10. Customer-based brand equity (Part 2) - Toledo (1).pptx

# Customer-based brand equity Customer-based brand equity is built upon consumer knowledge of a brand and can be strategically developed through advertising and portfolio management. ## 1. Customer-based brand equity ### 1.1 Understanding brand knowledge Brand knowledge is the foundation of customer-based brand equity. It encompasses everything consumers know and think about a brand. This knowledge is crucial because it influences how consumers perceive and respond to a brand's offerings. #### 1.1.1 Components of brand knowledge Brand knowledge consists of two primary components: * **Brand awareness (Recognition):** This refers to the extent to which consumers are familiar with a brand. It addresses the question: "Are we known?" * **Brand image:** This refers to what consumers know and think about a brand – its associations, attributes, benefits, and overall perception. It addresses the question: "What are we known for?" #### 1.1.2 The role of brand knowledge in consumer perception Brand knowledge acts as a filter through which consumers process information about a brand. Strong brand knowledge can lead to: * **Increased familiarity and preference:** Consumers are more likely to choose brands they recognize and have positive associations with. * **Reduced perceived risk:** A well-known brand can signal quality and reliability, making consumers feel more secure in their purchase decisions. * **Enhanced purchase intentions:** Positive brand knowledge directly translates into a greater likelihood of purchase. #### 1.1.3 Measuring brand knowledge Evaluating brand knowledge involves assessing both recognition and image: * **Recognition:** This can be measured by asking consumers if they have heard of a brand or if they can recall it in various contexts. * **Image:** This is assessed by understanding the attributes and benefits consumers associate with a brand. This often involves techniques like "laddering" to uncover deeper, experiential, or symbolic benefits beyond functional attributes. ### 1.2 Building brand equity through advertising Advertising plays a pivotal role in shaping brand knowledge and, consequently, building brand equity. Effective advertising can achieve several objectives: #### 1.2.1 Stimulating attendance and engagement Guest lectures and events can be used to stimulate attendance and engagement, with the potential for video recordings to be shared if sufficient student presence is achieved. #### 1.2.2 Increasing brand awareness and recognition Advertising campaigns are essential for making a brand known to consumers. The goal is to ensure the brand registers in consumers' minds. #### 1.2.3 Shaping brand image and associations Beyond mere recognition, advertising aims to create specific perceptions and associations in the minds of consumers. This involves communicating the brand's values, benefits, and unique selling propositions. #### 1.2.4 Enhancing attention and memory Originality in advertising can increase consumer attention and improve memory for the brand and its messaging, especially when the advertisement feels somewhat familiar. This can be achieved through a balance of novelty and recognition. #### 1.2.5 The role of attention in advertising effectiveness Attention is a critical resource that consumers allocate efficiently due to the abundance of information. Advertising must capture and hold attention to be effective. * **Top-down attention (endogenous):** This is driven by the consumer's internal goals and interests. * **Bottom-up attention (exogenous):** This is captured by stimuli that are salient or novel in the environment. The level of entertainment provided by an advertisement, both before and after the brand is presented, can significantly influence its impact. #### 1.2.6 Experiential and symbolic differentiation Brands can differentiate themselves not just on functional attributes like price and quality, but also on experiential and symbolic benefits. For instance, a brand like Renova doesn't just sell toilet paper; it sells wellbeing and decoration, tapping into higher-level consumer needs. ### 1.3 Brand portfolios and brand architecture A company's brand portfolio and architecture significantly impact how its brands are perceived and how brand equity is managed. #### 1.3.1 Brand extensions Brand extensions involve using an existing brand name for new products. * **Line extension:** This occurs when a brand name is transferred to a new product within the same or a closely related product category. * **Category extension:** This occurs when a brand name is transferred to new products outside of the original product category. The success of brand extensions is influenced by: * **Product-level similarity:** The degree to which the features of the new product are similar to those of the original product. * **Concept consistency:** The degree to which the new product fits the brand's established concept or meaning in consumers' minds. * **Perceived fit:** The overall subjective evaluation of how well a brand extension works. #### 1.3.2 The brand relationship spectrum The brand relationship spectrum describes how brands are positioned within a company's portfolio, influencing the degree to which brands are separated in consumers' minds. * **House of brands:** In this strategy, individual brands are positioned with distinct identities, minimizing cross-category conflicts and reputational risk. This approach offers precise positioning but can lead to higher complexity and less efficiency in marketing communications, with limited positive spillover between brands. * **Branded house:** Here, a single, dominant brand name is used across a wide range of products and categories. This strategy offers low complexity and marketing communication efficiency, with strong positive spillover effects. However, it carries higher reputational risk, as a problem with one product can negatively impact the entire brand. * **Endorsed brands:** This approach involves a master brand endorsing individual sub-brands. The master brand lends credibility, while sub-brands can maintain some degree of distinctiveness. * **Sub-brands:** These are new brands that carry the master brand's name, often with a modifier, to denote a specific product or service within the master brand's umbrella. #### 1.3.3 Growing a brand portfolio Companies strategically manage their brand portfolios to leverage existing equity and enter new markets. This involves decisions about whether to create new brands or extend existing ones. #### 1.3.4 Strategies for competing with private labels Brands like Renova can differentiate themselves from private labels by: * **Adding experiential or symbolic benefits:** Moving beyond functional attributes to create emotional connections. * **Focusing on differentiation:** Emphasizing unique qualities and brand personality. * **Building brand awareness and recognition:** Ensuring the brand stands out and is memorable. ### 1.4 Categorization and consumer choice How products are categorized influences consumer perceptions and choices. #### 1.4.1 Categorization based on features vs. benefits Consumers can categorize products based on their attributes or the benefits they provide. * **Attribute-based categorization:** Grouping products by their technical specifications or physical characteristics (e.g., type of cola, ingredients). * **Benefit-based categorization:** Grouping products by the outcomes or solutions they offer to consumers (e.g., diet drinks for health, refreshing beverages for thirst). #### 1.4.2 Levels of categorization Products can be categorized at different levels: * **Superordinate:** Broad categories (e.g., Beverages). * **Basic:** Mid-level categories (e.g., Soft drinks, Juices). * **Subordinate:** Specific types within a category (e.g., Diet colas, Lemon limes). This hierarchical categorization impacts how consumers search for and evaluate products. #### 1.4.3 Competition levels Competition can be understood at various levels: * **Product form competition:** Brands offering similar product forms (e.g., diet colas). * **Generic competition:** Brands offering similar functions or benefits (e.g., beverages for hydration). * **Budget competition:** Brands competing for the same consumer spending, regardless of category (e.g., food and entertainment competing with soft drinks for disposable income). ### 1.5 Elements of value Beyond traditional product attributes, consumer value is increasingly understood through a broader set of elements. #### 1.5.1 Functional, emotional, and life-changing benefits Consumers seek value from products and services that provide: * **Functional benefits:** Such as quality, convenience, and cost savings. * **Emotional benefits:** Such as reduced anxiety, fun, and aesthetics. * **Life-changing benefits:** Such as hope, self-transcendence, and personal growth. #### 1.5.2 Designing for value Understanding the elements of value helps businesses measure and deliver what consumers truly want, moving beyond solely focusing on product ingredients as drivers of quality perceptions. ### 1.6 Understanding product differentiation and market dynamics Consumer preferences and market outcomes are influenced by various factors, including the social context and the dynamics of innovation. #### 1.6.1 Social influence on choice In social markets, consumer choices can be influenced by the choices of others, leading to phenomena like popular "hits" that gain widespread adoption, sometimes unpredictably. #### 1.6.2 The impact of advertising originality Original advertisements tend to grab more attention and are better remembered by consumers. This originality, when combined with a sense of familiarity, can significantly enhance brand recall. #### 1.6.3 The power of attention Herbert Simon famously noted that "a wealth of information creates a poverty of attention." In today's information-rich environment, capturing and retaining consumer attention is paramount for any marketing effort. #### 1.6.4 The dilution model Introducing additional goals in marketing efforts can sometimes undermine the perceived instrumentality of a shared path, suggesting a need for focused and clear marketing objectives. #### 1.6.5 Product category competition and consumer evaluation When evaluating brands within a category, consumers consider various attributes. The importance they place on each attribute (e.g., taste, color, size, sustainability, price) will shape their preferences and purchase decisions. > **Tip:** When building a brand, consider not only the functional attributes of your product but also the experiential and symbolic benefits that resonate with consumers on a deeper level. This can lead to stronger brand equity and differentiation. > **Example:** Renova's strategy of positioning toilet paper as a decorative and wellbeing-enhancing product exemplifies moving beyond functional attributes to build a stronger brand image and equity. > **Tip:** In advertising, strive for a balance between originality and familiarity. Originality captures attention, while familiarity makes the message more accessible and memorable, especially when dealing with information overload. > **Example:** Ads that are novel yet relate to common consumer experiences or brand archetypes are often more effective than those that are purely abstract or entirely conventional. --- # Brand architecture and portfolio strategies This topic explores how companies organize and manage their brands to achieve strategic objectives, focusing on different architectural models and growth strategies for brand portfolios. ### 2.1 Understanding brand architecture Brand architecture refers to the organizational structure of brands within a company, defining the relationships between them and how they are presented to consumers. It dictates the degree to which brands are separated or linked in consumers' minds. #### 2.1.1 The brand relationship spectrum The brand relationship spectrum illustrates the range of how brands are perceived by consumers, from highly distinct to closely integrated. This spectrum helps define the optimal brand architecture for a company. ##### 2.1.1.1 House of brands In a "house of brands" architecture, a company owns multiple distinct brands, each with its own identity, positioning, and target audience. These brands operate relatively independently, minimizing any direct association with the parent company. * **Advantages:** * Precise positioning for each brand. * Avoids cross-category conflicts. * Shields the parent company from reputational risks associated with individual brands. * Allows for specialized marketing communications for each brand. ##### 2.1.1.2 Branded house A "branded house" architecture uses a single, dominant brand name across a wide range of products and services. The corporate brand acts as the primary identifier, with sub-brands or endorsements supporting specific offerings. * **Advantages:** * Leverages the equity of the main brand for new ventures. * Offers efficiency in marketing communications. * Facilitates positive spill-over effects of brand equity across offerings. * Reduces complexity by consolidating brand-building efforts. ##### 2.1.1.3 Endorsed brands and sub-brands These are intermediate positions on the spectrum. * **Endorsed brands:** Individual brands that are clearly linked to a parent brand, but still maintain a degree of distinctiveness. The parent brand's endorsement provides credibility. * **Sub-brands:** Brands that are extensions of a primary brand, carrying the parent brand's name along with a unique identifier for a specific product or service. ### 2.2 Strategies for growing a brand portfolio Companies can expand their brand portfolios through various strategic approaches, primarily involving the use of existing brand equity in new product development. #### 2.2.1 Line extensions A line extension involves introducing a new product under an existing brand name that is within the same or a closely related product category. This strategy leverages the familiarity and trust associated with the parent brand to reduce the risk and cost of launching a new product. > **Tip:** Line extensions are most successful when the new product is perceived to be a good fit with the existing brand's core attributes and brand concept. #### 2.2.2 Category extensions A category extension, also known as brand extension, transfers an existing brand name to new products that are outside of the original product category. This can be a more ambitious strategy, aiming to capitalize on brand equity in entirely new markets. > **Tip:** The success of category extensions depends heavily on the perceived consistency between the original brand's concept and the new product category. #### 2.2.3 Factors influencing brand extension evaluation The perceived fit of brand extensions is crucial for their success and is influenced by two key dimensions: * **Product-level similarity (feature fit):** This refers to the degree of similarity in functional attributes and performance characteristics between the original product and the extended product. A high feature fit indicates that the new product shares tangible qualities with the original. * **Brand concept consistency (concept fit):** This relates to the alignment of the underlying brand meaning, values, and associations with the new product category. A high concept fit means the new product resonates with the essence and identity of the original brand. The evaluation of brand extensions can be categorized based on the combination of these fits: * **High feature fit, high concept fit:** Generally leads to the most favorable evaluation. * **High feature fit, low concept fit:** May be successful if the functional similarity is strong enough to overcome conceptual differences. * **Low feature fit, high concept fit:** Can be successful if the brand's underlying essence is transferable and appealing to the new category. * **Low feature fit, low concept fit:** Typically results in the least favorable evaluation and highest risk of failure. #### 2.2.4 Growing a brand portfolio: A matrix perspective The decision to extend a brand can be visualized using a matrix that considers the product category (same/new) and the brand (existing/new). This helps in understanding different portfolio growth scenarios: * **Existing Brand, Same Category:** This is a typical line extension. * **Existing Brand, New Category:** This is a category extension. * **New Brand, Same Category:** Introducing a new brand within an existing product category. * **New Brand, New Category:** Creating a completely new brand for a new product in a new category. ### 2.3 Strategic considerations for brand portfolio management Effective brand portfolio management requires careful consideration of market dynamics, consumer perceptions, and competitive landscapes. #### 2.3.1 Dealing with private labels Private labels, or store brands, represent a significant competitive force. Companies with established national brands need to develop strategies to counter their rise. Options include: * **Differentiating:** Emphasizing unique brand values, quality, or emotional benefits that private labels may not offer. * **Reducing price:** Competing more directly on price, though this can erode margins and brand equity. * **Making their own private label:** If unable to compete directly, a company might develop its own private label to capture market share. #### 2.3.2 Experiential and symbolic differentiation Beyond functional attributes like price and quality, brands can differentiate themselves through experiential and symbolic benefits. Renova, for instance, successfully positioned toilet paper not just as a functional product, but as an element of well-being and home decoration, demonstrating the power of offering experiences and symbolic value. #### 2.3.3 The power of brand awareness and knowledge Building strong brand awareness and deep brand knowledge in consumers' minds is fundamental to brand equity. * **Recognition:** Consumers need to be aware of the brand. * **Image:** What the brand is known for, including its associations, perceived quality, and personality. This knowledge influences consumer evaluation and purchase decisions. The adage "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times" highlights the importance of consistent and focused brand building. #### 2.3.4 The influence of competition and market dynamics The competitive landscape, including the rise of private labels and the dynamics of cultural markets, can influence brand success. For example, in artificial cultural markets, early popularity can lead to disproportionately greater success over time, suggesting a network effect. #### 2.3.5 Choice architecture and categorization How products are presented and categorized can influence consumer choice. * **Categorization based on features:** Grouping products by their technical specifications or attributes. * **Categorization based on benefits:** Grouping products by the solutions or advantages they offer to consumers. Understanding these categorization strategies helps in designing effective product assortments and marketing displays. #### 2.3.6 Segmentation dimensions Effective brand strategies often rely on a clear understanding of segmentation dimensions, which can be: * **General:** Applicable across many product categories (e.g., demographic, psychographic). * **Product-specific:** Relevant to a particular product category. * **Observable:** Characteristics that can be directly seen or measured (e.g., age, color). * **Unobservable:** Internal states or motivations (e.g., attitudes, needs). #### 2.3.7 Competition levels Understanding different levels of competition is crucial for strategic planning: * **Product category competition:** Brands competing within the same specific product category (e.g., diet colas). * **Generic competition:** Brands competing for the same consumer need, even if the product form differs (e.g., beverages). * **Budget competition:** Brands competing for the consumer's disposable income, regardless of product category (e.g., food and entertainment). * **Product form competition:** Brands competing based on the specific format or type of product (e.g., diet colas vs. regular colas). #### 2.3.8 Attention and originality in advertising In an information-rich environment, capturing consumer attention is a primary challenge. * **Originality in advertising:** Original and novel ads tend to increase attention and memory for the brand and its imagery, especially when they also feel familiar. * **Attention:** A key resource that consumers allocate efficiently. Information overload creates a poverty of attention. * **Top-down attention:** Endogenous attention driven by the consumer's interests and goals. * **Bottom-up attention:** Exogenous attention captured by stimuli in the environment. The entertainment value of advertisements can also impact consumer engagement and brand recall. --- # Factors influencing brand extension evaluation This section examines the critical factors of product-level similarity and concept consistency that significantly influence the perceived fit and success of brand extensions. ### 3.1 Evaluating brand extensions The evaluation of brand extensions is a crucial process for marketers seeking to leverage existing brand equity into new product categories. Two primary dimensions guide this evaluation: product-level similarity and concept consistency. These dimensions, when assessed in relation to a parent brand, determine the perceived fit of a brand extension in the minds of consumers. ### 3.2 Product-level similarity Product-level similarity refers to the degree of shared features and attributes between an existing product under a brand and a proposed new product for a brand extension. A higher degree of product-level similarity suggests that the new product shares tangible characteristics, functionalities, or performance aspects with the established offerings. This can lead to a stronger perceived fit because consumers can more readily transfer their existing knowledge and expectations about the brand to the new product based on its concrete features. #### 3.2.1 High vs. Low product-level similarity * **High product-level similarity:** Occurs when the new product shares significant functional attributes, components, or manufacturing processes with existing products. For example, extending a brand known for reliable household appliances into a new line of kitchen appliances would generally exhibit high product-level similarity. * **Low product-level similarity:** Occurs when the new product has very few, if any, shared tangible features or functionalities with the parent brand's existing products. For instance, extending a brand known for software into a line of physical accessories would represent low product-level similarity. ### 3.3 Concept consistency Concept consistency, also known as brand concept consistency, focuses on the extent to which a brand extension aligns with the core meaning, values, and promise of the parent brand. This dimension is less about tangible features and more about the abstract associations and emotional connections consumers have with the brand. A consistent brand concept ensures that the extension does not dilute or contradict the established brand identity. #### 3.3.1 High vs. Low concept consistency * **High concept consistency:** Arises when the new product strongly resonates with the underlying brand philosophy, personality, or emotional benefits that consumers associate with the parent brand. For example, extending a brand known for luxury and exclusivity into a new line of high-end fashion accessories would demonstrate high concept consistency. * **Low concept consistency:** Occurs when the brand extension's offering deviates significantly from the established brand meaning, potentially creating dissonance or confusion for consumers. An example would be a brand associated with ethical sourcing and natural products extending into mass-produced, synthetic goods. ### 3.4 Perceived fit of brand extensions The interplay between product-level similarity and concept consistency directly shapes the perceived fit of a brand extension. This perceived fit is a critical determinant of consumer acceptance and the potential success of the extension. * **High feature fit, high concept fit:** This scenario represents the ideal situation for a brand extension. When a new product is both tangibly similar to existing offerings and conceptually aligned with the brand's meaning, consumers are likely to perceive a strong fit, leading to positive evaluations and increased purchase likelihood. > **Example:** A brand known for high-quality coffee extending into premium coffee makers would likely exhibit high feature fit (related to coffee-making) and high concept fit (aligned with premium beverage experience). * **High feature fit, low concept fit:** In this case, the product may share functional similarities, but it does not align with the core brand concept. This can lead to a moderate or even negative perceived fit, as consumers may question the brand's true identity or intent. > **Example:** A brand known for athletic footwear extending into novelty, non-performance-oriented fashion items might have some shared manufacturing aspects (feature fit) but would lack conceptual alignment with its athletic heritage (low concept fit). * **Low feature fit, high concept fit:** Here, the new product may not share many tangible features but strongly aligns with the brand's abstract meaning or emotional promise. This can still result in a good perceived fit, particularly for brands that are more abstractly defined or have a strong lifestyle component. > **Example:** A brand associated with adventure and exploration extending into a line of durable outdoor gear would have high concept fit (adventure) even if the specific product features differ from its original offerings. * **Low feature fit, low concept fit:** This represents the weakest scenario for a brand extension, where the new product offers little in terms of tangible similarity and contradicts or fails to align with the brand's core concept. Such extensions are highly likely to be perceived as a poor fit and may lead to negative consumer reactions. > **Example:** A brand known for comforting, everyday hygiene products extending into highly technical, industrial equipment would demonstrate low feature and low concept fit. ### 3.5 Illustrative examples of evaluation dimensions The evaluation of brand extensions can be visualized using a matrix that plots product-level similarity (feature fit) against concept consistency. This helps to categorize potential extensions based on their perceived fit: > **Example:** Consider a brand extending into different product categories: > > * **Calculator:** Might have high feature fit (e.g., if the parent brand is tech-focused) but low concept fit (if the brand is about emotional well-being). > * **Bracelet:** Could have low feature fit (if the parent brand is electronics) but potentially high concept fit (if the brand is about personal style or wellness). > * **Flashlight:** Might have high feature fit (if the parent brand is about utility or outdoor equipment) but low concept fit (if the brand is about luxury fashion). > * **Cologne:** Could have low feature fit (if the parent brand is industrial) but high concept fit (if the brand is about personal grooming or attraction). This categorization helps understand why certain extensions are more successful than others, as it hinges on how well consumers mentally map the new offering onto their existing brand schema. --- # The role of advertising in brand building Advertising plays a crucial role in building brands by increasing brand awareness, driving revenue, and helping to navigate the challenges of information overload and attention scarcity. ### 4.1 Advertising and brand awareness Advertising is a primary tool for making consumers aware of a brand's existence and its offerings. Without effective advertising, potential customers may never learn about a product or service, regardless of its quality. #### 4.1.1 Getting noticed The first step in brand building is ensuring the brand gets noticed. Advertising aims to cut through the noise and capture the attention of the target audience. This is particularly important in markets with many competitors and a high volume of marketing messages. #### 4.1.2 The power of recognition and image Advertising contributes to brand knowledge, which is fundamental to brand equity. This involves two key aspects: * **Recognition:** Consumers need to be aware of the brand. Advertising helps build this familiarity. * **Image:** What consumers associate with the brand. Advertising shapes perceptions and communicates what the brand stands for. > **Tip:** Brands need to move beyond simply listing product ingredients or functional attributes. Advertising should also communicate experiential and symbolic benefits to create a stronger brand image. For example, a toilet paper brand might sell not just toilet paper, but well-being and decoration. #### 4.1.3 Originality in advertising Original advertisements are more effective at increasing attention and memory for both the brand and its visual elements. While familiarity can be beneficial, original approaches can break through clutter and make a lasting impression. > **Example:** An advertisement that presents a product in an unexpected or creative way is more likely to be remembered than one that follows a common or predictable format. ### 4.2 Advertising and revenue generation Beyond awareness, advertising directly contributes to revenue generation. By making consumers aware of products and shaping their perceptions, advertising can influence purchasing decisions. #### 4.2.1 From brand building to buy decisions Effective advertising builds a connection between the brand and the consumer, guiding them from recognition and positive image association towards the point of purchase. #### 4.2.2 Overcoming competition In competitive markets, advertising helps differentiate a brand from its rivals. This differentiation can be achieved through highlighting unique product features, benefits, or emotional connections. > **Tip:** Brands should consider how their advertising contributes to both the functional and emotional needs of consumers. ### 4.3 Navigating information overload and attention scarcity In today's media-saturated environment, consumers are bombarded with information, leading to a poverty of attention. Advertising must be strategically designed to overcome these challenges. #### 4.3.1 The information deficit Herbert Simon famously stated that a wealth of information creates a poverty of attention, necessitating efficient allocation of consumer focus. Advertising campaigns need to be designed with this scarcity in mind. #### 4.3.2 Capturing attention Advertising employs various techniques to capture and hold consumer attention. This can involve: * **Top-down, endogenous attention:** Appealing to existing interests and motivations of the consumer. * **Bottom-up, exogenous attention:** Using stimuli that naturally grab attention, such as surprising visuals or sounds. > **Tip:** Understanding the consumer's existing level of engagement (e.g., entertainment level before and after an ad) can help in designing more effective advertisements. #### 4.3.3 The impact of entertainment The level of entertainment provided in advertisements can significantly influence their effectiveness. Ads that are entertaining are more likely to hold attention and create a positive association with the brand. #### 4.3.4 Typical vs. original ads The prevalence of "typical" ads suggests a reliance on established formats. However, "original" ads, by their nature, are more adept at capturing attention and enhancing memory recall for the brand, particularly when they still feel somewhat familiar to the audience. > **Example:** While many ads for soft drinks might feature similar imagery of refreshing beverages and happy people, an ad that tells a unique story or uses an unconventional visual style is more likely to stand out. ### 4.4 Advertising and market dynamics Advertising influences consumer choices and market outcomes in various ways, including the perception of quality and the popularity of products. #### 4.4.1 Perceptions of quality Advertising can influence how consumers perceive the quality of a product. Beyond the inherent product attributes, branding and marketing messages play a significant role. #### 4.4.2 The influence of social factors Consumer choices and the popularity of products can be influenced by social dynamics, which advertising can leverage. In cultural markets, factors beyond inherent quality can drive success. > **Tip:** The success of a product or brand is not solely determined by its objective attributes but also by how it is perceived and positioned in the market through advertising and other branding efforts. --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Customer-based brand equity | The value premium that a company generates from a product with a recognizable name when compared to a generic equivalent. It is built through a deep understanding of how brand knowledge is formed and affects consumer responses. | | Brand knowledge | The totality of a consumers perceptions about a brand, encompassing brand awareness and brand image. It influences how consumers interpret information and make purchase decisions. | | Brand awareness | The extent to which consumers are familiar with the qualities or image of a particular brand of goods or services. It is a prerequisite for brand preference and purchase. | | Brand image | The set of beliefs, ideas, and impressions that a person holds regarding an object. In marketing, it refers to the perception of a brand in the minds of consumers. | | Brand extension | A marketing strategy where a firm uses a well-established brand name to introduce a new product. This can be within the same product category (line extension) or a different category (category extension). | | Line extension | A marketing strategy where a company uses an established brand name to introduce a new product within the same product category. Examples include different flavors, forms, or colors of an existing product. | | Category extension | A marketing strategy where a company uses an established brand name to introduce a new product outside of its original product category. This leverages the brand's equity to enter new markets. | | Product-level similarity | The degree to which the physical features and attributes of a new product resemble those of existing products under the same brand. High similarity can enhance perceived fit for brand extensions. | | Concept consistency | The degree to which a new product aligns with the core brand concept or meaning associated with the parent brand. Strong concept consistency is crucial for successful brand extensions. | | Perceived fit | The extent to which consumers believe a brand extension is appropriate and logical. It is influenced by both product-level similarity and concept consistency. | | House of brands | A brand architecture strategy where a company owns a collection of distinct, often unrelated, brands. Each brand has its own identity and target market, minimizing risk to the parent company. | | Branded house | A brand architecture strategy where a single brand is used across a variety of products and services. This approach leverages the strong equity of the parent brand for all offerings. | | Endorsed brands | A brand architecture strategy where a parent brand lends its name and reputation to a sub-brand, providing a degree of endorsement without complete integration. The sub-brand maintains some distinctiveness. | | Sub-brands | Brands that are associated with and benefit from a parent brand but also have their own distinct identities, names, and target audiences. They exist within a larger brand structure. | | Private label (store brand) | A brand that is owned and sold by a retailer. These brands often compete with national brands by offering similar products at lower prices. | | Experiential differentiation | Differentiating a brand based on the sensory, affective, intellectual, or relational experiences it provides to consumers, rather than purely functional attributes. | | Symbolic differentiation | Differentiating a brand by associating it with abstract meanings, values, or social status that resonate with consumers' self-concept or aspirations. | | Attention scarcity | The phenomenon where consumers have a limited capacity for attention in an information-rich environment. Marketers must design messages that can effectively capture and hold attention. | | Originality in advertising | Advertisements that deviate from typical or expected formats and content. Originality can increase attention, memory, and engagement with the brand. | | Top-down attention | Attention that is driven by internal goals, intentions, and expectations of the individual. It is a volitional form of attention. | | Bottom-up attention | Attention that is captured by salient or novel stimuli in the environment, regardless of the individual's current goals. It is an involuntary response. | | Laddering | A qualitative research technique used to uncover consumers" underlying motivations and values by progressively asking "why" questions about product attributes and benefits. | | Brand portfolio | The collection of all brands and product lines offered by a company. Managing the brand portfolio effectively involves strategic decisions about brand development, extension, and pruning. | | Retail choice architecture | The design of the environment in which consumers make purchasing decisions, including the arrangement of products, information presentation, and promotional strategies, influencing consumer choice. | | Common segmentation dimensions | The various criteria used to divide a broad consumer market into smaller, more homogeneous groups. These can include demographic, geographic, psychographic, and behavioral factors. | | Superordinate categorization | The highest level of product categorization, representing the broadest classification of items. For example, beverages is a superordinate category for soft drinks. | | Basic categorization | An intermediate level of product categorization, more specific than superordinate but less specific than subordinate. For example, soft drinks is a basic category. | | Subordinate categorization | The most specific level of product categorization, representing a narrow group of items. For example, diet colas or lemon-lime sodas are subordinate categories within soft drinks. |