The concept of customer-based brand equity

The concept of customer-based brand equity

Consumer-based brand

Customer-based brand equity is defined as the differential effect that brand knowledge has on consumer response to the marketing of the brand. A brand has positive customer based brand equity when consumers react more favorably to a product and the way it is marketed when the brand is identified than when it is not. Therefore, consumers might be more accepting of a new brand extension for a brand with positive customer based equity, less sensitive to price increases and withdrawal of advertising support, or more willing to seek the brand in a new distribution channel. On the other hand. A brand has negative customer based brand equity if consumers react less favorably to marketing activity for the brand compared with an unnamed or dishonestly named version of the product.

KEY terms

1.       Differential effect: brand equity arises from differences in consumer response. If no different occur, then the brand name product can essentially be classified as a commodity or a generic version of the product. Competition, most likely, would then just be based on price.

2.       Brand knowledge: These differences in response are s result of consumers’ knowledge about the brand, that is, what they have learnt, felt, seen and heard about the brand as a result of their experience over time. Therefore, even though strongly influenced by the marketing activity of the firm, brand equity ultimately depends on what exist in the consumers’ mind.

3.       Consumer response to marketing: customers who have differential responses  to a brand that are reflected in perceptions and behavior related to all aspects of brand marketing, including their choice of a brand, recall of copy pints from an ad, response to a sales promotion, and evaluate of a proposed brand extension.

Making a brand strong by Brand knowledge

Brand knowledge is the key to creating brand equity because it creates the differential effect that drives brand equity. What marketers need is then an understanding way to represent way to represent how brand knowledge exists in consumer memory,

Associative Network Memory Model is developed to help marketer to solve this problems. This model views memory as consisting of a network of nodes and connecting links, in which nodes represent stored information or concepts, and links represent the strength of association between the information and concept.

We can consider brand management has two components: brand awareness and brand image. Brand awareness is related to the strength of the brand under different conditions. It is necessary, but not always sufficient, step in building brand equity.

Brand image is consumers’ perceptions about a brand, as reflected by the brand associations held in consumer memory. In other words, brand associations held in consumer memory. In other words, brand associations are the other informational nodes linked t the brand node in memory and contain the meaning of the brand for consumers.  Association may reflect the characteristic of the product.

For example, Apple computers, if someone asked you that what came to your mind when you thought of Apple computers, what would you say? You might reply with associations, such as “user friendly”, “creativity” and used at many school. Other brand like Mc Donald, for example, has its own marketing program that use to create brand associations in consumers’ mind between its products and “quality, “service”, “cleanliness”, and “value”. While coca cola, another example, has their marketing program that tries to link brand association in consumers’ mind  to “ refreshment,” “taste”,””availability” and “affordable”.

Four Steps of brand building

1.       Ensure identification of the brand with customers and an association of the brand in customer’s minds with a specific customer need.

4         Firmly establish the totality of brand meaning in the minds of customers by strategically linking a mass of tangible and intangible brand associations with certain properties.

5         Extract the proper customer responses to this brand identification and brand meaning

6         Convert brand response to create an intense active loyalty relationship between customers and the brand.

Brand identity

Brand Salience Dimensions

Brand salience measures awareness of the brand awareness, for example, how often the brand is reminded under various situation and circumstances. To what extent is the brand top-of-mind and easily recalled or recognised? We have said that brand awareness refers to customers’ ability to recall and recognise the brand under different conditions and to link the brand name and easily the brand is bringing to mind. We have said that brand awareness refers to customers’ ability to recall and recognise the brand under different conditions and to link the brand mane, logo, symbol, and so forth to certain associations in memory.

Salience forms the foundational building block in developing bran equity and provides three important functions. 1) Salience influences the strength of brand associations that make up the brand image and gives the brand meaning. 2) By creating high brand salience in term of need satisfied is very important as brand salience influence that the brand will be a member for the consideration set for consumer.3) When consumers want to buy “ low involvement”  product they may make their choices based on brand salience alone.

Brand awareness thus gives the product an identity by linking brand elements to a product category and associated purchase and consumption. The depth of brand awareness measures how likely it is for a brand element to come to mind, and the ease with which it does so.

A brand we easily recall has a deeper level of brand awareness that one that we recognise only when we see it. The breath of brand awareness measures the range of purchases and usage situations in which the brand element comes to mind and depends to large extent on the organisation of brand and product knowledge in memory.

Brand Meaning

Brand Performance Dimensions

Brand performance describes how well the product or service meets customers’ more functional needs. How well does the brand rate on objective evaluation of quality? To what extent does the brand satisfy customer needs and wants in the product or service category?

Brand performance transcends the product’s ingredients and features to include dimensions that differentiate the brand. Often, the strongest brand positioning relies on performance advantages of some kind, and it is rare that a brand  can overcome severe performance insufficiency. There are five important of attributes and benefits often underlie brand performance:

1.       Primary characteristic and secondary features. Customer often have believed about the level at which the primary ingredients of the product operate (low, medium, high, or very high). They may also hold beliefs about special, perhaps even patented, features or secondary elements of a product that complement these primary characteristics.

2.       Product reliability, durability, and serviceability. Reliability measures the consistency of performance over time and from purchase to purchase. Durability is the expected economic life of the product, and serviceability refers to the ease of servicing the product if it needs repair.

3.       Service effectiveness, efficiency, and empathy. Customers often have performance related associations with the service interactions they have with brands. Along those lines, service effectiveness refers to how completely the brand satisfies customers’ service requirements. Service efficiency refers to the manner in which these services are delivered in terms of speed, and responsiveness. Finally, service empathy refers to the extent to which service providers are seen as trusting, caring, and having the customer’s interests in mind.

4.       Style and design. Consumers may associations with a product that go beyond its functional aspects to more aesthetic considerations such as its size, shape and colour. Therefore, performance may also depend on sensory aspects, such as how a product looks and feels and perhaps even what it sounds or smells like.

5.       Price. Finally, the pricing policy for the brand can create associations in consumers’ minds to the relevant price tier or level for the brand in the category, as well as to its corresponding price volatility. In other words, the pricing strategy  adopted for a brand can dictate how consumers categorise the price of the brand ( low, medium , or high) and how firm or flexible that price is perceived to be , for example, frequently or infrequently discounted).

Brand performance thus surpasses the "ingredients" that make up the product or service to include aspects of the brand that augment these ingredients. Any of these different performance dimensions can serve as a means by which the brand is differentiated. Often, the strongest brand positioning involves performance advantages some kind, and it is rare that a brand can overcome severe insufficiency in this area.

Brand Imagery Dimensions

The other main type of brand meaning involves brand imagery. Brand imagery deals with the extrinsic proper ties of product or service, including the ways in which the brand attempts to meet customers’ psychological or social needs. Brand imagery is how people think about a brand abstractly rather than what they think the brand actually does. Therefore, imagery refers to more intangible aspects of the brand.

Many different kinds of intangibles can be linked to a brand, but four categories can be highlighted:

1. User profiles

One set of brand imagery associations involves the type of person or organisation who uses the brand. This imagery may result in a profit or mental image by customers of actual users or more ambition, idealized users. Associations of typical or idealised brand user may be based on descriptive demographic factors might include gender, age , race, and income. Psychographic factors might include attitudes toward like, careers and social issues. In a business-to-business setting, user imagery might relate to the size or type of the organisation. User imagery may focus on the characteristic of more than just one type of individual and centre on broader issues in terms of perceptions of a group as a whole. For example, customers may believe that a brand is used by many people and therefore view the brand as “popular” or a “market leader.”

2.Purchase & usage situations

A second set of association concerns the conditions under which the brand could or should be bought and used. Association of a typical purchase situation may be based on a number of different considerations, such as (1 ) type of channel ( for example, specialty store, or direct through Internet or some other means)  (2) Specific store ( for example, Macy’s, Foot Locker) and (3) ease of purchase and associated rewards, if any. Similarly, associations of a typical usage situation may be based on a number of different considerations, such as: (1) time of the day, week, month, or year when the brand is used ( for example, formal or informal).

3.Personality & values

Brands may also take on personality traits and values similar to those of people. Brand personality is often related to the more descriptive usage imagery but involves much richer information. Five dimensions of brand personality that have been identified are (1) Sincerity (for example, honest and cheerful). (2) Excitement (for example, spirited and imaginative). (3) Competence (ability and skill): for example reliable, intelligent and successful). (4) Sophistication (complexity) (for example, upper class and charming); ruggedness (difficulty) ( for example tough).

4.History, heritage (tradition) , and experiences

Brands may take on associations with their past and certain important events in the brand history. These types of associations may involve distinctly personal experience, or be related to the past behaviour and experiences of friends, family or others.  Consequently, these types of associations may be fairly characteristic, although they sometimes show certain commonalties. Alternatively, these associations may be more public and broad-based and therefore will be shared to be large degree. In either case , associations with history, tradition and experiences involve more specific , real examples that go beyond the generalisations that makes up the usages imagery.

Key criteria for Brand Meaning

A number of different types of associations related to performance and imagery may become linked to the brand. Regardless of the type of involved, the brand associations that make up the brand image and meaning can be characterised according to three important dimensions: 1) Strength; how strong is the brand identifies with a brand association? 2) Favourability: how important is the brand association to customers? 3)  Uniqueness: how unique is the brand identified with the brand association? Successful result in this three dimensions produce the most positive brand responses and increase brand loyalty,. In order to create strong brand equity, consumer must evaluate the association favourably and they actually recall brand association and link it to the brand.

Brand response

Judgment Dimensions

Brand judgment focus upon customers’ personal opinions and evaluation with regard to the brand. Brand judgement involves how consumer put together all the different performance and Margery associations for the brand to form different kind of opinions. Customers may make all types of judgments with respect to a brand, but in terms of creating a strong brand, four types of summary brand judgments are particularly important ( and are cited in ascending order of importance):

1. Brand quality

There are host of attitudes that customers may hold toward brands, but most important relate in various ways to perceived quality of the brand. Other notable attitudes related to quality pertain to perceptions of value and satisfaction.

2. Brand credibility (reliability)

Customer m ay form judgments that transcend specific brand quality concerns to consider broader issues related to the company or organisation making the product or providing the service associated with the brand. In other words, customers may form judgments with respect to the company behind the brand the brand. Brand credibility refers to the company or organisation behind the brand. Brand credibility refers to the extent to which the brand as a worthiness, and likability. In other words, to what extent to which the brand as a whole is seen as credible in terms of three dimensions – perceived expertise, trustworthiness, and likability. In other words, to what extent is the brand seen as: (1) innovative and market leader (brand expertise) ; (2) reliable and sensitive to the interests of customers ( rand trustworthiness) : and  (3) fun , interesting, and worth spending time with ( brand likability).

3. Brand consideration

Bring out favourable brand attitudes and perceptions of reliability are important but may be insufficient if customers do not actually seriously consider the brand for possible purchase or usage. Consideration is more than only awareness, it suggest the possibility  that consumer will actually buy the brand among a set of brand  Consideration depends in part on how personally relevant customers find the brand , the extent to which they view the brand as being  meaningful for themselves. Therefore, consumer often make an overall evaluation as to whether they have any personal interest in a brand and whether they should ever buy the brand . No matter how  credible a brand may be, unless the brand has receives serious consideration, and is think relevant , customers will always depend In large part on the extent to which strong and favourable brand associations can be created as part of brand image.

4. Brand superiority (power)

Superiority relates to extent to which customers view the band as unique as and better than other brands. In other words, do customers believe that the brand offers advantages that other brands do not offer? Superiority is absolutely important in term of building strong customer relation and will depend on the number of unique brand associations that make up brand image.

Brand feeling dimension

Brand feelings are consumers’ emotional response and reaction with respect to the brand. Brand feelings also relate to the social currency remind by the brand. What feeling is reminded by the marketing program for the brand? How does the brand affect consumer feeling about themselves and their relationship with other these type of feeling can be positive or nature. There are six important types of brand building feelings:

1.       Warmth. It refers to peaceful type of feelings- the extent to which the brand makes consumers feel a sense of peacefulness. Consumers may feel warm-hearted or friendly about the brand.

2.       Fun. The feeling of fun is also positive types of feelings. Consumers may feel smiling, playful, cheerful, and happy about the brand.

3.       Excitement. It relates to the extent to which the brand makes consumers feel that they are energized, and experiencing something special. Brands that make consumers have the feeling of excitement may result consumer feel cool and sexy.

4.       Security. It is the feeling occur when the brand produces a feeling of safely, comfort. Also consumer may have the security feeling when the brand can help to elimination of worries.

5.       Social approval. This kind of feeling occurs when the brand results in consumers’ feeling positively about the reactions for others to them, when consumers feel that others look favourably on their appearance and behaviour. This approval may result from others direct acknowledge of the consumer using the brand or, less clearly, from attributing the product itself to consumer. For example, the Mercedes is a brand that may signal social approval to consumer.

6.       Self-respect. It the feeling when the brand makes consumers feel better about themselves, for examples, when consumers feel a sense of pride, achievement, or fulfilment.

Key criteria for brand responses

Brand response is something that is important that they are readily come to consumer mind when they think go the brand. brand judgments and feelings can favourably impact consumer behaviour only if consumer think of positive responses in their meet with the brands.

Brand relationships

Resonance (quality or meaning) Dimensions

Brand resonance refers to the nature of the relationship that customers have the brand and the extent to which they feel that they are familiar with the brand.

Brand resonance is characterised in term of intensity or the depth of the psychological bond that customers have with the brand as well as the level of activity engendered by this loyalty  ( for example repeat purchase rates, the extent to which customers seek out brand information, events, other loyal customer).

Specifically, brand resonance can be categorised in 4 categories:

1.       Behaviour loyalty. Behavioural loyalty in terms of repeat purchases and the amount, or share, of category volume attributed to the brand. In other words, how often do customers purchase a brand and how much do they purchase? For outcome of profit result, the brand must generate sufficient purchases frequencies and volume.

2.       Attitudinal attachment (addition) : behavioural loyalty is necessary but not sufficient for resonance to occur. Some customers may buy out of necessity, for example, because the brand is the only product being stocked or reliability accessible, or the only one they can afford to buy. To create resonance, a strong personal attachment is also necessary. Consumers must go beyond simply having positive attitude to view the brand as being something special In a broader context. For example, customers with a great deal of attitudinal attachment to a brand may state that they “ love” the brand, describe it as one of their favourite possessions, or view it as a “ little pleasure” that they look forward to.

3.       Sense of community. The brand may also take on broader meaning to the customer in terms of sense of community. Identification with a brand community may reflect an important social phenomenon whereby customers feel a relationship with other people linked with the brand. These connections may involve fellow brand user or customer, employees.

4.       Active engagement (appointment and meeting). Perhaps the strongest confirmation of brand loyalty occurs when customers are willing to invest time, energy, or money into brand beyond those expended during consumption of the brand. For example, consumers may choose to join a club on a brand, receive updates, and exchange correspondence with other brand users. They may also choose to visit brand-related websites, participate in chat rooms. In this case, customers themselves become brand evangelists and ambassador on behalf of the brand, communicate about the brand, and strengthen the brand ties of others. Strong attitudinal attachment or sense of community is typically necessary for active engagement with the brand to occur.

Key criteria for brand relationships

Brand relationships can usefully be characterised in terms of two dimension –intensity and activity. Intensity refers to the strength of the sense of community and attitudinal attachment and sense of community. Activity refers to how frequently the consumer buys and uses the brand, as well as engaged with other activities that are not related to purchase or consumption.