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Brand Equity
C H A P T E R
Brand Equity
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Copyright 2002, Harsh V Verma
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Harsh V Verma
Excel Books
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Brand Equity
In the beginning of the 90s, four issues were identified as the strategic challenges for marketers and researchers. These were: i. ii. Measuring brand equity Measuring marketings effectiveness
iii.
iv.
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Brand Equity
name and symbol add to or subtract from the value provided by a product or
service to a firm and/or to that firms customers.
Cont.
(Aaker, 1991).
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Brand Equity
Product
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Value to Customers
Brand Equity
Brand equity assets can enhance or decrease value for customers. A brands equity is valuable to customers because: It helps customers in information processing. A brand is useful in aiding customers in interpreting, processing, and storing information about products and brands. It simplifies this process. A brands assets enhance customer confidence in the purchase decision. One feels more confident in purchasing a brand (imagine buying an unbranded product, e.g., like tooth paste). The final value to the customer comes in the form of usage satisfaction.
Cont.
Copyright 2002, Harsh V Verma
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Value of Marketer
Brand Equity
Brand equity also plays a critical role in enhancing value for the marketer. A firm benefits from the equity in the following ways:
The effectiveness and efficiency of marketing programmes is increased by brand equity assets. The expenditure associated with a brand to achieve a
goal generally tends to be less than an unbranded product aiming to achieve the same goal.
Brand equity dimensions allow a firm to have greater customer loyalty. Brand equity allows a firm to charge premium. Brand equity provides great opportunities for growth. Brand equity is a good source of achieving leverage in distribution channels. Finally, brand equity is a provider of competitive advantage. It imposes
Harsh V Verma
Excel Books
C-6
Brand Equity
monetized and defined in economic terms: the incremental cash flows which
could be traced to the brand name. A brand is a constellation of meanings and associations. These are not in the product that a brand enrobes; rather, they are all engineered in the prospects mind. They live, grow and die in the mind. They also add or subtract value. A brand is what it stands for in the consumers perceptual space. It is an identity which is at the core of equity
creation. Brand name is just a cue. A subtle trigger makes a brand surface
in the mind.
Cont.
Copyright 2002, Harsh V Verma
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Harsh V Verma
Excel Books
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Brand Equity
Product Revenue
Contribution/Equity
Cont.
Copyright 2002, Harsh V Verma
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Excel Books
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Brand Equity
Brand image
Brand equity
Source: Biel, Alexander, L. How Brand Image Drives Brand Equity, Journal of Advertising Research, Nov-Dec 1992, P.Rc-7.
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Brand Equity
Brand image has three components: Image of provider Image of user Image of the product.
Cont.
Copyright 2002, Harsh V Verma
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Harsh V Verma
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Brand Equity
Brand Name
Brand Value
+
Product
Marketing Effects Product Value
+ (-)
Harsh V Verma
Excel Books
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Brand Equity
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Leather That Weathers Unique Sole Water Resist Oiled Upper
Attribute Associations
Product Related
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Brand Equity
Symbolic benefits
Benefit Ferrari
Cont.
Copyright 2002, Harsh V Verma
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Excel Books
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Brand Equity
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Beliefs Easy to Use
Spray
Attributes
(+)
(+) (+)
Rexona Deodorant
Price
Save Money
Perfume
Smells great
(-) (+ +) (-)
Strong Embarrassment
Deostral
Confidence Effective
Indian
Local
Copyright 2002, Harsh V Verma
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Excel Books
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Brand Equity
to a brand, its name and symbol add to or subtract from the value provided by a
product or service to a firm and/or to that firms customers. The following are the assets and liabilities on which the brand equity is based:
Brand loyalty
Name awareness Perceived quality
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Excel Books
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Brand Equity
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Aaker Equity as assets and liabilities Brand loyalty Name awareness Perceived quality Brand associations Other proprietary assets Addition or subtraction from the value provided by a product Lasser, Mittal and Sharma Brands superiority Performance Social image Value Trustworthiness Identification
Comparative opinions of experts on brand equity Biel Key Terms Converting image into equity Image of maker Image of product Image of user Images of competing brands Keller Consumer based brand equity Brand knowledge structures Brand awareness Brand image.
Equity
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Brand Report Card
Brand Equity
Kevin Lane Keller suggests that the worlds strongest brands share ten characteristics. On the basis of the attributes shared by the worlds top brands, a brand report card could be constructed. Ten Attributes Shared by the Worlds Top Brands are: 1. Excellent Delivery of Desired Benefits 2. Staying Relevant 3. 4. 5. 6. 7. 8. 9.
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Pricing Reflects Value Proper Positioning Consistency Brand Portfolio and Hierarchy Coordinated Support of all Marketing Activities Understand Brand Meaning Long-term support
Copyright 2002, Harsh V Verma
Excel Books