Kellers Customer Based Brand Equity Model Marketing Essay

Kellers Customer Based cross Equity Model Marketing EssayPrinciples of Marketing, by Philip Kotler and Gary Armstrong and the Ameri raft Marketing Association outlined tell onas a fig, term, sign / symbol or acombination of these that identifies the bump offr or parcel outer of the return and differentiates them from those of the tilt. Aakers (1991) widely accepted definition of a fault is to identify the goods or services of whether one seller or a group of sellers, and to differentiate those goods or services from those of competitors. dents atomic number 18 frankincense, valuable assets and tools influencing consumer behavior which includes aw atomic number 18ness, resource, use, satisfaction, recommendation, trust and loyalty. They reduce information search be and endangerment for consumers and deliver feature, valuates, promises, and modus vivendi enhancement (Czellar, 2010) .According to Keller (2002) the social welfares of a strong label gage be categorized down the stairs 4 different categories, give awayly, result-related effects, equipment casualty-related effects, communication-related effects and channel related effects. Product-related effects of set include consumer proceeds military ratings, consumer confidence, acquaintances of graphic symbol, and leveraging rate prescribedly related to a put up appoint. If consumers are well aware of a imperfection, their military strength and their obtain intention toward the reproach are increased. Price-related effects refer to the fact that blur leaders defecate higher(prenominal) priced positions and consumers clear a lower level of price sensitivity toward those leaders. Communication-related effects refer to how the rating of mark advertising female genital organ be positively biased when consumers have positive feelings toward a blade which is a well known and well- similard nock and the effect of the well-known tarnish, which is most likely to have warlike advantage in merchandising activities, is the channel-related effect.2.2 Fashion and tell oningAccording to Solomon and Rabolt (2004), mien is defined as a style that is accepted by a large group of quite a little at a apt(p) time. Generally people use the term fashion and style interchangeably. In the fashion context, consumers choose a authentic fashion trademark over other(a)s because they are associated with a certain style (Ferney et al.2005).The way individuals have their own distinctive personalities and styles in the manner of living, speaking as well as dressing, the shuffles too can be associated with a particular personality, because mark has the propensity to distinguish a print from others by creating an individual distinguish personality, by using different flaw elements like name, logo, symbol, and package design(Newman and Patel ,2002). instigatoring is important in fashion retailing as the taint can project a specific image like personality, sex, life style and age, to the target consumers. Like in case of a sports grade, the attribute of sporty feeling would be organize in consumers mind whereas a casual fashion note would be associated with the casual attribute (Keller 2002). The sucker image allows fashion merchandise to communicate a distinct emblematic meaning, through merchandise, store atmosphere, sales associate attraction with customers, and marketing campaign, amidst the retailers and the consumers (Ferney et al, 2005). Newman and Patel discovered that defect image is crucial in this intensely competitory fashion retail sector. As different types of fashion consumers are duplicateed with particular clothing styles, brand image can create a point of difference and assist consumers in selecting a sufficient fashion brand. A successful fashion brand can capture the market share and sustain a positive dealingship with its customers, therefore creating an appropriate fashion brand is one of the primary ship cana l for the marketers to differentiate the harvests from the competitors. In brief, fashion and branding are c leave outly related (Solomon and Rabolt 2004 Newman and Patel, 2002).2.3 Brand EquityIn Building Strong Brands, David Aaker defined brand beauteousness as a set of brand assets and liabilities joined to the brand-its name and symbols-that add value to, or subtract value from, a produce or service. The major(ip) asset categories are brand loyalty, brand name knowingness, perceived quality and brand associations.http//www.tvonlinesurveys.com/enquete/Brand%20 faithfulness%20model%20Aaker.bmp(Aakers Brand Equity Model)The model mainly talks approximately how brand equity is formed of five components and how for each one has a role to play in the work of the brand and indicates that how the brand equity go forth deepen with the increase in brand loyalty, brand name awareness, and perceived quality and with stronger and positive brand associations and too with the increas e in the number of brand related proprietary assets. This model can thus be use to get to grips with a brands equity and gain brainstorm into the relation between the different brand equity components and the future performance of the brand. Apart from the five components, the model similarly reflects indicators or the consequences of the pursued branding policy. (Aaker, 1991)The five components and the factors having an influence on these components areBrand loyalty Aaker (1991) defines brand loyalty as the holdfast that a customer has to a brand. Two different levels of loyalty are classified behavioral and cognitive loyalty (Keller, 1998). Behavioral loyalty can be indicated by a number of repeated purchases (Keller, 1998) or commitment to obtain the brand as a primary choice .Cognitive loyalty refers to the consumers intention to buy the brand as the first choice .Another indicator of loyalty is the customers willingness to pay higher price for a brand in comparison with ano ther brand offering similar bene adapts. The extent to which people are loyal to a brand is expressed in the following factorsReduced marketing costs, as respite on to loyal customers is way cheaper than charming potential cutting customers.Trade leverage, as loyal customers wreak a stable source of revenue for the distributive level.Attracting in the buff customers, as current customers can abet set ahead name awareness and hence bring in tonic customersTime to respond to agonistical threats, as loyal customers that are not quick to switch brands give a friendship to a greater extent than time to respond to competitive threats. (Aaker, 1991)Brand awareness It is a key determinant of brand equity. It is defined as an individuals ability to recall and cope a brand. Top-of-mind and brand dominance is other levels of awareness include by Aaker (1996) in measuring awareness. Awareness can affect customers perceptions, which lead to different brand choice and even loyalty (Aak er, 1996). A brand with strong brand recall (unaided awareness) and top of mind can affect customers perceptions, which lead to different customer choice inside a ingathering social class. The extent to which a brand is known among the public ,can be measured using the following parametersAnchor to which associations can be devoted (depending on the strength of the brand name, to a greater extent or fewer associations can be attached to it, which will, in turn ,eventually influence brand awareness)Familiarity and liking (consumers with a positive attitude towards a brand ,will talk close to it more and spread brand awareness)Signal of substance/commitment to a brand.Brand to be considered during the purchasing bear upon (to what extent does the brand form part of the evoked set of brands in a consumers mind) (Aaker, 1991)Perceived quality It is defined as the customers judgment round a products overall worthiness or superiority in comparison to alternatives brand and overall superiority that ultimately motivates the customer to purchase the product (Aaker and Jacobson, 1994). It is difficult for customers to make a rational judgment of the quality. They are likely using quality attributes like color, heart, form, and appearance of the product and the availability of production information to infer quality. The extent to which a brand is considered to provide good quality products can be measured on the basis of the following criteriaThe quality offered by the product / brand is a reason to buy it.Level of differentiation/position in relation to competing brands.Price, as the product becomes more complex to assess and status is at play, consumers tend to hook on price as a quality indicator.Availability in different sales channels, i.e. consumers have a higher quality perception of brands that are widely available.The number of brand supplements (this can tell the consumer the brand stands for a certain quality guarantee that is applicable on a wide s cale) (Aaker, 1991)Brand associations Consumer essential first be aware of the brand in order to develop a set of associations. Brand association contains the meaning of the brand for consumers it is anything combineed in memory to a brand (Aaker, 1991). Brand associations are mostly grouped into a product-related attribute like brand performance and non product related attributes like brand personality and organizational associations. Customers evaluate a product not merely by whether the product can perform the functions for which it is designed for but the reasons to buy this brand over the competitors. Brand personalities include symbolic attributes (Aaker, 1996 Keller, 1993) which are the intangible features that meet consumers needs for social approval, personal expression or self-importance-esteem. The associations triggered by a brand can be assessed on the basis of the following indicatorsThe extent to which a brand name is able to retrieve associations from the consumer s brain, such as information from TV advertising.The extent to which association contribute to brand differentiation in relation to the competition (these can be abstract association or associations with concrete product bene tallys)The extent to which brand associations play a role in the buying subroutine (the great this extent ,the higher the total brand equity)The extent to which brand associations create positive attitude/feelings(the great this extent, the higher the total brand equity)The number of brand credits in the market (the greater this number, the greater the hazard to add brand associations) (Aaker, 1991)Other proprietary assets Some of the examples are patent and intellectual property rights, relations with trade partners, etc. (the more the proprietary rights a brand has accumulated, the greater the brands competitive edge in those fields) (Aaker, 1991)The model likewise provides an insight into the criteria that indicate to what degree actual value is create d with both consumer and lodge imputable to pursued branding policy. even, this model does not make a clear distinction between added value brand can have for the consumer /customer and added value it can have for the brand owner/company and does not even discuss the process that goes into building strong brands, and is altogether useful to gain insight into the various brand equity components and the relation between them. (Wood, 2000)2.4 Kellers Customer-based Brand equity modelThis model depicts the process that goes into building strong brands. It is set in the realm of brand added value, i.e. the focus of this model is on the added value a brand offers its customers/consumers. Kevin Lane Keller introduced this customer-based brand equity model, and has defined it as the differential effect that consumers brand experience has on their response to the marketing of that brand (Keller 1993).Differential consumer response is mainly based on consumers familiarity of the brand a s well as the favorability of associations. The model is made up of various amounts, which should be taken in a fixed order. The model talks about the six dimensions of brand equity, namely, brand salience, brand performance, brand imagery, consumer judgments, consumer feelings and brand resonance. According to Keller, the highest level of brand equity is realized when the top of the pyramid is attained. In his view, the resonance comes about when the consumer has a high level of awareness of and familiarity with the brand and holds some strong, well-off and quaint associations in memory. (Keller, Strategic brand management, 2002)http//markhendrikse.squarespace.com/storage/post-images/july-2009/cmmemodel.jpg?__SQUARESPACE_CACHEVERSION=1247443493748(Kellers customer based brand equity model)The six dimensions and the process that goes into building of strong brands, as identified by Keller areBrand Salience The first step in the development of a strong brand involves describing i ts identity, and revolves around the question Who am I? .To get through this, the brand managers need to ensure that the customers should be able to identify with the brand. A clear associative link between the brand and a specific product class/ mob has to be established in the mind of the consumer, this in any case raise helps in creating a solid footing for the building of brand awareness and knowledge. Salience basically refers to how familiar consumers are with a brand and whether the brand is actively considered when consumers find themselves in purchase or consumption situations. A high level of salience means that a consumer has knowledge of both the depth and the width of a brand, (depth here refers to the ease with which a brand can be activated in the consumers brain, while width refers to the extent to which happens when the consumer is making a purchase conclusion.)Brand Salience is thus a precondition for moving up on the brand pyramid. (Keller, 2002) (Keller, Stra tegic Brand Management a european perspective, 2008)Brand performance and brand imagery when brand salience has been realized, the process moves on to the bordering steps in the development of brand meaning. The second step basically answers the question What am I?This question is answered by using intrinsic (tangible) and extrinsic (intangible) characteristics of a brand.(Intrinsic characteristics refer to the degree to which a product/service is seen to perform by consumers, and extrinsic characteristics refers to how consumers count on about a brand. In order to boost overall brand equity the focus needs to be on both brand performance and brand imagery, since they together add on to the brand associations. Raising brand performance starts by delivering a product/service that fulfills current customers needs, followed by attempts to surpass the triggered customer expectations. Brand imagery on the other hand can be increased by tailoring to consumerspshyco-social needs. Imagery refers to what people think about a brand (in terms of value and meaning) and not so much about what exactly the product does or can do (in terms of functionality).It can be raised directly by creating brand experience or indirectly through advertisement. In the end, these dickens dimensions together need to bring about certain brand associations that are strong, positive and unique. These dimensions too play an important role in creating brand loyalty. (Keller, 2002)Brand judgments and brand feelings After realizing strong, positive and unique brand associations, the third step deals with the way consumers think and feel about a brand. This step basically contains the responses to the efforts from step 2(performance and imagery).the brand is evaluated and judged at this microscope stage, formulating a certain attitude towards the brand. The twain dimensions at play here are brand judgments (rational) and brand feelings (emotional).the former denotes the impression consumers h ave of a brand, and how they evaluate the brand. The opinion in this case is formed rationally and based on three criteria, quality, reliability and superiority. Brand feelings on the other hand are the emotional reactions by consumers to brands and their marketing efforts. What feelings does the brand evoke in the consumer, and in the social environment? Are these feelings intense or not, positive or negative? These feelings can very strong and can have an affect on brand observation during actual use of the product. These feelings are based on various factors, namely, warmth, pleasure, tension, security, social acceptance and self respect. (Keller, 2002)Brand resonance once when the consumer has acquired a positive idea of the brand in both a rational and an emotional sense, a solid base is created to further jump on to the last stage. This stage answers the question whether the consumer is willing to enter into a (lasting) relationship with a brand. If this stage is attained, the n its considered as the brand has achieved true brand loyalty, where the consumer identifies him/herself with the values of the brand to a considerable degree and is willing to invest in a relationship. Brand resonance is an ultimate relationship between a brand and a consumer. The niggardliness of the bond can be measured using factors like loyalty, emotional bond, macrocosm a particle of a brand community and active brand involvement. (Keller, 2002)Brand equity if used appropriately, possesses a enormous potential to create advantages and bene conk outs for the firm, the trade and the consumer. Some of the bene holds of strong brand equity being, improved perceptions of product performance, greater loyalty, less vulnerability to competitive marketing actions and marketing crises, larger margins , more inelastic consumer response to price increases and more elastic consumer response to price decreases ,greater trade cooperation and support ,increased marketing communication eff ectiveness on with licensing opportunities and additional brand extension opportunities.(Wood ,2000 Feldwick, 1996)2.5 Brand equity and brand extensionBrand equity can be leveraged by building it, borrowing it, or by buying it. Building brand equity is not an easy task due to the rapid increase in the number of brands and the intense competition that is prevalent in many industries. Thus, the brands generally prefer to opt for the alternatives to building brand equity i.e. by borrowing it or buying it. (Moisescu, 2005 Tuominen, 1999) Since the study focuses on the role of brand equity in brand extensions, leveraging brand equity by borrowing it, will be discussed.Borrowing brand equity According to Tuominen (1999), many firms borrow on the brand equity in their brand names by extending living brand names to other products, which is referred to as brand extension. There are ii types of brand extensions namely, a line and a socio-economic class extension. A line extension is when a current brand name is used to enter new market segment in the existing product class, whereas, a category extension is when the current brand name is used to enter a different product class. A line extension march ons when a company introduces additional items in the same product category under the same brand name. A line extension often involves a different size, color, flavor or ingredient, a different form or a different application for the brand (Richard Elliot, 2006). Products in line extensions are technically congruent, i.e., similar in many attributes. They belong to the same product category or subclass. The vast majority of new-product activity consists of line extensions. Excess manufacturing capacity often drives a company to introduce additional items. The company might want to meet the consumers desire for variety. The company may recognize a latent consumer want and try to capitalize on it (Moisescu, 2005). The company may want to match a competitors successful li ne extension. Many companies introduce line extensions primarily to command more ledge space from resellers. Line extensions involve risks. There is a chance that the brand name will lose its specific meaning. This is called the line-extension trap (Eun Young Kim, 2000) .The other risk is that many line extensions will not sell enough to cover their development and promotion costs. Furthermore, even when they sell enough, the sales may come at the expense of other items in the line. A line extension works best when it takes sales outside from competing brands, not when it cannibalizes the companys other products (Moisescu, 2005).A category extension hails when a company decides to use an existing brand name to launch a product in a new product category. Category extensions capitalize on the brand image of the core product or service to efficiently inform consumers and retailers about a new product or service (Richard Elliot, 2006).The potential bene matchs of category extensions in clude immediate name actualisation and the transference of benefits associated with a familiar brand. A well-regarded brand name gives the new product instant comprehension and earlier acceptance (Eun Young Kim, 2000). It enables the company to enter into new-product categories more easily. Moreover, category extensions eliminate the high costs of establishing a new brand and often reduce the costs of gaining distribution (Eun Young Kim, 2000 Dennis A. Pitta, 1995). Category extensions in addition involve risks. The new product might disappoint buyers and damage their respect for the companys other products. The brand name may lose its special positioning in the consumers mind through over-extension. (Dennis A. Pitta, 1995) Brand dilution is said to occur when consumers no longer associate a brand with a specific product or extremely similar products (Richard Elliot, 2006). Companies that are tempted to transfer their brand name must explore how well the brands associations fit the new product. The best result would occur when the brand name builds the sales of both the new product and the existing product. An acceptable result would be when the new product sells well without affecting the sales of the existing product. The overcome result would be when the new product fails and hurts the sales of the existing product (Tuominen, 1999).Transferring an existing brand name to a new product category requires great care. In order to successfully maintain and further leverage the existing brand equity and to prevent it from any damage, a brand needs to carefully extend itself by maintaining perceptual fit, competitive leverage, and benefit transfer. Where in perceptual fit means that the consumer must perceive the new item to be ordered with the parent brand, competitive leverage means that the new item must be comparable or superior to other products in the category and benefit transfer means that the benefit offered by the parent brand is desired by consume rs of products in the new category (Dennis A. Pitta, 1995 Tuominen, 1999).To use brand equity efficiently and appropriately and to further maintain perceptual fit, competitive leverage and benefit transfer, a brand needs to know and consider various factors while deciding upon a brand extension strategy. Consumers beliefs and feelings about the pilot light brand are likely to be transferred, only when the extension product is perceived as a member of the original brand family (Abhishek Dwivedi, 2007).The greater the fit / simile perceived by consumers between the extension product and the original brand, the more likely, the affect associated with the original brand would be transferred to the extension product. Thus the consumer perception of fit is s the most important construct in a consumer evaluation of brand extension. The consumer perception of fit serves as a heuristic instigate in a consumer brand extension evaluation process because one of the functions of similarity is to allow people to make educated guesses in the face of limited knowledge with the brand extension (Leslie de Chernatony, 2001). The extension product is new to the consumers so if it is perceived as similar to the original brand, the consumers will be able to make inferences or judgments about the new extension based on these similarities. The perceived fit will be achieved when a consumer perceives that the new extension product is consistent with the parent brand ,or a family member of the brand name, and then affect or attitude transference will be more likely to occur ,to facilitate the brand extension evaluation. It is widely accepted that fit perceptions between an extension and its parent brand determines consumer evaluations of brand extensions and there is a positive relationship between the fit perceptions and consumers attitudes toward the extension. (Abhishek Dwivedi, 2007 Havard Hansen, 1998)2.6 Dimensions of fitThe perception of fit is an important determinant but th ere still considerable variances about its dimensions in the literature. The most customary beliefs that have been used to define the dimensions of fit are similarity ,relatedness, habituality, and brand concept consistency. These concepts define the perception of fit from different aspects, but they also have some overlaps. (Langlotz, 2008 Izabella b.2009)2.6.1 resemblance In most research similarity refers to how alike the original product and the extension product are in terms of features and attributes. The consumer similarity judgment involves comparing or matching features between the original product category and the new extension product category. The more features that overlap or match between the two classes of products, the more likely it is that these two products will be perceived to belong to the same cognitive category (Dr. Ashish Sharma, 2007) .Besides, shared features between two product classes, similarity also refers to shared benefits, which means that two products have a common goal. Similarity can also be used to refer to sharing same practise situations, or being complementary in usage. From the firms perspective similarity also refers to manufacturing synergies or the firms ability to transfer the marketing, operating or manufacturing capability from the original product to the new extension product ( Izabella b.2009). According to Aaker Keller (1990), similarity is based on three elements, complement, substitute, and transfer. Complement indicates the extent to which consumers view two product classes as sharing the same usage context. Substitute is the extent to which consumers perceive two product classes can replace each other in satisfying the same need. Transfer is the extent to which the perceived ability or skill of a manufacturing business that is required for the extension overlaps with that of the parent brands. Consumer perceived similarity plays an important role in brand extension evaluation. It can enhance the tra nsferability of perceived quality of the brand to the extension, and directly affect the attitude towards the extension the higher the level of similarity, the more favorable the attitude toward brand extension (Langlotz, 2008).2.6.2 Typicality It is used to measure the consumers perception of fit between the extension product and the original family mark products. According to Tauber (2001), when an extension shares more features of current family branded products, it will be a more typical member of the family brand and the affect transference will be more likely to occur on the new extension. Typicality refers to how representative the extension product category is of the original family branded products .An extension product may be perceived as a typical member of the original brand family not only because it shares many natural features of the original product, but also because it represents the family brand image at a high level. Typicality is basically a broader view of sim ilarity .It also includes some non product related aspects like the brand image. Typicality has an impact on consumer brand extension evaluations til now the notion of typicality may be more useful measurement of fit perception when the original brand has more than one existing product, because it measures how representative the new extension is of the brand family. (Tauber, 2001 Vukasovic, 2001)2.6.3 Relatedness It is another word used to describe the fit between the extension product and the original brand .It refers to the strength of the association between the brands parent category and the target extension category (Vukasovi, 2001). The consumer attitudes transference is more likely to occur on extensions which are closely related to the parent categories. Relatedness is a similar concept to similarity. It depends on the similarity of common features, complementarities in a common usage situation, and substitutability in providing a common function. However, relatedness is a more inclusive construct than similarity. The notion of similarity only refers to the common physical features between the original product category and the extension category. It does not accommodate the notion of conceptual coherence i .e, sometimes two product categories are perceived to be related to each other conceptually not physically. So it can be concluded that relatedness offers a broader view of similarity. (Langlotz, 2008).Like the concept of typicality, the notion of relatedness defines consumer perceptions of fit on the concept of similarity, but they both offer some idea that is more than the similarity concept. These two concepts indicate that the consumer perceptions of fit in brand extension evaluations include not only physical product similarities, but also consistencies at some non physical levels, for example the brand image level and product conceptual level. (Langlotz, 2008 Vukasovic, 2001)2.6.4 Brand concept consistency Although both concepts of typicality and relatedness capture some non physical aspects of fit, the non product aspects of fit are accommodated more by the concept of brand concept consistency. A brand concept is the brand image, which is made up of specific associations that differentiate the brand from other competing brands. It is the unique abstract meaning that is derived from a particular condition of product features (Tauber, 2001). Langlotz (2008) reveals that when consumers evaluate a brand extension, they not only take into account information about the product feature similarity, but also the concept consistency between the brand concept and the extension. The brand concept consistency is more non product related and is more about the brand image than the physical features. The more that consumers think the extension is consistent with the parent brand concept or image, the more favorable consumer attitudes are toward the extension. Thus those extensions, which are very different from the parent product cat egory physically, can also be perceived as fitting with the parent brand, as long as they have consistent images and concepts with the parent brand. Compared with the notion of similarity, brand concept consistency captures a totally different aspect of fit. However it is believed to be equally important to the similarity between the extension product and the original product in a consumer brand extension evaluation process. The concept of consumer fit perceptions in brand extension evaluation is incomplete without either similarity or brand concept consistency (Tauber, 2001 Vukasovic, 2001).2.7 Role of Consumer knowledge in brand extension evaluationsConsumer knowledge is indicated as one of the moderating variables that have an impact on consumer fit perceptions in the brand extension evaluation process (Ma, 2005). Thus, review of the importance of the consumer fit perception in a brand extension evaluation, and its dimensions is followed with the review of consumer knowledge.2.7. 1 Influence of knowledge on consumers behaviors Consumers with high and low knowledge react differently in a variety of consumer behaviors like information processing evaluation strategies and decision making. The differences between high and low knowledge consumers are addressed in three related areasDifferences in cognitive structure ,capabilities of analysis, inference and memory,Differences in internal knowledge transfer,Differences in similarity judgments between brands,Differences in fit perception in brand extension evaluations. (Phau, 2003)