CHAPTER 2:

Customer-Based
Brand Equity and Brand Positioning
1. Brand positioning model- how to establish competitive advantage in the minds of
customers
2. Brand resonance- how to take these competitive advantages and create intense
active loyalty relationships with customers
3. Brand value chain model- how to trace the value creation process to better
understand the financial impact of marketing expenditure and investments

CUSTOMER BASED BRAND EQUITY

The power of the brand lies in what resides in the minds and hearts of customers.

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

Ingredients:
Differential Effect: It arises from differences in consumer response.
Brand Knowledge: The differences in response are result of consumers
knowledge of the brand.
Consumer response to marketing: Differential responses are reflected in
perceptions, preferences, and behavior related to all aspects of brand marketing.

Provides marketers with vital strategic bridge from their past to their future (Brand
Equity as a Bridge)
Create valuable, enduring memory traces in the minds of consumers (Brand Equity
as a Reflection of the Past)
True value and future prospects of a brand rest with consumers and their knowledge
about the brand (Brand as a Direction for the Future)

Making a Brand Strong: BRAND KNOWLEDGE

*Associative network model: views memory as a network of nodes and connecting links, in
which nodes represent stored information or concepts and links represent the
strength of association between the nodes
Two components of Brand Knowledge:
a. Brand awareness- strength of the brand node or trace in memory
b. Brand image- consumers perceptions about a brand as reflected by the brand
associations
Advantages of Strong Brands:
Improved perceptions of product
Less vulnerability to competitive
performance
marketing actions and to
Greater loyalty
marketing crises

Larger margins
More inelastic consumer response
to price increases
More elastic consumer response to
price decreases
Greater trade cooperation and
support

Increased marketing
communication effectiveness
Possible licensing opportunities
Additional brand extension
opportunities

SOURCES OF BRAND EQUITY:

CBBE occurs when the consumer has a high level of awareness and familiarity with
the brand and holds some strong, favorable, unique brand associations in memory.
Brand Awareness
Brand recognition: consumers ability to confirm prior exposure to the brand when
given the brand as a cue
Brand recall: consumers ability to retrieve the brand from memory when given the
product category, the needs fulfilled by the category, and the purchase usage
Advantages:
Learning
Choice
Consideration


ESTABLISHING BRAND AWARENESS
Exposure to various brand elements {name, logo, etc.}

-repetition increases recognizability

Creating linkages in memory to appropriate product categories or other consumption

cues

-important if product meaning of brand changes through extensions, mergers

or acquisitions

BRAND IMAGE

Brand Attributes: Descriptive features that characterize a product or service

Brand Benefits: Personal value and meaning that consumers attach to the product
or service attributes
Strength of Brand Associations: More deeply a person thinks about product
information and its relation to existing brand knowledge; stronger brand association
Factors: personal relevance, consistency of presentation
Favorability of Brand Associations: Marketers create favorable brand associations
by convincing consumers that the brand possesses relevant attributes and benefits
that satisfy their needs and wants to form overall positive judgments.
Uniqueness of Brand Associations: Unique associations help consumers make
better and easier choices in their purchases