does not matter which source of brand
association
Need to be favorable, strong, and unique
Marketers should recognize the influence of
these other sources of information by both
managing them as well as possible and by
adequately accounting for them in designing
communication strategies.
2.9
The Four Steps of Brand Building

1. Ensure identification of the brand with
customers and an association of the brand

in customers minds
2. Establish the totality of brand meaning in
the minds of consumers
3. Elicit the proper customer responses to the
brand identification and brand meaning
4. Convert brand response to create an
intense, active loyalty relationship between
customers and the brand
2.10
Four Questions Customers ask of

Brands
1. Who are you? (brand identity)
2. What are you? (brand meaning)
3. What about you? What do I think or feel
about you? (brand responses)

4. What about you and me? What kind of
association and how much of a connection
would I like to have with you? (brand
relationships)
2.11

Pyramid
RESONANCE
JUDGMENTS
PERFORMANCE
FEELINGS
IMAGERY
SALIENCE
4.RELATIONSHIPS=
4.RELATIONSHIPS=
Whataboutyouandme?
Whataboutyouandme?
3.RESPONSE=
3.RESPONSE=
Whataboutyou?
Whataboutyou?
2.MEANING=
2.MEANING=
Whatareyou?
Whatareyou?
1.IDENTITY=
1.IDENTITY=
Whoareyou?
Whoareyou?
2.12
Sub-Dimensions of CBBE
Pyramid
LOYALTY
ATTACHMENT
COMMUNITY
ENGAGEMENT
QUALITY
CREDIBILITY
CONSIDERATION
SUPERIORITY
PRIMARYCHARACTERISTICS&
SECONDARYFEATURES
PRODUCTRELIABILITY,DURABILITY
&SERVICEABILITY
SERVICEEFFECTIVENESS,
EFFICIENCY&EMPATHY
STYLEANDDESIGN
PRICE
WARMTH
FUN
EXCITEMENT
SECURITY
SOCIALAPPROVAL
SELFRESPECT
USERPROFILES
PURCHASE&USAGE
SITUATIONS
PERSONALITY&
VALUES
HISTORY,HERITAGE
&EXPERIENCES
CATEGORYIDENTIFICATION
NEEDSSATISFIED
Salience
Dimensions
Depth of brand awareness
Ease of recognition and recall

Strength and clarity of category membership
Breadth of brand awareness

Purchase consideration
Consumption consideration
2.14
Depth and Breadth Importance

The product category hierarchy shows us not
only the depth of awareness matters but also

the breadth.
The brand must not only be top-of-mind and
have sufficient mind share, but it must also
do so at the right times and places.
2.15
Product Category
Structure
To fully understand brand recall, we need to
appreciate product category structure, or how

product categories are organized in memory.
2.16
Performance Dimensions
Primary characteristics and supplementary
features
Product reliability, durability, and serviceability
Service effectiveness, efficiency, and empathy
Style and design
Price
2.17
2.18
Imagery Dimensions
User profiles
Demographic and psychographic characteristics

Actual or aspirational
Group perceptionspopularity
Purchase and usage situations

Type of channel, specific stores, ease of purchase
Time (day, week, month, year, etc.), location, and context
of usage
Personality and values

Sincerity, excitement, competence, sophistication, and
ruggedness
History, heritage, and experiences

Nostalgia
Memories
2.19
Judgment Dimensions
Brand quality
Value
Satisfaction
Brand credibility
Expertise
Trustworthiness
Likeability
Brand consideration
Relevance
Brand superiority
Differentiation
2.20
Feelings Dimensions
Warmth
Fun
Excitement
Security
Social Approval
Self-respect
2.21
Resonance Dimensions
Behavioral loyalty
Frequency and amount of repeat purchases
Attitudinal attachment
Love brand (favorite possessions; a little
pleasure)
Proud of brand
Sense of community
Kinship
Affiliation
Active engagement
Seek information
Join club
Visit website, chat rooms
2.22

Model
INTENSE,ACTIVE
INTENSE,ACTIVE
LOYALTY
LOYALTY
Consumer
Brand
Resonance
Consumer
Judgments
Brand
Performance
Consumer
Feelings
Brand
Imagery
BrandSalience
RATIONAL&
RATIONAL&
EMOTIONAL
EMOTIONAL
REACTIONS
REACTIONS
POINTSOF
POINTSOF
PARITY&
PARITY&
POINTSOF
POINTSOF
DIFFERENCE
DIFFERENCE
DEEP,BROAD
DEEP,BROAD
BRAND
BRAND
AWARENESS
AWARENESS
-55
FF-
6
FF--6
F-7
F-7
I-10
I-10
Feelings
Feelings
0.58
F-4
F-4
R-7
R-7
0.66
8
RR--8
FF--3
3
FF--22
F-1
F-1
122
FF--1
P-7
P-7
J-7
J-7
8
JJ--8
RR--3
3
RR--22
R-1
R-1
122
RR--1
1
-111
RR-
0.49
-55
RR-
8
FF--8
1
-111
FF-
I-I-33
II--22
I-1
I-1
8
PP--8
Judgment
Judgment
6
RR--6
0.24
RR--9
9
FF--9
9
5
I-I-5
II--66
I-7
I-7
2
II--112
0.17
-55
JJ-
I-I-44
0.65
6
JJ--6
Imagery
Imagery
JJ--9
9
-55
PP-
6
PP--6
I-I-99
II--88
PP--44
FF--1
100
P-10
P-10
Performance
Performance
JJ--1
100
PP--9
9
111
I-I-1
JJ--3
3
JJ--22
J-1
J-1
122
JJ--1
1
-111
JJ-
PP--3
3
PP--22
P-1
P-1
122
PP--1
1
-111
PP-
Application:
Identify the Key Drivers of
Brand Equity
J-4
J-4
R-10
R-10
Resonance
Resonance
R-4
R-4
Brand Building Implications

Customers own brands.
Dont take shortcuts with brands.
Brands should have a duality.
Brands should have richness.
Brand resonance provides important focus.
2.25
Creating Customer Value

Customer-brand relationships are the
foundation of brand resonance and building

a strong brand.
The customer-based brand equity model
certainly puts that notion front and center.
2.26
Is a company consumer-centric?
1.
2.
3.
4.
5.
Is the company looking for ways to take care

of you?
Does the company know its customers well
enough to differentiate between them?
Is someone accountable for customers?
Is the company managed for shareholder
value?
Is the company testing new customer offers
and learning from the results?
2.27
Customer Relationship
Management (CRM)
Uses a companys data systems and
applications to track consumer activity and

manage customer interactions with the
company
2.28
Customer Equity
Blattberg and Deighton (1996) offer eight guidelines as a
means of maximizing customer equity:
Invest in highest-value customers first

Transform product management into customer management
Consider how add-on sales and cross-selling can increase
customer equity
Look for ways to reduce acquisition costs
Track customer equity gains and losses against marketing
programs
Relate branding to customer equity
Monitor the intrinsic retainability of your customer
Consider writing separate marketing plansor even building two
marketing organizationsfor acquisition and retention efforts
2.29
Customer Equity
The sum of lifetime values of all customers
Customer lifetime value (CLV) is affected by
revenue and by the cost of customer

acquisition, retention, and cross-selling
Consists of three components:
Value equity
Brand equity
Relationship equity
Rust, Zeithamal & Lemon, 2004
2.30
Relationship of Customer Equity to

Brand Equity
Customers drive the success of brands but
brands are the necessary touchpoint that

firms have to connect with their customers.
Customer-based brand equity maintains that
brands create value by eliciting differential
customer response to marketing activities.
The higher price premiums and increased
levels of loyalty engendered by brands
generate incremental cash flows.
2.31
THANK
YOU!
2.32
Discussion Questions
1. Pick a brand. Attempt to identify its sources of brand
equity. Assess its level of brand awareness and the

strength, favorability, and uniqueness of its associations.
2. Which brands resonate with you? Why?
3. Can every brand achieve resonance with its
customers? Why or why not?
4. Pick a brand. Assess the extent to which the brand is
achieving the various benefits of brand equity.
2.33

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CUSTOMER-BASED

Customer-Based Brand Equity

has on consumer response to the marketing of

Customer-Based Brand Equity

Brand Equity as a Bridge

Making a Brand Strong:

Establishing Brand Awareness

repeated exposure (for brand recognition)

Creating a Positive Brand Image

The Four Steps of Brand Building

customers and an association of the brand

Four Questions Customers ask of

about you? (brand responses)

Customer-Based Brand Equity

Depth of brand awareness

Ease of recognition and recall

Breadth of brand awareness

Depth and Breadth Importance

only the depth of awareness matters but also

appreciate product category structure, or how

Demographic and psychographic characteristics

Purchase and usage situations

Personality and values

History, heritage, and experiences

Frequency and amount of repeat purchases

Love brand (favorite possessions; a little

Customer-Based Brand Equity

Brand Building Implications

Creating Customer Value

foundation of brand resonance and building

Is the company looking for ways to take care

Uses a companys data systems and

applications to track consumer activity and

means of maximizing customer equity:

Invest in highest-value customers first

revenue and by the cost of customer

Rust, Zeithamal & Lemon, 2004

Relationship of Customer Equity to

brands are the necessary touchpoint that

equity. Assess its level of brand awareness and the

2. Which brands resonate with you? Why?

3. Can every brand achieve resonance with its

customers? Why or why not?

4. Pick a brand. Assess the extent to which the brand is

achieving the various benefits of brand equity.

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