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CHAPTER2:CUSTOMER-BASEDBRANDEQUITY,KevinLaneKellerTuckSchoolofBusinessDartmouthCollege,Customer-BasedBrandEquity,“Thedifferentialeffectthatbrandknowledgehasonconsumerresponsetothemarketingofthatbrand.”Keller,1993,Customer-BasedBrandEquity,DifferentialeffectDifferencesinconsumerresponseBrandknowledgeAresultofconsumersknowledgeaboutthebrandConsumerresponsetomarketingChoiceofabrandRecallofcopypointsfromanadResponsetoasalespromotionEvaluationsofaproposedbrandextension,BrandEquityasa“Bridge”,ReflectionofpastinvestmentsinthemarketingofabrandDirectionforfuturemarketingactionsorprograms,MakingaBrandStrong:BrandKnowledge,Brandknowledgeisthekeytocreatingbrandequity.Brandknowledgeconsistsofabrandnodeinmemorywithavarietyofassociationslinkedtoit.Brandknowledgehastwocomponents:brandawarenessandbrandimage.,SourcesofBrandEquity,BrandawarenessBrandrecognitionBrandrecallBrandimageStrong,favorable,anduniquebrandassociations,BrandAwarenessAdvantages,LearningadvantagesRegisterthebrandinthemindsofconsumersConsiderationadvantagesLikelihoodthatthebrandwillbeamemberoftheconsiderationsetChoiceadvantagesAffectchoicesamongbrandsintheconsiderationset,EstablishingBrandAwareness,Increasingthefamiliarityofthebrandthroughrepeatedexposure(forbrandrecognition)Forgingstrongassociationswiththeappropriateproductcategoryorotherrelevantpurchaseorconsumptioncues(forbrandrecall),CreatingaPositiveBrandImage,BrandAssociationsDoesnotmatterwhichsourceofbrandassociationNeedtobefavorable,strong,anduniqueMarketersshouldrecognizetheinfluenceoftheseothersourcesofinformationbybothmanagingthemaswellaspossibleandbyadequatelyaccountingforthemindesigningcommunicationstrategies.,TheFourStepsofBrandBuilding,EnsureidentificationofthebrandwithcustomersandanassociationofthebrandincustomersmindsEstablishthetotalityofbrandmeaninginthemindsofconsumersElicitthepropercustomerresponsestothebrandidentificationandbrandmeaningConvertbrandresponsetocreateanintense,activeloyaltyrelationshipbetweencustomersandthebrand,FourQuestionsCustomersaskofBrands,Whoareyou?(brandidentity)Whatareyou?(brandmeaning)Whataboutyou?WhatdoIthinkorfeelaboutyou?(brandresponses)Whataboutyouandme?WhatkindofassociationandhowmuchofaconnectionwouldIliketohavewithyou?(brandrelationships),SalienceDimensions,DepthofbrandawarenessEaseofrecognitionandrecallStrengthandclarityofcategorymembershipBreadthofbrandawarenessPurchaseconsiderationConsumptionconsideration,DepthandBreadthImportance,Theproductcategoryhierarchyshowsusnotonlythedepthofawarenessmattersbutalsothebreadth.Thebrandmustnotonlybetop-of-mindandhavesufficient“mindshare,”butitmustalsodosoattherighttimesandplaces.,ProductCategoryStructure,Tofullyunderstandbrandrecall,weneedtoappreciateproductcategorystructure,orhowproductcategoriesareorganizedinmemory.,PerformanceDimensions,PrimarycharacteristicsandsupplementaryfeaturesProductreliability,durability,andserviceabilityServiceeffectiveness,efficiency,andempathyStyleanddesignPrice,ImageryDimensions,UserprofilesDemographicandpsychographiccharacteristicsActualoraspirationalGroupperceptionspopularityPurchaseandusagesituationsTypeofchannel,specificstores,easeofpurchaseTime(day,week,month,year,etc.),location,andcontextofusagePersonalityandvaluesSincerity,excitement,competence,sophistication,andruggednessHistory,heritage,andexperiencesNostalgiaMemories,JudgmentDimensions,BrandqualityValueSatisfactionBrandcredibilityExpertiseTrustworthinessLikeability,BrandconsiderationRelevanceBrandsuperiorityDifferentiation,FeelingsDimensions,WarmthFunExcitementSecuritySocialApprovalSelf-respect,ResonanceDimensions,BehavioralloyaltyFrequencyandamountofrepeatpurchasesAttitudinalattachmentLovebrand(favoritepossessions;“alittlepleasure”)ProudofbrandSenseofcommunityKinshipAffiliationActiveengagementSeekinformationJoinclubVisitwebsite,chatrooms,Application:IdentifytheKeyDriversofBrandEquity,BrandBuildingImplications,Customersownbrands.Donttakeshortcutswithbrands.Brandsshouldhaveaduality.Brandsshouldhaverichness.Brandresonanceprovidesimportantfocus.,CreatingCustomerValue,Customer-brandrelationshipsarethefoundationofbrandresonanceandbuildingastrongbrand.Thecustomer-basedbrandequitymodelcertainlyputsthatnotionfrontandcenter.,Isacompanyconsumer-centric?,Isthecompanylookingforwaystotakecareofyou?Doesthecompanyknowitscustomerswellenoughtodifferentiatebetweenthem?Issomeoneaccountableforcustomers?Isthecompanymanagedforshareholdervalue?Isthecompanytestingnewcustomeroffersandlearningfromtheresults?,Sources:LarrySeldenandGeoffreyColvin,2004.,CustomerRelationshipManagement(CRM),Usesacompanysdatasystemsandapplicationstotrackconsumeractivityandmanagecustomerinteractionswiththecompany,CustomerEquity,BlattbergandDeighton(1996)offereightguidelinesasameansofmaximizingcustomerequity:Investinhighest-valuecustomersfirstTransformproductmanagementintocustomermanagementConsiderhowadd-onsalesandcross-sellingcanincreasecustomerequityLookforwaystoreduceacquisitioncostsTrackcustomerequitygainsandlossesagainstmarketingprogramsRelatebrandingtocustomerequityMonitortheintrinsicretainabilityofyourcustomerConsiderwritingseparatemarketingplansorevenbuildingtwomarketingorganizationsforacquisitionandretentionefforts,CustomerEquity,ThesumoflifetimevaluesofallcustomersCustomerlifetimevalue(CLV)isaffectedbyrevenueandbythecostofcustomeracquisition,retention,andcross-sellingConsistsofthreecomponents:ValueequityBrandequityRelationshipequityRust,Zeithamal&Lemon,2004,RelationshipofCustomerEquitytoBrandEquity,Customersdrivethesuccessofbrands

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