Lectures & Summary IBM
Lecture 1
Introduction
Brand product + unique name, terms, signs, design + associations
(cognitive and effective). Brand is a perceptual entity (created in the
mind). A person’s gut feeling about a product, service, or
organization.
Brand elements characteristics that identify a product and distinguish it from others (e.g.
name, logo, symbol, package design)
Brand identity how the brand wants to be perceived
in the market
Brand image how the brand is actually perceived in
the market
Brand strategy how the organization will bridge
identity & image (goal is to have as much overlap
between identity & image!)
WHY BRANDS MATTER:
1. Advantages for consumers
- Consumer need for risk reduction (buy from brands they had a good experience with)
- Consumers need simplification
- Consumers want to express themselves
2. Advantages for companies
- Mean of identification
- Customer loyalty
- Price premiums (can be higher) the extra amount a customer is willing to pay for a
product compared to similar alternatives because they perceive it as better or more
valuable.
- Predictable demand
- Robust to competitive actions
- Yield licensing opportunities – growth potential (e.g. via brand extensions)
,KEY THEORETICAL PERSPECTIVES IN THE BRANDING LITERATURE
Firm perspective: view brands as assets and examines the various
functions and roles that brands serve for firms (both strategically
and financially)
Consumer perspective: views brands as signals (economic
approach) and mental knowledge cues (psychological approach)
Society perspective: presents brands in societal and cultural
contexts affecting individual consumers both directly and
indirectly though social forces, structures, and institutions
Lecture 2
Brand Equity
ASSOCIATIVE NETWORK MEMORY MODEL (Blackwell, Miniard, Engel, 2001)
- Memory is a network of nodes and links:
o Nodes stored information or concepts that are
connected by links
o Links strength of the association between nodes
- Activation of nodes:
o When internal information is being retrieved from
memory (accessing stored information)
o When new info is being encoded (learning)
- Spreading activation:
o Activation of one node can spread to another node
- For example: if sport shoes are named, Nike may pop up.
But even further associations may pop directly, or via
activation of brand names.
The stronger a link between the brand node and the association, the
more likely that the association will pop up with the brand
,HOW DOES IT WORK FOR BRANDS?
EXAMPLE COCA COLA
, Keller (1993)
Conceptualizing, Measuring, and Managing Customer-Based Brand Equity
Customer-based brand equity (CBBE) the differential effect of brand knowledge on
consumer response to the marketing of a brand; the value a brand adds based on what
consumers know, think, and feel about it. (e.g. if people prefer Coca-Cola over Pepsi, even
when the taste and price are similar, it’s because of the positive associations they have with
the Coca-Cola brand)
Brand equity the commercial value that derives from consumer perception of the brand
name of a particular product or service, rather than from the product or service itself (different
outcomes result in the marketing of a product or service because of its brand name, as
compared to if the same product or service did not have that name).
Brand knowledge attitude behavior. Strong brands have a benefit.
KEY DIMENSIONS OF BRAND KNOWLEDGE (determinants of CBBE)
1. Brand awareness customer’s ability to identify the brand under different scenarios
(nodes exist with brand name in consumer’s mind)
2. Brand image customer holds some strong, favorable, and unique brand
associations in memory (the other nodes that are linked to the brand name node)
BRAND AWARENESS:
1. Brand recall consumer’s ability to retrieve a brand from memory when given a
product category or a need related to a category; remembering a brand without any
help (e.g. running shoe – Nike)
2. Brand recognition consumer’s ability to confirm prior exposure to the brand when
give the brand as a cue; recognizing a brand when you see or hear it (e.g. show logo,
design, slogan, and then they know the brand)
Establishing (high) brand awareness is important:
- Increases the likelihood that the brand will be in the consideration set
- Influences on decisions about brands within consideration sets
o May be especially essential in low involvement or more impulse buying
categories (quicker decisions)
- It is a necessary condition for developing brand image and associations
Challenge for brand awareness = the human brain filters out most of the stimuli
Brand associations all the nodes stored in a consumer’s memory to which linkages exist
from the brand
Lecture 1
Introduction
Brand product + unique name, terms, signs, design + associations
(cognitive and effective). Brand is a perceptual entity (created in the
mind). A person’s gut feeling about a product, service, or
organization.
Brand elements characteristics that identify a product and distinguish it from others (e.g.
name, logo, symbol, package design)
Brand identity how the brand wants to be perceived
in the market
Brand image how the brand is actually perceived in
the market
Brand strategy how the organization will bridge
identity & image (goal is to have as much overlap
between identity & image!)
WHY BRANDS MATTER:
1. Advantages for consumers
- Consumer need for risk reduction (buy from brands they had a good experience with)
- Consumers need simplification
- Consumers want to express themselves
2. Advantages for companies
- Mean of identification
- Customer loyalty
- Price premiums (can be higher) the extra amount a customer is willing to pay for a
product compared to similar alternatives because they perceive it as better or more
valuable.
- Predictable demand
- Robust to competitive actions
- Yield licensing opportunities – growth potential (e.g. via brand extensions)
,KEY THEORETICAL PERSPECTIVES IN THE BRANDING LITERATURE
Firm perspective: view brands as assets and examines the various
functions and roles that brands serve for firms (both strategically
and financially)
Consumer perspective: views brands as signals (economic
approach) and mental knowledge cues (psychological approach)
Society perspective: presents brands in societal and cultural
contexts affecting individual consumers both directly and
indirectly though social forces, structures, and institutions
Lecture 2
Brand Equity
ASSOCIATIVE NETWORK MEMORY MODEL (Blackwell, Miniard, Engel, 2001)
- Memory is a network of nodes and links:
o Nodes stored information or concepts that are
connected by links
o Links strength of the association between nodes
- Activation of nodes:
o When internal information is being retrieved from
memory (accessing stored information)
o When new info is being encoded (learning)
- Spreading activation:
o Activation of one node can spread to another node
- For example: if sport shoes are named, Nike may pop up.
But even further associations may pop directly, or via
activation of brand names.
The stronger a link between the brand node and the association, the
more likely that the association will pop up with the brand
,HOW DOES IT WORK FOR BRANDS?
EXAMPLE COCA COLA
, Keller (1993)
Conceptualizing, Measuring, and Managing Customer-Based Brand Equity
Customer-based brand equity (CBBE) the differential effect of brand knowledge on
consumer response to the marketing of a brand; the value a brand adds based on what
consumers know, think, and feel about it. (e.g. if people prefer Coca-Cola over Pepsi, even
when the taste and price are similar, it’s because of the positive associations they have with
the Coca-Cola brand)
Brand equity the commercial value that derives from consumer perception of the brand
name of a particular product or service, rather than from the product or service itself (different
outcomes result in the marketing of a product or service because of its brand name, as
compared to if the same product or service did not have that name).
Brand knowledge attitude behavior. Strong brands have a benefit.
KEY DIMENSIONS OF BRAND KNOWLEDGE (determinants of CBBE)
1. Brand awareness customer’s ability to identify the brand under different scenarios
(nodes exist with brand name in consumer’s mind)
2. Brand image customer holds some strong, favorable, and unique brand
associations in memory (the other nodes that are linked to the brand name node)
BRAND AWARENESS:
1. Brand recall consumer’s ability to retrieve a brand from memory when given a
product category or a need related to a category; remembering a brand without any
help (e.g. running shoe – Nike)
2. Brand recognition consumer’s ability to confirm prior exposure to the brand when
give the brand as a cue; recognizing a brand when you see or hear it (e.g. show logo,
design, slogan, and then they know the brand)
Establishing (high) brand awareness is important:
- Increases the likelihood that the brand will be in the consideration set
- Influences on decisions about brands within consideration sets
o May be especially essential in low involvement or more impulse buying
categories (quicker decisions)
- It is a necessary condition for developing brand image and associations
Challenge for brand awareness = the human brain filters out most of the stimuli
Brand associations all the nodes stored in a consumer’s memory to which linkages exist
from the brand
