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Building Customer-Based Brand Equity:

A Blueprint for Creating Strong Brands

Kevin Lane Keller

M A R K E T I N G S C I E N C E I N S T I T U T E

W O R K I N G P A P E R S E R I E S

W O R K I N G P A P E R • R E P O R T N O. 0 1 - 1 0 7 • 2 0 0 1

Building Customer-Based Brand Equity:

A Blueprint for Creating Strong Brands

Kevin Lane Keller

M A R K E T I N G S C I E N C E I N S T I T U T E

W O R K I N G P A P E R S E R I E S

W O R K I N G P A P E R • R E P O R T N O. 0 1 - 1 0 7 • 2 0 0 1

M A R K E T I N G S C I E N C E I N S T I T U T E • R e p o r t S u m m a r y # 0 1 - 1 0 7

Building Customer-Based Brand

Equity: A Blueprint for Creating

Strong Brands

Kevin Lane Keller

Building a strong brand has been shown to provide numerous financial rewards to firms, and has become a top priority for many organizations. In this report, author Keller outlines the Customer-Based Brand Equity (CBBE) model to assist manage- ment in their brand-building efforts.

According to the model, building a strong brand involves four steps: (1) establish- ing the proper brand identity, that is, establishing breadth and depth of brand awareness, (2) creating the appropriate brand meaning through strong, favorable, and unique brand associations, (3) eliciting positive, accessible brand responses, and (4) forging brand relationships with customers that are characterized by intense, active loyalty. Achieving these four steps, in turn, involves establishing six brand-building blocks—brand salience, brand performance, brand imagery, brand judgments, brand feelings, and brand resonance.

The most valuable brand-building block, brand resonance, occurs when all the other brand-building blocks are established. With true brand resonance, customers express a high degree of loyalty to the brand such that they actively seek means to interact with the brand and share their experiences with others. Firms that are able to achieve brand resonance should reap a host of benefits, for example, greater price premiums and more efficient and effective marketing programs.

The CBBE model provides a yardstick by which brands can assess their progress in their brand-building efforts as well as a guide for marketing research initiatives. Accordingly, a set of candidate measures for the six brand-building blocks is included in the appendix. In addition, a critical application of the CBBE model is in planning, implementing, and interpreting brand strategies. The model provides a comprehensive means of covering important branding topics, as well as useful insights and guidelines to help marketers set strategic direction and inform their brand-related decisions. To provide perspective, the paper also relates the CBBE model to other leading models of brand equity.

Kevin Lane Keller is E. B. Osborn Professor of Marketing at the Amos Tuck School of Business, Dartmouth College.

1000 Massachusetts Avenue • Cambridge, MA 02138 USA • 617.491.2060 • www.msi.org

Introduction

Building a strong brand is the goal of many organizations. Building a strong brand with significant equity is seen as providing a host of possible benefits to a firm, including greater customer loyalty and less vulnerability to competitive marketing actions and marketing crises, larger margins as well as more favorable customer response to price increases and decreases, greater trade or intermediary cooperation and support, increased marketing communication effectiveness, and licensing and brand-extension opportunities.

With this keen interest in brand building, two questions often arise: (1) What makes a brand strong? and (2) How do you build a strong brand? To help answer both of these questions, this paper develops a model of brand building called the Customer-Based Brand Equity model. Although a number of useful perspectives concerning brand equity have been put forth, the Customer-Based Brand Equity model provides a unique perspective on what brand equity is and how it should best be built, measured, and managed.

The development of the Customer-Based Brand Equity model was driven by three goals. First, the model had to be logical, well-integrated, and grounded. The model needed to reflect state-of-the-art thinking about branding from both an academic and industry point of view. Second, the model had to be versatile and applicable to all possible kinds of brands and industry settings. As more diverse applications of branding continued to emerge for products, services, organizations, people, places, and so forth, the model needed to have far-ranging relevance. Third, the model had to be comprehensive with enough breadth to cover important branding topics as well as enough depth to provide useful insights and guidelines. The model needed to help marketers set strategic direction and inform their brand-related decisions.

With this broad set of objectives in mind, the Customer-Based Brand Equity model was developed. The basic premise of the model is that the power of a brand lies in what customers have learned, felt, seen, and heard about the brand over time. In other words, the power of a brand resides in the minds of customers. The challenge for marketers in building a strong brand is ensuring that customers have the right type of experiences with products and services and their accompanying marketing programs so that the desired thoughts, feelings, images, beliefs, percep- tions, opinions, and so on become linked to the brand. The remainder of the paper outlines in detail how this “brand knowledge” should be created and how the brand-building process should be handled.

The Four Steps of Brand

Building

Building a strong brand, according to the Customer-Based Brand Equity model, can be thought of in terms of a sequence of steps, in which each step is contingent upon the successful completion of the previous step. All steps involve accomplish- ing certain objectives with customers, both existing and potential. The first step is to ensure identification of the brand with customers and an association of the brand in customers’ minds with a specific product class or customer need. The sec- ond step is to firmly establish the brand meaning in the minds of customers by strategically linking a host of tangible and intangible brand associations. The third step is to elicit the proper customer responses to this brand identity and brand meaning. The fourth and final step is to convert brand response to create an intense, active loyalty relationship between customers and the brand.

These four steps represent a set of fundamental questions that customers invariably ask about brands, implicitly if not explicitly:

Who are you? (brand identity)

What are you? (brand meaning)

What about you? What do I think or feel about you? (brand responses)

What about you and me? What kind of association and how much of a con- nection would I like to have with you? (brand relationships)

There is an obvious sequence in this “branding ladder,” that is, meaning cannot be established unless identity has been created; responses cannot occur unless the right meaning has been developed; and a relationship cannot be forged unless the proper responses have been elicited.

Figure 2. Subdimensions of Brand-Building Blocks

Brand Identity Brand Salience. Achieving the right brand identity involves creating brand salience. Brand salience relates to aspects of customer awareness of the brand. How easily and often is the brand evoked under various situations or circumstances? To what extent is the brand top-of-mind and easily recalled or recognized? What types of cues or reminders are necessary? How pervasive is brand awareness?

Formally, brand awareness refers to customers’ ability to recall and recognize a brand. Brand awareness is more than just the fact that customers know a brand name and the fact that they have previously seen it, perhaps even many times. Brand awareness also involves linking the brand—brand name, logo, symbol, and so forth—to certain associations in memory. In particular, building brand aware- ness involves making sure that customers understand the product or service catego- ry in which the brand competes. There must be clear links to other products or services sold under the brand name. At a broader, more abstract level, however, building brand awareness also means ensuring that customers know which of their needs the brand is designed to satisfy—through these products. In other words, what basic functions does the brand provide for customers?

Salience forms the foundational building block in developing brand equity and provides three important functions. First, salience influences the formation and strength of brand associations that make up the brand image and gives the brand meaning. Second, creating a high level of brand salience in terms of category iden- tification and needs satisfied is of crucial importance during possible purchase or consumption opportunities. Brand salience influences the likelihood that the brand will be a member of the consideration set, those handful of brands that receive serious consideration for purchase. Brand salience is also important during

Loyalty Attachment Community Engagement Quality Warmth Credibility Fun Consideration Excitement Superiority Security Social Approval Self-Respect Primary Characteristics & Secondary Features Product Reliability, Durability, & Serviceability Service Effectiveness, Efficiency, & Empathy Style & Design Price

User Profiles Purchase & Usage Situation Personality & Values History, Heritage, & Experiences

Category Identification Needs Satisfied

possible consumption settings in terms of maximizing potential usage. Third, when customers have “low involvement” with a product category, they may make choices based on brand salience alone. Low involvement occurs when customers lack either: (1) purchase motivation (e.g., when customers do not care about the product or service) or (2) purchase ability (e.g., when customers do not know any- thing else about the brands in a category or lack the expertise to judge quality even if they do know some things).

Key Criteria for Brand Identity

Brand awareness can be distinguished in terms of two key dimensions—depth and breadth. Depth of brand awareness refers to how easily customers can recall or rec- ognize the brand. Breadth of brand awareness refers to the range of purchase and consumption situations in which the brand comes to mind. A highly salient brand is one that possesses both depth and breadth of brand awareness, so that customers always make sufficient purchases as well as always think of the brand in a variety of settings in which the brand could be employed or consumed.

Thus, in terms of creating brand salience, in many cases it is not only the depth of brand awareness that matters, but also the breadth of brand awareness and the proper linkage of the brand to various categories and cues in the minds of cus- tomers. In other words, it is important that the brand not only be “top-of-mind” and have sufficient “mind share,” but it must also do so at the right times and right places.

Breadth is an often-neglected consideration, even for brands that are category lead- ers. With many brands, the key question is not whether customers can recall the brand, but rather, where do they think of the brand, when do they think of the brand, and how easily and often do they think of the brand? In particular, many brands and products are ignored or forgotten in possible usage situations. Increasing the salience of the brand in those settings can be an effective means to drive consumption and increase sales volume. For example, a potentially effective strategy for market leader Campbell’s Soup might be to ensure that its customers think of the soup during possibly overlooked consumption opportunities (e.g., as a sidedish at dinner).

Brand Meaning

Brand salience is an important first step in building brand equity, but is usually not sufficient in and of itself. For most customers in most situations, other consid- erations, such as the meaning or image of the brand, also come into play. Creating brand meaning involves establishing a brand image—what the brand is character- ized by and should stand for in the minds of customers. Although a myriad of dif- ferent types of brand associations are possible, brand meaning can broadly be dis- tinguished in terms of functional, performance-related considerations versus abstract, imagery-related considerations. Thus, brand meaning is made up of two major categories of brand associations that exist in customers’ minds—related to performance and imagery—with a set of specific subcategories within each. These brand associations can be formed directly—from a customer’s own experiences and

4. Style and design. Consumers may have associations with a product that go beyond its functional aspects to more aesthetic considerations such as its size, shape, materials, and color. Thus, performance may also depend on sensory aspects —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 con- sumers’ minds to the relevant price tier or level for the brand in the category, as well as to its corresponding price volatility or variance (in terms of the frequency or magnitude of discounts, etc.). In other words, the pricing strategy adopted for a brand can dictate how consumers categorize the price of the brand (e.g., low, medium, or high) and how firm or flexible that price is perceived to be (e.g., as frequently or infrequently discounted).

Brand performance thus transcends the “ingredients” that make up the product or service to encompass 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 advan- tages of some kind, and it is rare that a brand can overcome severe deficiencies in this area.

Brand Imagery. The other main type of brand meaning involves brand imagery. Brand imagery deals with the extrinsic properties of the product or service, includ- ing 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. Thus, imagery refers to more intan- gible 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 organization who uses the brand. This imagery may result in a profile or mental image by customers of actual users or more aspirational, idealized users. Associations of a typical or idealized brand user may be based on descriptive demographic factors or more abstract psychographic factors. Demographic factors might include gender, age, race, income, and marital status. Psychographic factors might include attitudes toward life, careers, possessions, social issues, or political institutions. In a business- to-business setting, user imagery might relate to the size or type of the organization. User imagery may focus on the characteristics of more than just one type of individ- ual and center on broader issues in terms of perceptions of a group as a whole. For example, customers may believe that a brand is used by numerous people and there- fore view the brand as “popular” or a “market leader.” 2. Purchase and usage situations. A second set of associations concerns the condi- tions under which the brand could or should be bought and used. Associations of a typical purchase situation may be based on a number of different considerations, such as: (1) type of channel (e.g., department store, specialty store, or direct through Internet or some other means); (2) specific store (e.g., Macy’s, Foot Locker, or Fogdog.com); 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; (2) place where the brand is used (e.g., inside or outside the home); and (3) type of activity for which the brand is used (e.g., formal or infor- mal).

3. Personality and values. Brands may also take on personality traits and values sim- ilar to those of people. Brand personality is often related to the more descriptive usage imagery but involves much richer, more contextual information. Five dimen- sions of brand personality (with corresponding subdimensions) that have been identified are: (1) sincerity (e.g., down-to-earth, honest, wholesome, and cheerful); (2) excitement (e.g., daring, spirited, imaginative, and up-to-date); (3) competence (e.g., reliable, intelligent, successful); (4) sophistication (e.g., upper-class and charming); and (5) ruggedness (e.g., outdoorsy and tough).^1 4. History, heritage, and experiences. Finally, brands may take on associations with their past and with certain noteworthy events in the brand history. These types of associations may involve distinctly personal experiences and episodes or be related to past behaviors and experiences of friends, family, or others. Consequently, these types of associations may be fairly idiosyncratic, although they sometimes exhibit certain commonalties. Alternatively, these associations may be more public and broad-based and therefore will be shared to a larger degree. In either case, associa- tions with history, heritage, and experiences involve more specific, concrete exam- ples that transcend the generalizations that make up the usage imagery.

Key Criteria for Brand Meaning

Thus, a number of different types of associations related to performance and imagery may become linked to the brand. Regardless of the type involved, the brand associations that make up the brand image and meaning can be character- ized and profiled according to three important dimensions:

Strength—How strongly is the brand identified with a brand association?

Favorability—How important or valuable is the brand association to customers?

Uniqueness—How distinctively is the brand identified with the brand association?

Successful results in these three dimensions produce the most positive brand responses, the underpinning of intense and active brand loyalty. To create brand equity, it is important that the brand have strong, favorable, and unique brand associations, in that order. In other words, it does not matter how unique a brand association is unless customers evaluate the association favorably, and it does not matter how desirable a brand association is unless it is sufficiently strong so that customers actually recall it and link it to the brand. At the same time, it should be recognized that not all strong associations are favorable and not all favorable associ- ations are unique.

that brand. Brand consideration is a crucial filter in terms of building brand equi- ty. No matter how highly regarded or credible a brand may be, unless the brand also receives serious consideration and is deemed relevant, customers will always keep a brand at a distance and never closely embrace it. Brand consideration will depend in large part on the extent to which strong and favorable brand associa- tions can be created as part of the brand image.

4. Brand superiority. Finally, superiority relates to the extent to which customers view the brand as unique and better than other brands. In other words, do cus- tomers believe that the brand offers advantages that other brands do not? Superiority is absolutely critical in terms of building intense and active relation- ships with customers and will depend to a great degree on the number and nature of unique brand associations that make up the brand image.

Brand Feelings. Brand feelings are customers’ emotional responses and reactions with respect to the brand. Brand feelings also relate to the social currency evoked by the brand. What feelings are evoked by the marketing program for the brand or by other means? How does the brand affect customers’ feelings about themselves and their relationship with others? These feelings can be mild or intense, positive or negative, in nature. There are six important types of brand-building feelings:^2

1. Warmth. Warmth refers to soothing types of feelings—the extent to which the brand makes consumers feel a sense of calm or peacefulness. Consumers may feel sentimental, warmhearted, or affectionate about the brand. 2. Fun. Feelings of fun are also upbeat types of feelings. Consumers may feel amused, lighthearted, joyous, playful, cheerful, and so on. 3. Excitement. Excitement relates to the extent to which the brand makes con- sumers feel that they are energized, and are experiencing something special. Brands that evoke feelings of excitement may result in a sense of elation or “being alive”; the customer may feel cool, sexy, and so forth. 4. Security. Security feelings occur when the brand produces a feeling of safety, comfort, and self-assurance in the customer, who associates the brand with the elimination of worries or concerns they might otherwise have felt. 5. Social approval. Social approval occurs when the brand results in consumers’ feeling positively about the reactions of others to them; that is, when consumers feel that others look favorably on their appearance, behavior, and so forth. This approval may result from others’ direct acknowledgement of the consumer using the brand or, less overtly, from attributing the product itself to consumers. 6. Self-respect. Self-respect occurs when the brand makes consumers feel better about themselves, for example, when consumers feel a sense of pride, accomplish- ment, or fulfillment.

The first three are experiential and immediate, increasing in level of intensity. The latter three are more private and enduring, increasing in level of gravity.

Key Criteria for Brand Responses

Although different types of customer responses—both “head” and “heart”—are possible, ultimately what matters is how positive these responses are. Additionally, it is important that they are accessible and readily come to mind when consumers think of the brand. Brand judgments and feelings can favorably impact consumer behavior only if consumers internalize or think of positive responses in their encounters with the brand.

Brand Relationships

Brand Resonance. The final step of the model, brand relationships, focuses upon the ultimate relationship and level of identification that the customer has with the brand. Brand resonance refers to the nature of the relationship that customers have with the brand and the extent to which they feel that they are “in synch” with the brand. Brand resonance is characterized in terms of intensity or the depth of the psychological bond that customers have with the brand as well as the level of activ- ity engendered by this loyalty (e.g., repeat purchase rates, the extent to which cus- tomers seek out brand information, events, other loyal customers, and so on). Specifically, brand resonance can be broken down into four categories:

1. Behavioral loyalty. The first dimension of brand resonance is behavioral 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 bottom-line profit results, the brand must generate sufficient purchase frequencies and volumes. 2. Attitudinal attachment. Behavioral loyalty is necessary but not sufficient for reso- nance to occur. Some customers may buy out of necessity—for example, because the brand is the only product being stocked or readily accessible, or the only one they can afford to buy, and so on. To create resonance, a strong personal attach- ment is also necessary. Customers must go beyond simply having a positive atti- tude to view the brand as being something special in a broader context. For exam- ple, customers with a great deal of attitudinal attachment to a brand may state that they “love” the brand, describe it as one of their favorite 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 cus- tomer in terms of a sense of community. Identification with a brand community may reflect an important social phenomenon whereby customers feel a kinship or affiliation with other people associated with the brand. These connections may involve fellow brand users or customers or, instead, employees or representatives of the company. 4. Active engagement. Finally, perhaps the strongest affirmation of brand loyalty occurs when customers are willing to invest time, energy, money, or other resources into the brand beyond those expended during purchase or consumption of the brand. For exam- ple, customers may choose to join a club centered on a brand, receive updates, and exchange correspondence with other brand users or formal or informal representa- tives of the brand itself. They may choose to visit brand-related websites, partici-