© 2010 South-Western, a part of Cengage Learning All rights reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama CHAPTER 2 Eighth Edition Marketing Communications Challenges: Enhancing Brand Equity, Influencing Behavior, and Being Accountable 1. Explain the concept of brand equity from both the company’s and the customer’s perspectives. 2. Describe the positive outcomes that result from enhancing brand equity. 3. Appreciate a model of brand equity from the customer’s perspective. 4. Understand how marcom efforts must influence behavior and achieve financial accountability Chapter Objectives After reading this chapter you should be able to: © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–2 © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–3 Introduction: Introduction: Framework for Marcom Process Framework for Marcom Process Fundamental Decisions Desired Outcomes Implementation Decisions Evaluation and Corrective Action © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–4 Basic IMC Issues Basic IMC Issues How to enhance brand equity How to affect customer behavior How to justify marcom investments How to demonstrate financial accountability Marketing Communicators © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–5 Basic IMC Issues Basic IMC Issues • What can marketing communicators do to What can marketing communicators do to enhance the equity of their brands? enhance the equity of their brands? • How can marketing communicators affect the How can marketing communicators affect the behavior of their present and prospective behavior of their present and prospective customers? customers? • How can marketing communicators justify their How can marketing communicators justify their investments in advertising, sales promotions, investments in advertising, sales promotions, and other marcom elements? and other marcom elements? • How can marketing communications How can marketing communications demonstrate financial accountability? demonstrate financial accountability? © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–6 Brand Brand • Brand Brand  Is a name, term, sign, symbol, or design. Is a name, term, sign, symbol, or design.  Identifies and differentiates goods and services of one Identifies and differentiates goods and services of one seller or group of sellers from those of the seller or group of sellers from those of the competition. competition.  Communicates a particular set of values. Communicates a particular set of values. • Brand Equity Brand Equity  Can be considered either from the perspective of the Can be considered either from the perspective of the organization that owns it or from the vantage point of organization that owns it or from the vantage point of the customer. the customer.  Is valuable when consumers believe the brand can Is valuable when consumers believe the brand can deliver on its promises. deliver on its promises. © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–7 A Firm-Based Perspective on Brand Equity A Firm-Based Perspective on Brand Equity Higher market share Increased brand loyalty Premium pricing Revenue premiums Effects of Brand Equity Increases © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–8 Children’s Taste Preferences (In percents) Table 2.1 © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–9 Brand Equity Increases Brand Equity Increases • Revenue Premium Revenue Premium  The revenue differential between a branded item and The revenue differential between a branded item and a corresponding private labeled item. a corresponding private labeled item.  Revenue premium for a branded item ( Revenue premium for a branded item ( b b ) ) compared to compared to a private label ( a private label ( pl pl ) = ) = (volume (volume b b )(price )(price b b ) ) – – (volume (volume pl pl )(price )(price pl pl ) ) © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–10 A Customer-Based Brand Equity Framework Figure 2.1 Source: Adapted from Kevin Lane Keller, “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity,” Journal of Marketing 57 (January 1993), 7. [...]... Perceived Benefits © 2010 South-Western, a part of Cengage Learning All rights reserved Favorable Attitude 2–13 Dimensions of Brand Personalities Sincerity Competence Excitement Sophistication © 2010 South-Western, a part of Cengage Learning All rights reserved Ruggedness 2–14 Ways of Enhancing Brand Equity Enhancing Brand Equity Speak-for-Itself Message-Driven © 2010 South-Western, a part of Cengage... to the consumer’s mind when contemplating a particular brand • Top-of-Mind Awareness (TOMA)  Occurs when a brand is the first brand that consumers recall part of © 2010 South-Western, awhen thinking about brands in a particular product category Cengage Learning All rights reserved 2–11 Figure 2.2 The Brand Awareness Pyramid © 2010 South-Western, a part of Cengage Learning All rights reserved Source:... 2010 South-Western, a part of Cengage Learning All rights reserved 2–17 What Benefits Result from Enhancing Brand Equity? • Increased consumer loyalty • Long-term growth and profitability for the brand • Maintain brand differentiation from competitive offerings • Insulate brand from price competition © 2010 South-Western, a part of Cengage Learning All rights reserved 2–18 Measuring World-Class Brands... competition © 2010 South-Western, a part of Cengage Learning All rights reserved 2–18 Measuring World-Class Brands Evaluating World-Class Brands Quality Salience © 2010 South-Western, a part of Cengage Learning All rights reserved Equity 2–19 Characteristics of a World-Class Brand • Delivers benefits consumers want • Brand helps build brand equity • Stays relevant • Good positioning • Brand’s managers... run • Fits into brand portfolio • Monitoring of the sources of brand equity • Price equals value © 2010 South-Western, a part of Cengage Learning All rights reserved 2–20 Table 2.2 Top Ten World-Class Brands Overall (Among 1,030 total brands included in EquiTrend’s Spring 2006 survey) © 2010 South-Western, a part of Cengage Learning All rights reserved Source: Spring 2006 EquiTrend brand study by Harris... sales volume compared to the effect of other elements? © 2010 South-Western, a part of Cengage Learning All rights reserved 2–28 Measuring Marcom Effectiveness • Marketing-Mix Modeling  Employing econometric statistical techniques to estimate the effects that elements of the marcom mix have in driving sales volume • Example: © 2010 South-Western, a part of Cengage Learning All rights reserved 2–29 ... better at marcom activities © 2010 South-Western, a part of Cengage Learning All rights reserved 2–24 Measuring Marketing Investment Performance • Difficulties in Measuring Marcom Effectiveness  Choosing an appropriate metric  Gaining agreement on measures  Collecting accurate data for marcom assessment  Determining effects of specific marcom elements © 2010 South-Western, a part of Cengage Learning... Improvement in attitudes toward the brand © 2010 South-Western, a part of Cengage Learning All rights reserved Increased purchase intentions Larger sales volume 2–26 Difficulties in Measuring Marcom Effectiveness: Gaining Agreement • Finance Departments’ Measures of Success:  Discounted cash flows  Net present values of investment decisions © 2010 South-Western, a part of Cengage Learning All rights reserved... Leveraging Brand Meaning from Various Sources © 2010 South-Western, a part of Cengage Learning All rights reserved Source: Kevin Lane Keller, “Brand Synthesis: The Multidimensionality of Brand Knowledge,” Journal of Consumer Research 29 (March 2003), 598 By permission of the University of Chicago Press 2–16 Types of Branding for Leveraging • Co-Branding  A partnership between two brands • Ingredient... and boosting brand image serve little positive effect unless individuals make purchases or engage in desired behaviors  Marcom’s objective is ultimately to affect sales volume and revenue © 2010 South-Western, a part of Cengage Learning All rights reserved 2–23 Measuring Marketing Investment Performance • Return on Marketing Investment (ROMI)  Measures the effect of marcom, or of its specific elements . a particular consumer’s mind when contemplating a particular brand brand • Top-of-Mind Awareness (TOMA) Top-of-Mind Awareness (TOMA)  Occurs when a brand is the first brand that Occurs when. Personalities Excitement Sincerity Ruggedness Sophistication Competence © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–15 Ways of Enhancing Brand Equity Ways of Enhancing Brand Equity Speak-for-Itself Message-Driven Leveraging Enhancing. competition © 2010 South-Western, a part of Cengage Learning. All rights reserved. 2–19 Measuring World-Class Brands Measuring World-Class Brands Quality Salience Equity Evaluating World-Class Brands ©