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Collectively, there are 3 models that help marketers devise branding strategies and tactics to maximise profits and lt brand equity and track their progress along the wat.
- Brand positioning model: how to establish competitive advantage in the minds of customers in the marketplace
- Brand resonance model: how to take these competitive advantages and create intense, active loyalty relationships with customers of brands
- Brand value chain model: how to trace the value creation process to better understand the financial impact of marketing expenditures and investments to create loyal customers and strong brands We will concentrate on the brand positioning model, which also involves the concept of customer based brand equity (CBBE).
Positioning requires defining our desired or ideal brand knowledge structures and establishing points- of-parity and points-of-difference to establish the right brand identity and brand image. Unique, meaningful points-of-difference (POD) provide a competitive advantage and the “reason why” consumers should buy the brand. On the other side, points-of-parity (POP) provide associations and comparisons with competing brands, to provide “no reason why not” for consumers to choose the brand.
Customer-based brand equity
What makes a brand strong? How do you build a strong brand? To be able to answer both questions we have to define CBBE
Defining CBBE The CBBE concept approaches brand equity from the perspective of the consumer; understanding the needs and wants of consumers and organizations and devising products and programs to satisfy them are at the heart of successful marketing. The basic premise of the CBBE concept is that the power of a brand lies in what customers have learnt, felt, seen and heard about the brand as a result of their experience over time.
The power of a brand lies in what resides in the minds and hearts of customers
The formal definition of the CBBE is the differential effect that brand knowledge has on consumer response to the marketing of a brand; CBBE can be either positive or negative. There are three key ingredients to this definition:
- Differential effect: brand equity arises from differences in consumer response; if no difference occurs, the product can be classified as commodity or generic version of the product
- Brand knowledge : these differences in response are a result of consumers’ knowledge about the brand (they have learnt, felt, seen, heard about the brand as the result of experience over time). Brand equity ultimately depends on what resides in the minds and hearts of consumers.
- Consumer response to marketing: customer responses are reflected in perceptions, preferences and behaviour responses related to all aspects of brand marketing.
Blind tests are the simplest way to illustrate what we mean by CBBE.
Brand equity as a bridge According to CBBE concept, customer knowledge drives the differences that manifest themselves in terms of brand equity. Brand equity provides marketers with a vital strategic bridge from their past to their future.
- Brands as a reflection of the past: the quality investment in brand building is the most critical factor, not the quantity. (for example, manufacturing and marketing should be counted as an
Customer-Based Brand Equity and Brand Positioning
investment, not an expense, towards what consumer hear, learnt, felt and experienced about the brand). Some brands considerably outspend but amass a great deal of brand equity, enduring as memory traces in the mind of consumers.
- Brand as a direction to the future: the brand knowledge that marketers create over time dictates appropriate and inappropriate future directions for the brand. At the end of the day, the true value and future prospects of a brand rest with consumers and their knowledge about the brand. Brand equity’s value depends on how marketers use it; it may provide guidance or offer focus. Other factors that influence brand success are employees, suppliers, channel members, media and government.
Making a brand strong: brand knowledge
From the perspective of CBBE concept, brand knowledge is the key to creating brand equity because it creates differential effect that drives brand equity.
The associative network memory 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 nodes; any time of info can be stored in the memory network. We can consider knowledge as having two components:
- Brand awareness: related to the strength of the brand node or trace in memory which we can measure as the consumers’ ability to identify the brand under different conditions
- Brand image : brand image is the consumers’ perception about a brand, as reflected by the brand associations held in consumer memory; brand associations are other informational nodes linked to the brand nodes in memory and contain the meaning of the brand for consumers.
Sources of brand equity
CBBE occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favourable, and unique associations in memory. Sometimes, brand awareness alone is enough to create favourable consumer response however, in most cases, the strength, uniqueness and favourability of brand associations play a critical role in determining the differential response that makes up brand equity.
Brand awareness Brand awareness consists of brand recognition and brand recall performance.
- Brand recognition : consumers’ ability to confirm prior exposure to the brand when given the brand as a clue
- Brand recall : consumers’ ability to retrieve the brand from memory when given the product category, the needs fulfilled by the category, or a purchase or usage situation as a clue. If the research reveals that many consumers decisions are made at the point of purchase, where brand name, logo, packing and so on will be physically present and visible, then brand recognitions will be important. Note, however, that even though brand recall may be less important at the point of purchase, consumers’ brand evaluations and choices will still often depend on what else they recall about the brand given that they are able to recognize it there.
The advantages of brand awareness are:
- Leaning advantages: brand awareness influences the information and strength of the associations that make up the brand image. The first step is building brand equity is to register the brand in the minds of consumers.
Customer-Based Brand Equity and Brand Positioning
order to create the differential response, marketers need to make sure that some strongly held brand associations are not only favourable but also unique and not shared with competing brands. Let’s consider some factors that affect the strength, favourability and uniqueness of brand associations:
- Strength of Brand Association: the more deeply a person thinks about product information and relates it to existing brand knowledge, the stronger resulting brand associations will be; two factors that strengthen association to any piece of information are its personal relevance and the consistency with which it is presented over time. In general, direct experiences create the strongest rand attribute and benefit associations and are particularly influential in consumers’ decisions when they accurately interpret them. Information can be retrieved through WOM (strongest for some sectors), company-influenced sources of information (weak association – to overcome this, use creative communication).
- Favourability of brand association: marketers create it by convincing consumers that the brand possesses the relevant attributes and benefits that satisfy their needs and wants, such that they form positive overall brand judgement. Brand associations will not be considered equally by the consumer, because they may be situation- or context-dependent.
- Uniqueness of brand association: the essence of brand positioning is that the brand has sustainable competitive advantage or “unique selling proposition” that gives consumers a compelling reason why they should buy it. Marketers can make this unique difference explicit through direct comparisons with competitors, or they may highlight it implicitly; it may be based on performance-related or non-performance-related attributes or benefits. - Unless a brand has no competitors, it will share some characteristics with other products; this is useful to define category membership. These categories can also share a set of attributes and beliefs which may include performance-related attributes as well as descriptive attributes. Among the categories, consumers may recognize one brand as being exemplar to all others.
Identifying and establishing brand positioning
Basic concepts Brand positioning is at the heart of marketing strategy; it means to find the proper “location” in the minds of a group of consumers or market segment, so that they think about a product or service in the “right” or desired way to maximize potential benefit to them. Good brand positioning helps guide marketing strategy by clarifying what a brand is all about, how it is unique and how it is similar to competitive brands. Positioning is done through: (1) identifying the target consumer, (2) the main competitors, (3) how similar the brand is to its competitors, (4) how different the brand is to its competitors.
Target market Identifying the consumer target is important because different consumers in the market may have different brand structures and thus different perceptions and preferences for brands.
A market is the set of all actual and potential buyers (interest, income and access to product) while the market segmentation divides the market into distinct groups of homogeneous consumers (requires trade-offs between costs and benefits).
We classify the segmentation bases as descriptive or consumer-oriented, or as behavioural or product- oriented; behavioural segmentation bases are often most valuable in understanding branding issues because they have clear strategic implications.
Customer-Based Brand Equity and Brand Positioning
Given market segmentation scheme, marketing programs could be put into place to attract one or more segments. Other segmentation approaches build on brand loyalty in some way; the “funnel” model traces consumer behaviour in terms of initial awareness through brand-most-often-used. For purposes of brand building, marketers want to understand both (1) the percentage of target market that is present at each stage and (2) factors facilitating or inhibiting the transition from one stage to the next. (the salience of products may need to be raised to increase the attractiveness of products).
Even though marketers often segment consumers by behaviour, broad demographic descriptors may mask important underlying differences. The main advantage of demographic segmentation bases is that the demographics of traditional media vehicles are generally well known from consumers research.
The criteria are a guide for segmentation target market decisions: identifiability, size, accessibility, responsiveness. However, the obvious overriding consideration in defining marketing segments is profitability which, in some cases, can be related to behavioural considerations.
Nature of competition Deciding to target a certain type of consumer often defines the nature of competition, because other firms have also decided to target the segment in the past or plan to do so in the future, or because consumers in that segment already may look to other brands in their purchase decisions. Competition takes also place at distribution level and competitive analysis considers s whole host of factors.
Taking into account indirect competition allows not to consider competition too narrowly. In fact, research shows that even if a brand does not face direct competition (and thus does not share performance-related attributes with other brands) it can still share more abstract associations and face indirect competition in a more broadly defined product category.
- Competition often occurs at benefit level rather than at attribute level: luxury good with strong hedonic value like stereo equipment may compete as much with a vacation, as with other durable goods like furniture; educational software maker with books, tv, radio, mags
- Many firms narrowly define competition or fail to recognize threats and opportunities.
Many firms adopt multiple frames of reference , which may be the result of broader category competition or the intended future growth of a brand, or it can occur when the same function ca be performed by different types of products. This involves also looking at POP and POD: some of them may be shared across all competitors while some others may be unique to a particular competitor. If there are too many competitors in different categories or subcategories, it may be useful to either develop the positioning at the categorical level for all relevant categories or with an exemplar from each category.
Point-of-parity and points-of-difference Target and competitive frame of reference chosen will dictate the breadth of brand awareness and the situation and types of cues that should become closely related to the brand. Once marketers have fixed the appropriate competitive frame of reference for positioning by defining customer target market and the nature of competition, they can define the basis of the positioning itself. Arriving at the proper positioning requires the correct POP and POD
- Points-of-difference associations: PODs are attributes or benefits that consumer strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand; we can define associations as either functional, performance related or abstract, imagery-related. A host of different PODs are generally defined in terms of consumer benefits, which can be defined as reasons-to-believe (RTBs) and they come in many different forms: functional design concerns, key attributes, key ingredients, key
Customer-Based Brand Equity and Brand Positioning
A brand must offer compelling and credible reason for choosing it over its options. To function as a POD, consumers ideally would see the attribute or benefit as highly important, feel that the company can deliver it and convinced that no other brand can deliver the same. There are three key criteria to consider:
- Desirability criteria: determined by the consumers point of view; consumers must find POD personally relevant and important. Just being different is not enough.
- Deliverability: based on a company’s inherent capabilities; the deliverability of an attribute or benefit brand association depends on both the company actual ability to make the product/ service (feasibility) and the effectiveness in convincing consumers of their ability (communicability): - Feasibility: production and marketin must be designed in a wy to support the desired POD (perhaps the most effective approach is to point to a unique attribute of the product as a RTB to convince customers that the firm is able to supply the benefit). When POD is abstract, support for the claim may reside in more general association to the brand. - Communicability: the key issue here is consumers’ perceptions of the brand and the resulting association; RTBs are critical for consumer acceptance of a potential POD.
- Differentiation: determined relative to competitors; target consumers must find POD distinctive and superior. Sustainability depends on internal commitment and use of resources as well as external market forces.
2B. Establishing POPs and PODs The key to branding success is to establish both POPs and PODs. One of the challenges in positioning is the inverse relationships that may exist in the minds of many consumers; marketer have to know how to deal with trade-offs and positioning is no different.
Several additional ways exist to address the problem of negatively correlates POPs and PODs:
- Separate the attributes: launching two different marketing campaigns, each devoted to a different brand attribute or benefit; the hope is that consumers will be less critical when judging POPs and PODs benefits in isolation, because the negative correlation maybe less apparent.
- Leverage equity of another entity: brands can link themselves to any kind of entity that possesses the right kind of equity as a means to establish an attribute or benefit as a POP or POD.
- Redefine the relationship: convince consumers that in fact, the relationship between attributes and benefits is positive. Although difficult to achieve, such strategy can be powerful.
Straddle positions Occasionally a company will be able to straddle two frames of reference with one set of PODs and POPs. In these cases, the POD in one category become the POP in the other and vice-versa. While straddle positioning is often attractive as a means of reconciling potential conflicting consumer goals, it also carries an extra burden as consumers may not view the brand as a legitimate player in either categories.
Updating position over time Positioning will evolve over time to better reflect market opportunities or challenges. Laddering and reacting reflect in turn one common opportunity and one common challenge.
- Laddering: once the target market attains a basic understanding of how the brand relates to alternatives in the same category, it may be necessary to deepen the meanings associated with the brand positioning. We can take into consideration Maslow’s hierarchy of needs because marketers have also recognized the importance of high-level needs (through means-end chains ). Means-end chains take the following structure: attributes lead to benefits which in
Customer-Based Brand Equity and Brand Positioning
turn lead to values. Some attributes and benefits may lend themselves to laddering better than others.
- Reacting: competitive actions are often directed at eliminating POD to make them POP or to strengthen or establish new PODs. When a competitor challenges an existing POD or attempts to overcome POP, there are 3 options: - Do nothing - Go on defensive (ex. adding some reassurance in the product or advertising to strengthen POP and POD) - Go on offensive (ex. launch new product extension or ad campaign that fundamentally changes the meaning of the brand) Developing a good positioning Firstly, a good positioning has a “foot in the present” and a “foot in the future”. Secondly, a good position is careful to identify all relevant POP Thirdly, a good positioning should reflect a consumer point of view in terms of benefits that consumer derive from the brand Fourthly, it is important that a duality exists in the positioning of a brand such that there are rational and emotional components.
Defining a brand mantra
Brand positioning describers hoe a brand ca effectively compete against a specified set of competitors in a particular market. As brands evolve and expand across categories, marketers will want to craft a brand mantra that reflects the essential “heart and soul” of the brand.
Brand mantras
A brand mantra is a short three- to five-word phrase that captures the irrefutable essence or spirit of the brand positioning.
It is similar to the “brand essence” or “core brand premise”, and its purpose is to ensure that all employees and external marketing partners understand what the brand is to represent to consumers so that can adjust their actions accordingly. Brand mantras are powerful devices as they can provide guidance about what products to introduce under the brand, ad campaigns to run, where and how the brand should be sold; they also create a mental filter of what to expect or avoid. Brand mantras help the brand present a consistent image because any time the consumer encounters a brand, his or her knowledge about that brand may change and affect the equity of the brand
Designing a brand mantra Brand mantras must communicate what the brand is and what it is not, and it should have 3 characteristics:
- Brand functions: the nature of the product or service or the type of experiences or benefits the brand provides. It can range from concrete language to more abstract notions where the term is related to higher-order experiences or benefits that a variety of different products could deliver
- Descriptive modifier: further classifies its nature; combined, brand function and descriptive modifier help delineate the brand boundaries
- Emotional modifier: provides another qualifier. Emotional modifier Descriptive modifier Brand function Nike Authentic Athletic Performance Disney Fun Family Entertainment
Customer-Based Brand Equity and Brand Positioning
