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LECTURE NOTES
CHAPTER 9
Prof. dr. Teoman Duman
Student: Irfan Djedović
CREATING BRAND EQUITY
Every business has a brand! Why? Because your brand is your business™!
Brand - a name, term, sign, symbol, or design, or a combination of them, intended to identify
the goods or services of one seller or group of sellers and to differentiate them from those of
competitors.
A brand is thus a product or service that adds dimensions that differentiate it in some way
from other products or services designed to satisfy the same need.
Branding has been around for centuries as a means to distinguish the goods of one producer
from those of another.
Functional, rational, or tangible—related to product performance
Symbolic, emotional or intangible—related to what the brand represents
The ability of a brand to simplify decision making and reduce risk is invaluable;
Brands also perform valuable functions for firms;
Simplify product handling or tracing;
Help to organize inventory and accounting records;
Offers the firm legal protection for unique features or aspects of the product;
Intelectual property;
Brands can signal a certain level of quality so that satisfied buyers can easily choose
the product again;
Brand loyalty provides predictability and security of demand;
Loyalty also can translate into a willingness to pay a higher price—often 20 to 25
percent more;
Competitive advantage;
Sustained future revenues to their owner.
The quality of the investment in brand building is the critical factor, not necessarily the
quantity.
Brand promise is the marketer's vision of what the brand must be and do for consumers.
ex: Burger King
Brand Equity Models:
Brand asset valuator
Aaker model
Brandz
Brand resonance
Building Brand Equity
Marketers build brand equity by creating the right brand knowledge structures with the right
consumers.
There are three main sets of brand equity drivers:
The initial choices for the brand elements or identities making up the brand (e.g.,
brand names, URLs, logos, symbols, characters, spokespeople, slogans, jingles,
packages, and signage).
The product and service and all accompanying marketing activities and supporting
marketing programs.
Other associations indirectly transferred to the brand by linking it to some other entity
(e.g., a person, place, or thing)
Brand elements are those trademarkable devices that serve to identify and differentiate the
brand.
The test of the brand-building ability of these elements is what consumers would think or feel
about the product if they only knew about the brand element.
ex: Nike
Brand element choice criteria:
Memorable
Meaningful
Likeability.
Transferable.
Adaptable
Protectible
An indirect approach - assesses potential sources of brand equity by identifying and tracking
consumer brand knowledge structures.
A direct approach - assesses the actual impact of brand knowledge on consumer response to
different aspects of the marketing.
A brand audit is a consumer-focused exercise that involves a series of procedures to assess
the health of the brand, uncover its sources of brand equity, and suggest ways to improve and
leverage its equity.
Brand-tracking studies are a means of understanding where, how much, and in what ways
brand value is being created.
Brand Valuation
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
Brand Reinforcement
Brand equity is reinforced by marketing actions that consistently convey the meaning of the
brand to consumers in terms of:
(1) What products the brand represents; what core benefits it supplies; and what needs it
satisfies; as well as
(2) How the brand makes those products superior and which strong, favorable, and unique
brand associations should exist in the minds of consumers.
Brand Revitalization
Changes in consumer tastes and preferences, the emergence of new competitors or new
technology, or any new development in the marketing environment could potentially affect
the fortunes of a brand.
The first thing to do in turning around the fortunes of a brand is to understand what the
sources of brand equity were to begin with.
Positive associations
Negative associations
ex: Harley Davidson
Devising a Branding Strategy
The branding strategy for a firm reflects the number and nature of common and distinctive
brand elements applied to the different products sold by the firm.
Devising a branding strategy involves deciding the nature of new and existing brand elements
to be applied to new and existing products.
When a firm uses an established brand to introduce a new product, it is called a brand
extension.
When a new brand is combined with an existing brand, the brand extension can also be
called a sub-brand
An existing brand that gives birth to a brand extension is referred to as the parent brand.
If the parent brand is already associated with multiple products through brand extensions, then
it may also be called a family brand.
In a line extension, the parent brand is used to brand a new product that targets a new
market segment within a product category currently served by the parent brand, such as
through new flavors, forms, colors, added ingredients, and package sizes
In a category extension, the parent brand is used to enter a different product category
from that currently served by the parent brand.
A Brand line consists of all products—original as well as line and category extensions— sold
under a particular brand.
A Brand mix is the set of all brand lines that a particular seller makes available to buyers
Branded variants are specific brand lines supplied to specific retailers or distribution
channels.
A licensed product is one whose brand name has been licensed to other manufacturers who
actually make the product.
Branding Decisions
Brand Extensions
Recognizing that one of their most valuable assets is their brands, many firms have decided to
leverage that asset by introducing a host of new products under some of their strongest brand
names.
Most new products are in fact line extensions—typically 80 to 90% in any one year.
ex:
Advantages of brand extensions:
New-Product Success
Positive Feedback Effects
Brand Portfolios
All brands have boundaries—a brand can only be stretched so far. Multiple brands are often
necessary to pursue multiple market segments.
Other reasons for introducing multiple brands in a category include:
Customer equity
We can relate brand equity to one other important marketing concept, Customer equity.
Customer equity - „ The sum of lifetime values of all customers“.
Strongest brends in 2010 on the former Yugoslavia teritory (22 million people):
Coca-cola
Milka
Argeta