Brand

Management

Chapter Three
By: N.T
16/08/2016 E.C
•Chapter Three: Customer Based Brand Equity
1.Definition of CBBE
2.Making a brand strong: Customer knowledge
1.Brand awareness
2.Brand image
3.Building a strong brand: The four steps of brand
building
1.Brand identity
2.Brand meaning
3.Brand response
4.Brand relationships
•
3.1 Definition of CBBE

Customer- based brand equity is normally defined as the

differential effect that brand knowledge has on consumer response to the marketing of the
brand. A brand is said to have positive CBBE when
consumers react more favorability to a product and
the way it is marketed when the brand is identified than when is not (e.g. when the product is
attributed to a fictitious name or its unnamed).

Thus a brand with positive CBBE might result in

 consumers being more accepting of new brand extension,
 less sensitive to price increases and
 withdrawal of advertising support, or
 more willing to seek the brand in new distribution channel.
On the other hand a brand is said to have negative CBBE
• if consumers react less favorably to marketing activity for the brand compared with
3.1.1 Marketing Advantages of CBBE
• Greater loyalty - feel great loyalty to the brand
• Less vulnerable to competition - consumers have valued these brands and
stick with them and reject the overtures competitors, creating steady
revenue for the firms.
• Higher margins.(Inelastic to price increases and Elastic to price decreases)
• Greater trade cooperation- wholesalers, retailers and other parties play an
important role in the selling of the products
• Licensing opportunities- firm may choose to license its name, logo, or other
trade mark item to other company for use on their products and
merchandize.
• Brand extension opportunities- when a firm uses an established brand name
to enter a new market.
3.1.2 Brand Equity Drivers
Once you’ve got the basic framework of your brand architecture, it’s
time to figure out what you can do that no one else can: the unique
attributes that set you apart from your competitors.
These brand equity drivers encompass the sets of benefits where
your brand has an advantage over all others in your sphere.
•Brand equity drivers include the following:
1. Key equity drivers give you direct leverage against your
competition. Quite simply, your business performance is higher
than your competition’s, and you can use this strength to take
new ground, building new equities in areas that were previously
2 Minor advantage drivers are those benefits where your brand rates statistically
stronger than the competition’s but your business performance is actually lower than
the competition’s. Your brand is intrinsically strong, even if your performance is
weaker than your competition, and in this case perception is reality - if your target
customers think you’re a stronger company than your competition, in the long run you
will be successful.
3 Parity equity drivers come into play when your brand rates are statistically
equivalent to your competition, but you have higher business performance. In this case,
it’s to your advantage to highlight your own strengths and your competitor’s
weaknesses.
4 Potential vulnerability drivers are those benefits where your brand rates at
statistical dead heat with the competition, but your performance is actually lower than
your competitors’. This is dangerous territory; it’s only a matter of time before the
competition seizes on this vulnerability - and reveals it to your target consumers
2 Making a brand strong: Customer knowledge

From the perspective of CBBE model,

brand knowledge is the key to creating brand equity,
because it creates the differential effect that drives
brand equity. Customer brand knowledge is
conceptualized here as consisting of a brand node in
memory with variety of associations linked to it. In
particular, brand knowledge can be characterized in
terms of two components:
•3.2.1 Brand awareness
• It consists of brand recognition and brand recall performance.
Brand recognition relate to consumers’ ability to confirm prior
exposure to the brand when given the brand as a cue.
• In other words, brand recognition requires that consumers can
correctly discriminate the brand as having been previously seen or
heard.
• Brand recall relates to consumers’ ability to retrieve the brand
from memory when given the product category, the needs fulfilled
by the category, or a purchases or usage situation as a cue.
• In other words, brand recall requires that consumers correctly
• Brand awareness plays an important role in consumer decision making for three
main reasons.
 Learning advantage-the first way that brand awareness affects consumers
making by influencing the formation and strength of the brand association that
make up the brand image. A necessary condition for the creation of a brand
image is that a brand node has been established in memory .
 Consideration advantages- it is important that consumers think of and consider
the brand whenever they are making a purchase for which the brand could
potentially acceptable. In particular, raising brand awareness increases the
likelihood that the brand will be a member of the consideration set, the handful
of brands that receive serious consideration for purchase.
 Choice advantages- the third advantage of creating a high level of brand
awareness is that brand awareness can affect choice among brands in the
consideration set, even if there are essentially no other associations to those
 3.2.2 Brand Image and Association
Is a unique set of associations in the minds of
customers concerning what a brand stands for and the
implied promises the brand makes.
Or perceptions about a brand as reflected by the
brand associations held in consumer memory.
e.g Apple computer— associate as user friendly, creative,
innovative etc, while for McDonald— quality service, fast
delivery: Mercedes-Benz— performance and status.
•Brand associations are informational nodes linked to the
brand node in memory and contain the meaning of the brand
for consumers.
• A positive brand image is created by marketing
programs that link strong, favorable and unique
associations to the brand in memory.
• The definition of customer-based brand equity does
not distinguish between the source of brand
association and the manner in which they are
formed.
• Marketers should recognize the influence of these
other source of information by both managing
them as possible and adequately accounting for
them in designing communication strategies.
While we use Brand association does not matter
which source of brand association to use. Rather
should focus on;
 Strength of brand associations- making sure that associations are
linked sufficiently strongly to the brand will depend on how the
marketing program and other factors affect consumers’ brand
experiences.
 Strength is a function of both the amount, or quantity, of processing
that information receives as well as the nature, or quality, of that
processing.
 The more deeply a person thinks about product information and
relates it to the existing knowledge, the stronger the resulting brand
associations. Consumer beliefs about brand attributes and benefits
can be formed in different ways. Brand attributes are those
 The more deeply a person thinks about product information
and relates it to the existing knowledge, the stronger the
resulting brand associations. Consumer beliefs about brand
attributes and benefits can be formed in different ways. Brand
attributes are those descriptive features that characterize a
product or service.
• Favorability of brand associations- choosing
which favorable and unique associations to link to
the brand requires careful analysis of the
consumer and completion to determine the optimal
positioning for the brand.
Thus, favorable associations to the brand are those associations that
are desirable to the consumers and are successfully delivered by the
product and conveyed by the supporting marketing program for the
brand.

 Unique of brand associations- the existence of strongly held,

favorably evaluated associations that are unique to the brand and
imply superiority over other brands is critical to a brand’s
success.
 Building a strong brand: The four steps of brand building

Building a strong brand involves a series of steps as part of a

“branding ladder” from identity to meaning to response to
relationships.
These four steps represent a set of fundamental questions
that consumers invariably ask about brands. That is,
meaning cannot be established unless identity has been
created; response cannot occur unless the right meaning has
been developed; and a relationship cannot be forged unless
proper response have been elicited.
These four steps represent a set of fundamental
questions that consumers’ invariability asks about brands
with corresponding brand steps in parenthesis as follow.
1. What are you? (brand identity)
2. What are you? (brand meaning)
3. What do I think or feel about you? (brand response)
4. What about you and me? (brand relationship)
•A strong brand is also characterized by a logically
constructed set of brand “building blocks.”
3.3.1 Brand identity
Performing the four steps to create the right brand identity, brand
meaning, brand response, and brand relationship is a complicated
and difficult process. To provide some structure, it is useful to think
of sequentially establishing six “brand building blocks” with
customers. To connote the sequencing involved, these branding
building blocks can be assembled in terms of a brand pyramid.
Crating significant brand equity involves reaching the pinnacle of
the CBBC brand pyramid and will only occur if the right building
blocks are put into place. This brand building process is illustrated
in figure below and each of these steps and corresponding brand
Figure 3.1: CBBE Pyramid
3.3.2. Brand meaning
Achieving the right brand identity involves crating brand
salience with customers. Brand salience relates to aspects of
the awareness of the brand, for example, how often and easily
the brand is evoked under various situations or circumstances.
To what extent is the brand top-off-mind and easily recalled
or recognized? What a type of customer reminds is
necessary? How pervasive is the brand awareness?
•Brand awareness refers to consumes’ ability to recall and
recognize the brand as reflected by their identity to identify
•Brand awareness is more than just customers
knowing the brand name and having previously seen
it, perhaps even many times. Brand awareness also
involves linking the brand element (name, logo,
symbol and so forth) to certain associations in
memory. In particular, building brand awareness
involves helping customers to understand the
product/service category in which the brand
competes.
•Salience dimensions
Depth of brand awareness: concerns the likelihood hood that a brand
element will come to mind and that ease with which it does so. For
example, a brand that can be easily recalled has a deeper level of
brand awareness than one that only recognized.
Breadth of brand awareness: The breadth of brand awareness depends
to a large extent on the organization of brand and product knowledge
in memory. In general soft drinks have great breadth of awareness in
that they come to mind in variety of different consumption situations.
A consumer may consider drinking one of the varieties of Coke
virtually any time, anywhere. Other beverages such as alcoholic
beverages, milks and juices have much more limited consumption
 Product category structure: To fully understand brand
recall, it is important to appreciate product category, or how
product categories are organized in memories. The beverage
market provides a good setting to examine issues in
category structure and the effect of brand awareness on
brand equity. Thus, in consumers’ mind a product hierarchy
often exists, with product class information at the highest
level, product category information at second highest level,
product type information at the next level, and brand
information at the lowest level.
According to this, consumers first distinguish b/n
flavored/non-flavored beverages. Next they
distinguish b/n alcoholic and non-alcoholic
beverages. Non alcoholic beverages further
distinguished by whether they are hot (tea/coffee) or
cold (milk, juices/soft drinks); alcoholic beverages
are also further distinguished whether they are
wine/beer.
3.3.3 Brand Performance
The product itself is at the heart of the brand equity,
b/c it is the primary influence on what consumers
experience with a brand.
• Brand performance relates to the ways in which
the product/service attempts to meet customers’
more functional needs. Thus brand performance
refers to the intrinsic properties of the brand in
terms of inherent product/service characteristics.
•There are five important types of attributes and benefits
that often underline brand performance, as follows:
 Primary characteristics & supplementary features:
Customers often have beliefs about the levels at which
the primary ingredients of the product operate (high,
medium, or low). Some attributes are essential
ingredients necessary for products to work, where as
other attributes are supplementary that allow for
customization.
 Attributes may vary by product/service category: some
categories have few ingredients (e.g. for bread ingredients
might be grain and yeast flavors); some products have
many ingredients (for toaster oven ingredients might
housing plastic and metal, an oven pan, glass door, 2-3
foot power cord, safety features and certain sittings ); and
some products have numerous ingredients(for portable
tape player ingredients might be AM/FM stereo radio,
programmable CD player, and at least one cassette deck,
at least two speaker drivers and so on)
 Product reliability, durability, and serviceability: Reliability refers to the consistency of
performance over time and from purchase to purchase. Durability refers to the expected may also
needs repair.
 Service effectiveness, efficiency, and empathy: Customers often have performance related
associations that relate to the service interactions they have with brands. Along those lines,
service effectiveness refers to how completely the brand satisfies customers’ service in terms of
speed, responsiveness, and so forth. Finally, service empathy refers to which service providers
are seen as trusting, caring and having the customer’s interests in mind.
 Style and design: Customers may have associations with the product that go beyond its
functional aspects to more aesthetic considerations such as its size, shape, materials and color
involved. Thus, performance may also depend on sensory aspects such as how a product looks
and feels, and perhaps even what it sounds or similes like.
 Price: Finally the pricing policy for the brand can create associations in consumers’ mind to the
relevant price tier or level for the brand in the category. On the other hand, the pricing strategy
adopted for a brand can dictate how consumers categorize the price of the brand and how firm or
flexible that price is seen. Price is important performance associations’ b/c consumers often have
strong beliefs about the price and value of the brand and may recognize the product category.
 Style and design: Customers may have associations with the product that go
beyond its functional aspects to more aesthetic considerations such as its size,
shape, materials and color involved. Thus, performance may also depend on
sensory aspects such as how a product looks and feels, and perhaps even what it
sounds or similes like.
 Price: Finally the pricing policy for the brand can create associations in
consumers’ mind to the relevant price tier or level for the brand in the category.
On the other hand, the pricing strategy adopted for a brand can dictate how
consumers categorize the price of the brand and how firm or flexible that price
is seen. Price is important performance associations’ b/c consumers often have
strong beliefs about the price and value of the brand and may recognize the
product category.
3.3.4. Brand Imagery
Brand imagery deals with the extrinsic properties of the product o
service including the ways in which the brand attempts to mee
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 intangible aspect
of the brand. Imagery associations can be formed directly (from
customer’s own experience contact with the product) or indirectly
(through the depiction of these same considerations as communicated
in brand advertising or other means of promotion methods). Many
kinds of intangibles can be linked to a brand, but four categories can
• User profiles: one set of brand imagery
associations is the type of person or organization
uses the brand. This imagery may result in a
profile or mental image by customers of actual
users, inspirational or ideal users. Associations of
this type may be based demographic or
psychographic factors. Demographic factors
include the following:
• Gender- for example Virginia Slims cigarettes and secret
deodorant have “Feminine” associations where as
Marlboro cigarettes and right Guard deodorant have more
“masculine” association.
• Age – for example, Pepsi Cola, powered energy sports
drink, and Fuji film position themselves as younger than
coke, Gatorade and Kodak respectively.
• Income – for example, Topsider shoes, polo shirts and
BMW automobiles become associated with young,
affluent, urban professionals.
Psychological factors might include attitudes
toward life, careers, positions, social issues or
political situations. For example, a brand user might
be seen as iconoclastic or as more traditional and
conservative. Microsoft might be seen as an
“aggressive” company, where as Patagonia or
timberland might see as “caring” company.
1. Purchase & usage situations: associations of a typical
purchase situation may be based on a number of different
considerations, such as type of channel (see as sold
through department stores), specific stores and ease of
purchase and associated rewards (if any). Similarly,
associations of a typical usage situations may be base on a
number of considerations, such as particular time of the
day, week, month or a years to use the brand, location to
use brand (inside or outside home)
1.

2. Personality & values: brands may also take on personality traits.

A brand, like a person, can characterize as being “modern, old-
fashioned”. Brand personality reflects how people feel about a
brand as a result of what they think the brand is or does the
manner by which the brand is marketed. Five dimensions of
brand personality that have identified are sincerity (down- to-
earth, honest, wholesome, and cheerful), excitement (e.g daring,
spirited, imaginative, and up-to-date), competence (e.g. reliable,
intelligent, and successful), sophistication (e.g. upper class and
charming), and ruggedness (e.g. outdoorsy and tough).
3 History, heritage, & experiences: finally, brands
may take on associations to their past and certain
noteworthy events in the brand history. These type
of association may involve distinctly personal
experiences and episodes or be related to past
behaviors and experiences of friends, families or
others.
• 3.3.5 Brand judgments
•Focus on customers’ personal opinions and evaluations with
regard to the brand. Brand judgment involves how consumers
put together all the different performances and imaginary
associations of the brand to form different kinds of opinions.
Four types of brand judgments are particularly important:
– Brand quality- brand attitudes are important because they
often form the actions and behaviors that consumers take
with brand. Consumers’ brand attitudes generally depend
on specific considerations and benefits of the brand
– Brand credibility- refers to the extent to which the
brand as whole is seen as credible in terms of three
dimensions: perceived expertise, trustworthiness,
and likability. Is the brand seen as (1) competent,
innovative, and a market leader (brand expertise);
(2) dependable and keeping customer interests in
mind (brand trustworthiness); and (3) fun,
interesting, and worth spending time with (brand
likeability).
– Brand consideration- consideration is more than
mere awareness and deals with the likelihood that
consumers will include the brand in the set of
possible options of the brand they might buy/use.
Consideration depends in part on how personally
relevant customers find the brand, that is, the extent
to which customers view the brand as being
appropriate and meaningful to themselves.
– Brand superiority- relates to the extent to which
customers view the brand as unique as and better
than other brands. In other words, do customers
believe that the brand offers advantages that
other brands cannot? Superiority is absolutely
critical in terms of building intense and active
relationships with customers and depends to
great degree on the number and nature of unique
brand associations that make up the brand image.
•3.3.6. Brand Feelings
•Brand fleeing are consumers’ emotional response and reaction
with respect to the brand. Brand fleeing also relate to the social
currency evoked by the brand. What feelings are evoked by the
marketing program for the brand? These feelings can be mild or
intense and can be positive or negative. The following are six
important types of brand-building feelings.
1. Warmth: soothing types of feelings; the brand makes
consumers feel a sense of calm or peacefulness. Consumers
may feel sentimental, warmhearted, or affectionate about the
1. Fun: upbeat types of feelings; the brand makes
consumers feel amused, lighthearted, joyous, playful,
cheerful and so on.
2. Excitement: a different form of upbeat feeling; the
brand makes consumers feel energized and feel that
they are experiencing something special. Brands that
evoke feelings of excitement may result in consumers
feeling a sense of elation of “being alive”, being cool,
sexy or so on.
4 Security: The brand produces feeling of safety,
comfort, and self-assurance. As a result of the brand,
consumers do not experience worry or concerns that
they might have otherwise feel.
5 Social approval: the brand result in consumers
having positive feelings about the reactions of others;
that is consumers feel that others look favorably on
their appearance, behavior, and so on.
6 Self-respect: The brand makes consumers feel
better; consumers feel a sense of pride,
accomplishment, or fulfillment.
•The first three types of feelings are experiential
and immediate, increasing in level of intensity.
The latter three feelings are private and
enduring, increase the level of gravity.
•3.3.7. Brand Resonance
•Brand resonance refers to the nature of relationship
and the extent to which customers feel that they are “in
sync” with the brand.
•Resonance is characterized in terms of intensity or the
depth of the psychological bond that consumers have
with the brand, as well as the level of activity
engendered by this loyalty (e.g. repeat purchase rates
and the extent to which customers seek out brand
•Brand resonance can be broken down into four
categories:
1. Behavioral loyalty- is relates to repeat purchase and the
amount or share of category volume attributed to the brand,
that is the “share of category requirements”. In other words,
how often do consumers purchase a brand and how much do
they purchase. Behavioral loyalty is necessary to occur but
not sufficient for resonance to occur. Some customers may
buy out of necessity (buying b/c the brand is the only product
being stocked or readily accessible, the only one that they can
afford to buy).
1. Attitudinal attachment- To create resonance, there also
needs to be a strong personal attachment. Customers
should go beyond having a positive attitude to viewing
the brand as being special in the broader context. For
example 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 is as “little pleasure” that they look forward to.
1. Sense of community- the brand may also take on boarder meaning to the
customer 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.
2. Active engagement- finally, perhaps the strongest affirmation of brand
loyalty is when customers are willing to invest time, energy, money, or
other resources in the brand beyond those expected during purchase or
consumption of the brand. For example, customers may choose to join a
club centered on a brand, receive updates and exchange correspondence
with other brand users or formal or informal representatives of the brand
itself. They may choose to visit brand websites, participate in chat rooms
and so on.