Lecture 1: What is a brand and why does it materr
What is a brand? Depends on the perspectiee corporates vs consumers
= name/term/sign/symbol/design or combinaton of them, intended to identfy the goods &
seriices of one seller or group of sellers and to diferentate them from those compettono
- Brand(s) are incredibly ialuable resource(s) that need to be nourished and leieraged
- They are intangible assets
- The power of the brand (= brand equity) deriies CLV and predicts customer
acquisiton, retenton & loyalty
Corporatons perspectve
The dynamic efect between brand equity, frms’ resources & CLV
Key questone if brands are the most ialuable resources of a company, what are the main
driiers of the brand equity? In other words, what factors determine the power of a brand?
Knowing the answer to the aboie queston would enable companies toe
- Iniest their resources in the seriice of their brand equity
- Compete with their compettors on the bases on brand equity
- Manage their marketng programs to be consistent with and reinforce their brand
equityo
So, eierything starts and ends with brands in the process of strategic corporate planningo
If you can measure brand equity, you can say which brand is doing betero
Consumer perspectve
Understanding consumers brand behaiiore the necessity for building strong brandso
Consumers are the ultmate users of brand ialueso Understand how they perceiie, feel &
think about brands is therefore the core of any brand management programe
- How do consumers relate to other brands? How do they think or feel about them?
- What driies consumers’ preferences and positie attudes towards a brand?
- How can companies infuence consumers’ brand related intentons and behaiior?
Despite economical, functonal & ratonal iiew of frms towards brands, consumers see and
perceiie brands ofen irratonally & emotonallyo
,Brands as symbols and relatonal tools
- People buy things not only for what they can do = utlitarian motves, but also for
what they mean = symbolic motves
- The queston is less “do I need this?” and more “do I want this/do I like this/what
does this brand tell others about me and who I am?”
- Shif from ratonal/reason-based decision to feeling-based decision
But what driies this symbolic/feeling-based decisions?
- Our self-concept, goals, feelings, thoughts in a giien situaton
- Self-signaling > signaling ideal self-images (competent, moral, intelligent, kind,
physically actie, wealthy etco)
- Using symbols to distnguish ourselies (eogo belonging to certain social class)
Summarye
- The seminal works of Aaker (1997) & Fournier (1998) generated extensiie research
and empirical eiidence on the relatonal iiew of self-brand connecton
- Brands are therefore conceptualized as enttes that haie personalites, characters &
feelings that consumers relate to and connect with
- Consumers establish relatonships of iarying quality with their brand (eogo from
casual and transactonal leiels to extremely intmate and loyal leiels)
- Brands are therefore perceiied as liiing enttes that infuence how consumers make
meaning in life, about themselies and about their surroundings
Reconciling corporates & consumers perspecties
- If consumers perceiie brands as relatonal enttes, then how can companies utlize
and beneft from this informaton?
- How should companies deielop their marketng strategies & iniest their resources?
- In other words, how should companies plan to increase the power of their brands?
- Companies should create knowledge about their brands in consumers’ mindso To
create strong, positie & unique thoughts/feelings/experiences/memories/beliefs
about their brands in consumers’ minds & create bonds & relatons with consumerso
- Those associatons & knowledge are formed and reinforced by marketng actiites of
the frm, as well as consumers experiences with the brand > called consumers brand
knowledgeo
- Eiery tme brand becomes salient, those positie associatons automatcally become
actie and spurs consumers to buy/consume our productso
- Brands are therefore symbols or fag that their presence (through exposure in
adiertsements/shopping centers etco) suddenly and automatcally actiate in a
bundle of (positie) associatons/memories/feelings/thoughts among consumers,
which subsequently infuence their purchase decisions & behaiioro Simply put,
brands actvate consumers brand knowledge
- Therefore, brand equity (= power of a brand) is directly linked to the strength of
brand knowledge among consumerso
,Brand = a name, term, sign, symbol or design or a combinaton of them, intended to identfy
the goods and seriices of one seller or group of sellers and to diferentate them from those
of competton (AMA)o
Brand equity = the ialue of a brand is the diference in what the consumer is willing to pay
for a branded product, compared to an unbranded identcal equiialent of the same producto
Customer-based brand equity = the diferental efect of brand knowledge on consumer
response to the marketng of the brando A brand is said to haie a positie (negatie)
customer-based brand equity when consumers reacts more (less) faiorably to an element of
the marketng mix for the brand than they do to the same marketng mix element when it is
attributed to a factously named/unnamed iersion of the product/seriice (Keller)o
Why do brands matter? Why does building strong brand equity matter?
Summarye
- What is a brand? Depends > corporates iso consumers perspectie
- Consumers are in relatonships with brands and are infuenced by brands personality
and associatonso Companies haie to create positie, strong & faiorable brand
associatons and plant them in hearts and mind of the consumers
- Customer-based brand equity (CBBE) as means to reconcile 2 perspecties
> Defniton & examples
> Brand knowledge (positie associatons) as the building block of CBBE
Artcle 1: Conceptualiziing,i measuring and managing customer-based brand equity (Keeller)e
BRAND KeNOWLEDGE
Detailed framework of brand knowledge
, Brand knowledge = brand awareness (brand recall and recogniton) & brand image (set of
brand associatons)
- Brand = name, term, sign, symbol or design or combinaton of them which is
intendent to identfy products/seriices of one seller and to diferentate those of
compettorso
- Indiiidual brand components are called brand identtes (that part of a brand which
can be iocalized), and their totality the brando
- Understanding the content/structure of brand knowledge is important, because it
infuences what comes in consumers’ minds when they think about a brando
- The associatve network memory model iiews semantc memory/knowledge as a set
of nodes and linkso Nodes are stored informaton connected by linkso
Brand awareness = likelihood & ease a brand name will come to mind
- Related to the strength of the brand node in memory, refected by consumers’ ability
to identfy the brand under diferent conditonso
- Consists of brand recogniton (consumers’ ability to confrm prior exposure to the
brand when giien the brand as cue, correctly discriminatng the brand as haiing
seen/heard preiiously) and brand recall performance (consumers’ ability to retrieie
the brand when giien the product category, generate the brand from memory)o
- The importance of brand recogniton & recall depends on the extent to which
consumers make decisions in-store is out-storeo
- Brand awareness important in consumer decision making becausee 1) increases
likelihood brand will be a member of the consideraton set, 2) afect decisions about
brands in the consideraton set, eien if there are no other brand associatons (eogo
consumers’ rule to only buy familiar/well-established brands), 3) infuences the
formaton/strength of brand associatons in the brand imageo
Brand image = perceptons about a brand as refected by the brand associatons held in
consumer memoryo
- Brand associatons are the other informatonal nodes linked to the brand node in
memory and contains the meaning of the brand for consumerso
- Faiorability/strength/uniqueness are the dimensions of brand associatons
distnguishing brand image from brand knowledge > plays an important role in
determining the diferent response that makes up brand equityo
Types of brand associatons =
- One way to distnguish among brand associatons is by leiel of abstracton (how
much informaton is summarized in the associaton)o
- Brand associatons can be classifed into three major categoriese atributes,i beneits
and attudeso
1. Atributes = descriptie features that characterize a product/seriice, what a consumer
thinks the product/seriice is and what is iniolied with its purchase/consumptono Attributes
are distnguished according to how directly they relate to product/seriice performanceo
- Product-related atributes = the ingredients necessary for performing the
product/seriice functon sought by consumers (product’s physical compositon)
What is a brand? Depends on the perspectiee corporates vs consumers
= name/term/sign/symbol/design or combinaton of them, intended to identfy the goods &
seriices of one seller or group of sellers and to diferentate them from those compettono
- Brand(s) are incredibly ialuable resource(s) that need to be nourished and leieraged
- They are intangible assets
- The power of the brand (= brand equity) deriies CLV and predicts customer
acquisiton, retenton & loyalty
Corporatons perspectve
The dynamic efect between brand equity, frms’ resources & CLV
Key questone if brands are the most ialuable resources of a company, what are the main
driiers of the brand equity? In other words, what factors determine the power of a brand?
Knowing the answer to the aboie queston would enable companies toe
- Iniest their resources in the seriice of their brand equity
- Compete with their compettors on the bases on brand equity
- Manage their marketng programs to be consistent with and reinforce their brand
equityo
So, eierything starts and ends with brands in the process of strategic corporate planningo
If you can measure brand equity, you can say which brand is doing betero
Consumer perspectve
Understanding consumers brand behaiiore the necessity for building strong brandso
Consumers are the ultmate users of brand ialueso Understand how they perceiie, feel &
think about brands is therefore the core of any brand management programe
- How do consumers relate to other brands? How do they think or feel about them?
- What driies consumers’ preferences and positie attudes towards a brand?
- How can companies infuence consumers’ brand related intentons and behaiior?
Despite economical, functonal & ratonal iiew of frms towards brands, consumers see and
perceiie brands ofen irratonally & emotonallyo
,Brands as symbols and relatonal tools
- People buy things not only for what they can do = utlitarian motves, but also for
what they mean = symbolic motves
- The queston is less “do I need this?” and more “do I want this/do I like this/what
does this brand tell others about me and who I am?”
- Shif from ratonal/reason-based decision to feeling-based decision
But what driies this symbolic/feeling-based decisions?
- Our self-concept, goals, feelings, thoughts in a giien situaton
- Self-signaling > signaling ideal self-images (competent, moral, intelligent, kind,
physically actie, wealthy etco)
- Using symbols to distnguish ourselies (eogo belonging to certain social class)
Summarye
- The seminal works of Aaker (1997) & Fournier (1998) generated extensiie research
and empirical eiidence on the relatonal iiew of self-brand connecton
- Brands are therefore conceptualized as enttes that haie personalites, characters &
feelings that consumers relate to and connect with
- Consumers establish relatonships of iarying quality with their brand (eogo from
casual and transactonal leiels to extremely intmate and loyal leiels)
- Brands are therefore perceiied as liiing enttes that infuence how consumers make
meaning in life, about themselies and about their surroundings
Reconciling corporates & consumers perspecties
- If consumers perceiie brands as relatonal enttes, then how can companies utlize
and beneft from this informaton?
- How should companies deielop their marketng strategies & iniest their resources?
- In other words, how should companies plan to increase the power of their brands?
- Companies should create knowledge about their brands in consumers’ mindso To
create strong, positie & unique thoughts/feelings/experiences/memories/beliefs
about their brands in consumers’ minds & create bonds & relatons with consumerso
- Those associatons & knowledge are formed and reinforced by marketng actiites of
the frm, as well as consumers experiences with the brand > called consumers brand
knowledgeo
- Eiery tme brand becomes salient, those positie associatons automatcally become
actie and spurs consumers to buy/consume our productso
- Brands are therefore symbols or fag that their presence (through exposure in
adiertsements/shopping centers etco) suddenly and automatcally actiate in a
bundle of (positie) associatons/memories/feelings/thoughts among consumers,
which subsequently infuence their purchase decisions & behaiioro Simply put,
brands actvate consumers brand knowledge
- Therefore, brand equity (= power of a brand) is directly linked to the strength of
brand knowledge among consumerso
,Brand = a name, term, sign, symbol or design or a combinaton of them, intended to identfy
the goods and seriices of one seller or group of sellers and to diferentate them from those
of competton (AMA)o
Brand equity = the ialue of a brand is the diference in what the consumer is willing to pay
for a branded product, compared to an unbranded identcal equiialent of the same producto
Customer-based brand equity = the diferental efect of brand knowledge on consumer
response to the marketng of the brando A brand is said to haie a positie (negatie)
customer-based brand equity when consumers reacts more (less) faiorably to an element of
the marketng mix for the brand than they do to the same marketng mix element when it is
attributed to a factously named/unnamed iersion of the product/seriice (Keller)o
Why do brands matter? Why does building strong brand equity matter?
Summarye
- What is a brand? Depends > corporates iso consumers perspectie
- Consumers are in relatonships with brands and are infuenced by brands personality
and associatonso Companies haie to create positie, strong & faiorable brand
associatons and plant them in hearts and mind of the consumers
- Customer-based brand equity (CBBE) as means to reconcile 2 perspecties
> Defniton & examples
> Brand knowledge (positie associatons) as the building block of CBBE
Artcle 1: Conceptualiziing,i measuring and managing customer-based brand equity (Keeller)e
BRAND KeNOWLEDGE
Detailed framework of brand knowledge
, Brand knowledge = brand awareness (brand recall and recogniton) & brand image (set of
brand associatons)
- Brand = name, term, sign, symbol or design or combinaton of them which is
intendent to identfy products/seriices of one seller and to diferentate those of
compettorso
- Indiiidual brand components are called brand identtes (that part of a brand which
can be iocalized), and their totality the brando
- Understanding the content/structure of brand knowledge is important, because it
infuences what comes in consumers’ minds when they think about a brando
- The associatve network memory model iiews semantc memory/knowledge as a set
of nodes and linkso Nodes are stored informaton connected by linkso
Brand awareness = likelihood & ease a brand name will come to mind
- Related to the strength of the brand node in memory, refected by consumers’ ability
to identfy the brand under diferent conditonso
- Consists of brand recogniton (consumers’ ability to confrm prior exposure to the
brand when giien the brand as cue, correctly discriminatng the brand as haiing
seen/heard preiiously) and brand recall performance (consumers’ ability to retrieie
the brand when giien the product category, generate the brand from memory)o
- The importance of brand recogniton & recall depends on the extent to which
consumers make decisions in-store is out-storeo
- Brand awareness important in consumer decision making becausee 1) increases
likelihood brand will be a member of the consideraton set, 2) afect decisions about
brands in the consideraton set, eien if there are no other brand associatons (eogo
consumers’ rule to only buy familiar/well-established brands), 3) infuences the
formaton/strength of brand associatons in the brand imageo
Brand image = perceptons about a brand as refected by the brand associatons held in
consumer memoryo
- Brand associatons are the other informatonal nodes linked to the brand node in
memory and contains the meaning of the brand for consumerso
- Faiorability/strength/uniqueness are the dimensions of brand associatons
distnguishing brand image from brand knowledge > plays an important role in
determining the diferent response that makes up brand equityo
Types of brand associatons =
- One way to distnguish among brand associatons is by leiel of abstracton (how
much informaton is summarized in the associaton)o
- Brand associatons can be classifed into three major categoriese atributes,i beneits
and attudeso
1. Atributes = descriptie features that characterize a product/seriice, what a consumer
thinks the product/seriice is and what is iniolied with its purchase/consumptono Attributes
are distnguished according to how directly they relate to product/seriice performanceo
- Product-related atributes = the ingredients necessary for performing the
product/seriice functon sought by consumers (product’s physical compositon)
