SUMMARY
BRAND
MANAGEMENT
PAPERS
,ARTICLE 1: CONCEPTUALIZING, MEASURING, AND MANAGING CUSTOMER-BASED BRAND
EQUITY
Customer-based brand equity is defined as the differential effect of brand knowledge on consumer response to
the marketing of the brand. A brand is said to have positive (negative) customer-based brand equity when
consumers react more (less) favourable to an element of the marketing mix for the brand than they do to the
same marketing mix element when it is attributed to a fictitiously named or unnamed version of the product or
service. Brand knowledge is conceptualized according to an associative network memory model in terms of two
components: brand awareness and brand image (a set of brand associations). Customer-based brand equity
occurs when the consumer is familiar with the brand and holds some favourable, strong, and unique brand
association in memory.
In a general sense, brand equity is defined in terms of the marketing effects uniquely attributable to the brand,
for example when certain outcomes result from the marketing of a product or service because of its brand
name, which would not occur if the same product or service did not have that name. There ae 2 general
motivations for studying brand equity:
- Financially based motivation. This motivation comes from the need to estimate the value of a brand
more precisely for accounting purposes or merger, acquisition, or divesture purposes.
- Strategy-based motivation. This motivation arises because of the need to improve marketing
productivity. Given higher costs, greater competition, and flattening demand in many markets, firms
seek to increase the efficiency of their marketing expenses. As a consequence, marketers need a more
thorough understanding of consumer behaviour as a basis for making better strategic decisions about
target market definition and product positioning, as well as better tactical decisions about specific
marketing mix actions. Perhaps a firm’s most valuable asset for improving marketing productivity is
the knowledge that has been created about a brand in consumers’ mind.
The way brand equity is described and conceptualized before, is from the perspective of the individual
consumer. 2 important points emerge from this conceptualization:
- Marketers should take a broad view of marketing activity for a brand and recognize the various effects
it has on brand knowledge, as well as how changes in brand knowledge affect more traditional;
outcome measures such as sales.
- Marketers must realize that the long-term success of all future marketing programs for a brand is
greatly affected by the knowledge about the brand in memory that has been established by the firm’s
short-term marketing efforts.
,In short, because the content and structure of memory for the brand will influence the effectiveness of future
brand strategies, it is critical that managers understand how their marketing programs affect consumer
learning and thus subsequent recall for brand-related information.
BRAND KNOWLEDGE - BACKGROUND
A brand can be defined as a name, term, sign, symbol, or design, or combination of them which is intended to
identify the goods and services of one seller or group of sellers and to differentiate them from those of
competitors. These individual brand components are here called brand identities and their totality the brand.
Understanding the content and structure of brand knowledge is important because they influence what comes
to mind when a consumer thinks about a brand.
Brand knowledge is conceptualized as consisting of a brand node in memory to which a variety of associations
are linked (consistent with an associative network memory model). The brand node or a linked association can
be activated when external information is being encoded or internal information is retrieved from long-term
memory. Activation can spread from one node to other linked nodes in memory. When the activation of one
node exceeds some threshold level, the information contained in the node is recalled. Thus, the strength of
association between the activated node and all linked nodes determines the extent of this spreading activation
and the particular information that can be retrieved from memory.
Brand knowledge is defined in terms of two components, brand awareness and brand image. Brand awareness
relates to brand recall and recognition performance by consumers. Brand image refers to the set of
associations linked to the brand that consumers hold in memory. These components are affected by other
characteristics of and relationships among the brand associations.
BRAND KNOWLEDGE – BRAND AWARENESS
Brand awareness is related to the strength of the brand node or trace in memory, as reflected by consumers’
ability to identify the brand under different conditions. Brand awareness consists of brand recognition and
brand recall performance. Brand recognition relates to consumers’ ability to confirm prior exposure to the
brand when given the brand as a cue. Thus, brand recognition requires that consumers correctly discriminate
the brand as having been seen or heard previously. Brand recall relates to consumers’ ability to retrieve the
brand when given the product category, the needs fulfilled by the category, or some type of probe as a cue.
Thus, brand recall requires that consumers correctly generate the brand from memory. The relative importance
of brand recall and recognition depends on the extent to which consumers make decisions in the store vs.
outside the store. Brand recognition may be more important to the extent that product decisions are made in
the store.
Brand awareness plays an important role in consumer decision making for 3 major reasons:
, - It is important that consumers think of the brand when they think about the product category. Raising
brand awareness increases the likelihood that the brand will be a member of the consideration set,
which is the handful of brands that receive serious purchase consideration.
- Brand awareness can affect decisions about brands in the consideration set, even if there are
essentially no other brand associations. An example of this is the fact that consumers have been
shown to adopt a decision rule to buy only a familiar, well-established brand. Also, in low-involvement
decision settings, a minimum level of brand awareness may be sufficient for product choice, even in
the absence of a well-formed attitude. The elaboration likelihood model (Petty and Cacioppo 1986)
suggests that consumers may base choices on brand awareness considerations when they have low
involvement, which could result from either a lack of consumer motivation (i.e., consumers do not
care about the product or service) or a lack of consumer ability (i.e., consumers do not know anything
else about the brands).
- Brand awareness affects consumer decision making by influencing the formation and strength of
brand associations in the brand image. A necessary condition for the creation of a brand image is that
a brand node has been established in memory, and the nature of that brand node should affect how
easily different kinds of information can become attached to the brand in memory.
BRAND KNOWLEDGE – BRAND IMAGE
Brand image is defined as perceptions about a brand as reflected by the brand associations held in consumer
memory. Brand associations are the other informational nodes linked to the brand node in memory and
contain the meaning of the brand for consumers. The favourability, strength, and uniqueness of brand
associations are the dimensions distinguishing brand knowledge that play an important role in determining the
differential response that makes up brand equity, especially in high involvement decision settings.
TYPES OF BRAND ASSOCIATIONS
There are different types of brand associations that may be present in consumer memory. On way to
distinguish between brand associations is by their level of abstraction, that is by how much information is
summarized in the association. Along this dimension, brand associations can be classified into three major
categories of increasing scope: attributes, benefits, and attitudes. Several additional distinctions can be made
within these categories according to the qualitive nature of the association.
- Attributes are those descriptive features that characterize a product or service. Attributes can be
distinguished in how directly they are related to product or service performance. Product-related
attributes are defined as the ingredients necessary for performing the product or service function
sought by consumers. Hence, they relate to a product’s physical composition or a service’s
requirements. Non-product-related attributes are defined as external aspects of the product or service
that relate to its purchase or consumption. The four main types of non-product-related attributes are
(1) price information, (2) packaging or product appearance information, (3) user imagery, and (4)
usage imagery (i.e., where and in what type of situations the product or service is used).
