L1 – What is a brand and why does it matter?
What is a brand?
Company perspective
Brands are valuable intangible asset that create reputation,
credibility and differentiation.
ð Brand equity contributes to customer acquisition,
retention, loyalty and Customer Lifetime Value (CLV)
Consumer perspective
Consumers do not see brands only in a rational or functional way. They can relate to brands
emotionally, symbolically and psychologically.
Brands as symbols and relationships
Consumers buy products not only because of what they do, but also because of what they
mean.
• Utilitarian motives = functional benefits
• Symbolic motives = what the product/brand says about the consumer
Symbolic consumption (Levy, 1959)
Brands can help consumers express who they are, who they want to be, which groups they
belong to, and how they want others to see them.
ð This is called self-signalling: consumers use brands to signal desired characteristics
such as intelligence, wealth, sustainability or physical activity.
Brand personality and relationships (Aaker, 1997 & Fournier, 1998)
Consumers can see brands as entities with personalities, feelings and characters. They can
therefore develop relationships with brands, ranging from casual/transactional relationships
to strong, intimate and loyal relationships.
Brand personality “rub-off” effect (Park & John, 2010)
The idea is that using a brand with an appealing personality can make consumers perceive
themselves as having similar characteristics.
• H1 (what): brand personality can “rub off” on consumers.
• H2 (when): the effect is stronger for entity theorists than incremental theorists.
• H3 (why): the effect occurs because consumers get signalling utility from the brand.
Results: women who carried a Victoria’s Secret handbag perceived themselves more
consistently with the brand’s personality, such as feminine, glamorous and good-looking.
Critical questions:
• Does the effect also happen when the brand is used privately?
• Does it influence actual behavior, or only self-perception?
• Can the effect sometimes backfire?
• Are loyal customers affected differently? And how long does the
effect last?
,Building brand knowledge
Brand knowledge = thoughts, feelings, experiences, memories and beliefs consumers have
about a brand.
Companies should create associations that are strong, positive and unique. These
associations are developed through marketing activities and consumers’ experiences with
the brand over time.
Why is brand knowledge important?
Strong brand knowledge helps a brand become: top-of-mind à consideration set à
automatic response.
When consumers encounter a brand cue, their existing associations can be activated
automatically. This can move consumers from System 2 (slow, cognitive thinking) towards
System 1 (fast, emotional/automatic responses).
A Coca-Cola executive once stated: “The reason Coca-Cola is so valuable is that of the
ideas, perceptions, and expectations about the brand that consumers all over the world
carry around in their heads. So much so that if the company were to lose all its production-
related assets in a disaster, it would survive, but if all consumers were to have a sudden
lapse of memory and forget everything related to Coca-Cola, the company would go out of
business.”
Priming: brands can influence behavior
Priming = exposure to a stimulus activates related concepts in memory, which can
subsequently influence behavior.
ð Brand elements such as logos can therefore activate the associations consumers have
with a brand.
Two types of priming
• Subliminal priming = the stimulus is presented below conscious awareness.
• Supraliminal priming = the stimulus is consciously perceived.
Trait-based / behavioral Goal-based / motivational
Leads to behavior consistent with the Activated concept becomes a goal
activated concept
Effect fades over time Effect can persist
Another concept can replace it Behavior continues until the goal is satisfied
No persistent motivation Motivation can become stronger over time
Automatic effects of brand exposure (Fitzsimons et al., 2008)
Participants were subliminally exposed to either an Apple or IBM logo. Afterwards, they had
to generate unusual uses for a brick.
• Creativity was measured by the number of ideas and the innovativeness/quality of
ideas.
• The researchers also tested whether the effect remained after a delay of about five
minutes, to investigate whether the priming effect was motivational.
, Results: people primed with Apple had more uses for the bricks and the ideas were also
more innovative. And this priming effect was motivational.
Critical questions:
• Who is most susceptible to priming?
• Does brand loyalty matter?
• Does Apple increase creativity, or does IBM decrease it?
• Are the findings still relevant today?
• How long do the effects last?
• Do priming effects replicate across different contexts?
Can exposure to brands have negative consequences? (Zhong & DeVoe, 2010)
The idea was that if you expose people to fast food brands, people make bad financial
choices or are ‘faster’. But this study did not replicate!
Customer-Based Brand Equity (CBBE)
AMA definition of a brand
Brand = a name, term, sign, symbol, design, or combination used to identify and
differentiate a seller’s products or services from competitors.
CBBE definition (Keller, 1993)
Customer-Based Brand Equity (CBBE) = the differential effect of brand knowledge on
consumer response to the marketing of the brand.
In simple terms: CBBE = how much consumers respond differently to a branded product
because of what they know about the brand.
ð Positive CBBE exists when consumers respond more favorably to a
branded product than to an identical unbranded/fictitious product.
Why do brands matter?
Brands have three primary functions:
1. Navigation: brands help consumers choose between many alternatives and reduce
search effort and search costs.
2. Reassurance: brands communicate expected quality, reduce uncertainty, reassure
consumers that they made the right choice, and can make product extensions easier.
3. Engagement: brands create symbolic value, emotional connections, and
identification with the brand.
Summary
• What is a brand? It depends on the perspective: company or consumer.
• Consumers are in relationship with brands and are influenced by brands personality
and associations.
• Companies should create positive, strong and favorable brand associations and plant
them in hearts and mind of consumers.
• CBBE: brand knowledge are the building blocks of CBBE that can automatically
influence consumer’s decision making and behavior.
What is a brand?
Company perspective
Brands are valuable intangible asset that create reputation,
credibility and differentiation.
ð Brand equity contributes to customer acquisition,
retention, loyalty and Customer Lifetime Value (CLV)
Consumer perspective
Consumers do not see brands only in a rational or functional way. They can relate to brands
emotionally, symbolically and psychologically.
Brands as symbols and relationships
Consumers buy products not only because of what they do, but also because of what they
mean.
• Utilitarian motives = functional benefits
• Symbolic motives = what the product/brand says about the consumer
Symbolic consumption (Levy, 1959)
Brands can help consumers express who they are, who they want to be, which groups they
belong to, and how they want others to see them.
ð This is called self-signalling: consumers use brands to signal desired characteristics
such as intelligence, wealth, sustainability or physical activity.
Brand personality and relationships (Aaker, 1997 & Fournier, 1998)
Consumers can see brands as entities with personalities, feelings and characters. They can
therefore develop relationships with brands, ranging from casual/transactional relationships
to strong, intimate and loyal relationships.
Brand personality “rub-off” effect (Park & John, 2010)
The idea is that using a brand with an appealing personality can make consumers perceive
themselves as having similar characteristics.
• H1 (what): brand personality can “rub off” on consumers.
• H2 (when): the effect is stronger for entity theorists than incremental theorists.
• H3 (why): the effect occurs because consumers get signalling utility from the brand.
Results: women who carried a Victoria’s Secret handbag perceived themselves more
consistently with the brand’s personality, such as feminine, glamorous and good-looking.
Critical questions:
• Does the effect also happen when the brand is used privately?
• Does it influence actual behavior, or only self-perception?
• Can the effect sometimes backfire?
• Are loyal customers affected differently? And how long does the
effect last?
,Building brand knowledge
Brand knowledge = thoughts, feelings, experiences, memories and beliefs consumers have
about a brand.
Companies should create associations that are strong, positive and unique. These
associations are developed through marketing activities and consumers’ experiences with
the brand over time.
Why is brand knowledge important?
Strong brand knowledge helps a brand become: top-of-mind à consideration set à
automatic response.
When consumers encounter a brand cue, their existing associations can be activated
automatically. This can move consumers from System 2 (slow, cognitive thinking) towards
System 1 (fast, emotional/automatic responses).
A Coca-Cola executive once stated: “The reason Coca-Cola is so valuable is that of the
ideas, perceptions, and expectations about the brand that consumers all over the world
carry around in their heads. So much so that if the company were to lose all its production-
related assets in a disaster, it would survive, but if all consumers were to have a sudden
lapse of memory and forget everything related to Coca-Cola, the company would go out of
business.”
Priming: brands can influence behavior
Priming = exposure to a stimulus activates related concepts in memory, which can
subsequently influence behavior.
ð Brand elements such as logos can therefore activate the associations consumers have
with a brand.
Two types of priming
• Subliminal priming = the stimulus is presented below conscious awareness.
• Supraliminal priming = the stimulus is consciously perceived.
Trait-based / behavioral Goal-based / motivational
Leads to behavior consistent with the Activated concept becomes a goal
activated concept
Effect fades over time Effect can persist
Another concept can replace it Behavior continues until the goal is satisfied
No persistent motivation Motivation can become stronger over time
Automatic effects of brand exposure (Fitzsimons et al., 2008)
Participants were subliminally exposed to either an Apple or IBM logo. Afterwards, they had
to generate unusual uses for a brick.
• Creativity was measured by the number of ideas and the innovativeness/quality of
ideas.
• The researchers also tested whether the effect remained after a delay of about five
minutes, to investigate whether the priming effect was motivational.
, Results: people primed with Apple had more uses for the bricks and the ideas were also
more innovative. And this priming effect was motivational.
Critical questions:
• Who is most susceptible to priming?
• Does brand loyalty matter?
• Does Apple increase creativity, or does IBM decrease it?
• Are the findings still relevant today?
• How long do the effects last?
• Do priming effects replicate across different contexts?
Can exposure to brands have negative consequences? (Zhong & DeVoe, 2010)
The idea was that if you expose people to fast food brands, people make bad financial
choices or are ‘faster’. But this study did not replicate!
Customer-Based Brand Equity (CBBE)
AMA definition of a brand
Brand = a name, term, sign, symbol, design, or combination used to identify and
differentiate a seller’s products or services from competitors.
CBBE definition (Keller, 1993)
Customer-Based Brand Equity (CBBE) = the differential effect of brand knowledge on
consumer response to the marketing of the brand.
In simple terms: CBBE = how much consumers respond differently to a branded product
because of what they know about the brand.
ð Positive CBBE exists when consumers respond more favorably to a
branded product than to an identical unbranded/fictitious product.
Why do brands matter?
Brands have three primary functions:
1. Navigation: brands help consumers choose between many alternatives and reduce
search effort and search costs.
2. Reassurance: brands communicate expected quality, reduce uncertainty, reassure
consumers that they made the right choice, and can make product extensions easier.
3. Engagement: brands create symbolic value, emotional connections, and
identification with the brand.
Summary
• What is a brand? It depends on the perspective: company or consumer.
• Consumers are in relationship with brands and are influenced by brands personality
and associations.
• Companies should create positive, strong and favorable brand associations and plant
them in hearts and mind of consumers.
• CBBE: brand knowledge are the building blocks of CBBE that can automatically
influence consumer’s decision making and behavior.
