SRI KRISHNA ADITHYA

COLLEGE OF ARTS AND SCIENCE

(Affiliated to Bharathiar University)
Kovaipudur, Coimbatore – 641 042.

UNIT 3
LEARNING OBJECTIVES
Brand Impact: Branding impact on buyers, Reasons which impact consumers’ buying
Decision – Brand impact on Competitors, Types of Brand Competition.

Brand loyalty: Definition, Factors affecting Brand Loyalty, Types of Brand Loyalty,
Advantages and Disadvantages of Brand Loyalty

Loyalty programmes: Definition and types of Loyalty Programs

Brand equity: Meaning and Definition, Types, Factors influencing brand equity, Models of
Brand Equity.

Brand Manager: Role and Qualities.

Brand Audit: Meaning, Steps in Brand Audit.

BRAND IMPACT ON BUYERS

Brands sway consumer behaviour by clicking with consumers’ self-image.
Advertisements depict lifestyles and levels of happiness that consumers want to experience,
and those serve as symbols of what marketers want their brands to represent. The ultimate
effect of a brand on consumer behaviour is largely based on how consumers subjectively
perceive and relate to the brand.
REASONS WHICH IMPACT CUSTOMERS’ BUYING DECISION
➢ Consumer Perception
➢ Identity Impact
➢ Peer Influence
➢ The App Effect
CONSUMER PERCEPTION
The effect of planting a clear brand message in consumers’ minds is that consumers can
personalize the message and begin to adopt the brand. The message put out to a target audience,
if consistent and memorable enough to get consumers’ attention in the first place, really is more
of a seed planted in consumers’ minds that then begins to develop into the brand’s image. A
brand’s image is not the product itself, nor is it the exact marketing message designed by
advertisers, but rather it's a personal perception of the product grown in the mind of each
consumer, according to the Association for Consumer Research.
IDENTITY IMPACT
Brand packaging, advertising, media attention on a brand and peer perception of a brand
contribute to a brand’s identity. A brand that meets or exceeds a consumer’s expectations can
end up adopted into a consumer’s life and shared with others. Consumers then can begin to see
a part of them symbolized by the brand. For example, your favourite brand of beer, line of
sportswear, cell phone or restaurant may have been introduced to you because each brand’s
message and quality somehow clicked with you; however, certain brands become your
“favourites” when you perceive them as somehow more integral than competing brands to your
self-image, culture, creative expression or lifestyle.
PEER INFLUENCE
For many consumers, when their family members or friends have adopted and trusted
a brand, they are more likely to trust that brand as well and extend that trust to all products
made by that brand. Marketing that highlights the personality of the brand rather than product
features or pricing speaks to those consumers more clearly, which can lead to greater brand
championing and sales.
THE APP EFFECT
Digital interaction via smartphone apps allows marketers to build deeper connections
with consumers than ever before. A branded app that provides information useful and relevant
to consumers’ lives instils in those consumers greater appreciation of the brand sponsoring the
app, according to a 2011 study by Indiana University professor Robert F. Potter. For example,
the study found that an informational app sponsored by Target that offered product reviews
proved to have more impact on consumer behaviour and brand favourability than a game app
sponsored by Gap. The effect of a brand that provides downloadable and interactive
information on a category that its products fall under is that consumers begin to talk back to
the brand by providing feedback, offering their own information and caring about the brand
enough to support it and keep it on top.
BRAND IMPACT ON COMPETITORS
Brand Competition can be defined as the rivalry between the companies offering the
similar line of products or services in the same target market and to the same target audience
with the goal to have the higher market share, increased revenues, huge profits, and growth as
compared to the contemporary brand at the marketplace. There is no such industry or the
marketplace where the businesses are not exposed to the competition. The competition has to
be faced to gain competitive advantage and loyalty from the customers.

TYPES OF BRAND COMPETITION

➢ Direct Competition
➢ Indirect Competition
➢ Replacement Competition

DIRECT COMPETITION

Direct Competition is faced by the brand from the other companies in the market that offer the
similar lines of products having comparable features and benefits plus to the same target market
and target customers.

For example, There is always a direct competition between the two smartphone mobile
companies namely Apple and Samsung and the even the customers of both the brand are
always at an argument endorsing the mobile brand that they are loyal to. There is always a
competition between the two brands on the facets of mobile interface, design aesthetics, and
the overall user experience.
INDIRECT COMPETITION

The component of indirect competition occurs when the two brands offer the similar line of
products but nature, attribute, and features are quite indifferent from each other plus the
business strategy and goals are also different from one another. The rivalry and competition
are not as tough as compared to the direct competition but the brands have to keep a watch on
the facet of indirect competition as well to stay consistently successful in the market.

For example: Mobile brands Apple and Oppo are the indirect competitors of each other as
Apple is majorly into luxury segment and Oppo offer the affordable range of cell phones. Their
brand strategies, target audience, and business goals are also different.

REPLACEMENT COMPETITION

Replacement competition is the tricky situation when your customer indulges in the purchase
of other product instead of choosing your product to which he has been committed for a longer
period of time.

For Example: Instead of buying comic books for their children, parents nowadays make them
watch cartoon videos on YouTube replacing books with the digital technology. Though it
depends on the case to case basis and subjective to the parental behaviour, this phenomenon
has been largely getting noticed.

BRAND LOYALTY

DEFINITION

“The situation in which a consumer generally buys the same manufacturer-originated

product or service repeatedly over time rather than buying from multiple suppliers within the
category"
"The degree to which a consumer consistently purchases the same brand within a
product class" (consumer behavior definition). It consists of a consumer's commitment to
repurchase or otherwise continue using the brand. It can be demonstrated by repeated buying
of a product or service, or other positive behaviors such as word of mouth advice. Loyalty
includes some degree of pre-dispositional commitment toward a brand
FACTORS AFFECTING BRAND LOYALTY

1.Product Quality: High quality products ensure high customer satisfaction which helps induce
brand loyalty amongst customers.

2.Brand Image: A customer-friendly brand image which offers a consistent brand equity is a
positive driver for making customers loyal towards a brand.

3.Percieved Value: The value offered by the brand versus the price paid is of importance. If the
customer feels it has value, it creates brand loyalty in the consumers mind. Value can be
increased by a loyalty discount or a loyalty program by companies.

4.Switching Cost: If a cheaper option is available with a similar product quality, customers can
switch their brand, and hence it is an important factor.

5.Availability & Service: Good products must be available when a customer requires it for
creating customer loyalty. Also, good after sales service also adds value to a positive mindset.

6.Customer Psychology: Sometime brand loyalty is totally depended on customer psychology,

where good products can have no loyalists and poor products can have good loyalty.
TYPES OF BRAND LOYALTY

Hard-core Loyal - who buy the brand all the

time.

Split Loyal - loyal to two or three brands.

Shifting Loyal - moving from one brand to

another.

Switchers - with no loyalty (possibly 'deal-

prone', constantly looking for bargains or
'vanity prone', looking for something
different

1. Hard-Core Loyal are those customers who buy the same brand over and over again & are
strong brand advocates.

2. Spilt loyal is the type of brand loyalty where customers have a strong product preference and
are loyal to 2 or 3 companies or brands only.

3. Shifting Loyal are those customers who keep moving from one brand to another.

4. Switchers is the type of brand loyalty where customers are not loyal towards any brand. They
simply look for the cheapest or best or most effective product irrespective of the brand or
company.

ADVANTAGES OF BRAND LOYALTY

1. Brand loyalty gives an edge over competitors by a higher brand recall.

2. Creates positive brand value and word of mouth helps in positive marketing.

3. Customers are willing to pay a premium also for their brand.

4. Saves costs on customer retention and helps get new customers onboard.

5. More products under the same brand get popular with loyal customers.
DISADVANTAGES OF BRAND LOYALTY

1. Sometimes companies become overconfident and start developing flaws in products or

services, which impacts them later.

2. Too much brand loyalty amongst customers makes them blind towards better products at a
cheaper price which are present in the market.

3. Companies with strong brand loyalty amongst customers often escape legal action for
scandals.

BRAND LOYALTY PROGRAM

DEFINITION
A loyalty program is a rewards program offered by a company to customers who
frequently make purchases. A loyalty program may give a customer free merchandise, rewards,
coupons, or even advance released products.
TYPES OF LOYALTY PROGRAMS
1. Purely Point Based Loyalty Systems
2. Pure Lifestyle Loyalty Programs
3. Tier Based Affinity Program
4. Community Based Programs
5. Coalition Programs
6. Hybrid Loyalty Programs
PURELY POINT BASED LOYALTY SYSTEMS
Point based loyalty systems have been on the market for quite a while now and they
can be seen almost everywhere. Customers earn points based on purchases. Accumulating
enough points means that the customer is eligible for free and discounted products or special
promotional items
PURE LIFESTYLE LOYALTY PROGRAMS
One of the main goals of marketing is to find a special niche that is likely to use your
product and target them aggressively. Alternatively, some companies use a targeted strategy to
expand their market to customers who are largely avoiding their product.
Turkish telecommunications company Turkcell uses the latter approach by having
separate loyalty programs for both young millennials and women. Marketing strategies and
rewards target these groups with separate offerings, such as expandable prepay data for the
younger crowd and special family plans for women.
TIER BASED AFFINITY PROGRAM

Tiered loyalty programs are similar to points systems, but members can upgrade their
level through either continued patronage, accumulated points or paying a membership fee.
These programs excel at creating an entire strategy out of being a loyal customer. Members get
to decide how to approach their rewards choices by bumping up to the next level or redeeming
their points now.

A common weakness of this type of program is that many of the ones seen have low-
tier rewards that are “not worth it” in the minds of most customers. The higher-level rewards
can start to seem unattainable as a result
COMMUNITY BASED PROGRAMS

A community-based loyalty program links in with already established groups and

communities within a localized area. Customers can use their membership to existing
organizations for discounts on products that group is more likely to use. Other programs let
customers forge new communities around the use of a product, giving your brand social
connectivity implications.

Vodaphone Cyprus lets users of their cellular network form communities with
discounts on both member-to-member and general communication. The more members that
join a set group, the deeper the discounts become.
COALITION PROGRAMS

A coalition type of loyalty program forges relationships with several brands or

companies. They use these allegiances to drive purchase behaviour and increase the value that
customers earn with their purchases.

Coalition programs demonstrate strong brand penetration through multiple levels and
types of businesses. A small business that manages to secure a partnership grows the value of
their brand while increasing visibility and potential footfall. These partnerships can be
complicated to set up and maintain both logistically and legally but the results usually pay off
in the end.
HYBRID LOYALTY PROGRAMS

The various types of loyalty programs we’ve already mentioned here, are just a broad
categorization of what some companies have done. Businesses can feel free to pick and choose
the aspects they think will benefit their sales and brand reputation.
BRAND EQUITY
MEANING AND DEFINITION
Brand Equity is the added value that endowed to products and services. This value may
be reflected in how consumers think, feel, and act with respect to the brand, as well as the price,
market share and profitability that the brand commands for the firm. Brand equity is an
important intangible asset that has psychological and financial value to the firm.
David Aaker defines brand equity as: “A set of assets and liabilities linked to a brand's
name and symbol that adds to or subtracts from the value provided by a product or service to a
firm and/or that firm's customers”
TYPES OF BRAND EQUITY
❖ Positive brand equity
The positive effect of the brand on the difference between the prices that the consumer accepts
to pay when the brand known compared to the value of the benefit received
❖ Negative brand equity
If consumers are willing to pay more for a generic product than for a branded one, however,
the brand is said to have negative brand equity

FACTORS INFLUENCING BRAND EQUITY

BRAND EQUITY MODELS

❖ Brand Asset Valuator
❖ Aaker Model
❖ Brandz
❖ Brand Resonance
 ❖ BRAND ASSET VALUATOR
Brand Asset Valuator (BAV) is developed by an advertising agency Young & Rubicam (Y&R).
There are four key components under BAV Model. They are:

• Differentiation
• Relevance
• Esteem
• Knowledge

DIFFERENTIATION

This measures the degree to which the brand is seen as different from others. It see
whether the brand has attracted consumers attention more than the competitors. The starting
point for all brands is differentiation. Measure this by asking questions about how often
consumers have come across your brand, if they recognize your brand, and how different it is
from your competitors.

As a brand matures, Brand Asset Valuator model states that Differentiation often
declines. It doesn’t always have to happen. Even though brands reach maturity, with good
management, a brand can continue its Differentiation. A low level of Differentiation is a clear
warning that a brand is fading.

RELEVANCE

Relevance measures the breadth of a brand’s appeal. It measures how appropriate the
brand is for the consumers. It analyses whether the consumers want to purchase the product or
service. It investigates if the product is relevant to consumers in regard to price, convenience,
and fulfilling their needs. Relevance can be determined by asking consumers how likely they
would be to purchase the product or service, regardless of whether or not they have purchased
the product or service in the past. Relevance alone is not key to a brand’s success. Rather, the
combination of Relevance & Differentiation determines the success. Brand Asset Valuator
model shows that there is a direct correlation between Relevance and market penetration.

ESTEEM

Esteem is the perceived quality and customer perceptions about growing popularity of
a brand. It is based on the principle whether the brand keep its assurances? The customer’s
response to a marketers’ brand building activity is driven by his perception of two factors;
quality and popularity. In the progression of building a brand, it follows Differentiation and
Relevance. It’s the customer’s response to a marketer’s brand-building activity. Brand Asset
Valuator tracks the ways in which brands gain Esteem, which helps us consider how to manage
consumer perceptions. Brand Asset Valuator identifies opportunities for leveraging a brand’s
Esteem

KNOWLEDGE

Knowledge measures the extent of the customer’s awareness of the brand and
understanding of its identity. The awareness levels about the brand and what it stands for shows
the familiarity that consumers share with the brand. True knowledge of the brand comes
through brand-building. When a brand has made through its Relevant Differentiation and
customers come to hold it in high Esteem. Brand Knowledge is the result and represents the
successful finale of building a brand. Knowledge means customer is aware of the brand and
understands what the brand or service stands for. Knowledge is not a result of media Spends.
High media spends against a weak idea will not yield results.

❖ AAKER MODEL

• Brand Loyalty
• Brand Awareness
• Perceived Quality
• Brand Associations
• Other Proprietary Brand Assets
BRAND LOYALTY
Brand loyalty—central construct in marketing, is a measure of the attachment that a
customer has to a brand. It reflects how likely a customer will switch to another brand,
especially when that brand makes a change, either in price or in product features. As brand
loyalty increases, the vulnerability of the customer base to competitive action is reduced.

BRAND AWARENESS

People will often buy a familiar brand because they are comfortable with the brand. Or
there may be an assumption that a brand that is familiar is probably reliable, in business to stay,
and of reasonable quality. A recognized brand will thus often be selected over an unknown
brand. The awareness factor is particularly important in contexts in which the brand must first
enter the consideration set. It must be one of the brands that are evaluated.
PERCEIVED QUALITY
A brand will have associated with it a perception of overall quality not necessarily based
on the knowledge of detailed specifications. Perceived quality will directly influence purchase
decisions and brand loyalty, especially when a buyer is not motivated or able to conduct a
detailed analysis. It can also support a premium price which, in turn, can create gross margin
that can be reinvested in brand equity. Further, perceived quality can be the basis for a brand
extension. If a brand is well regarded in one context, the assumption will be that it has high
quality in a related context.

BRAND ASSOCIATIONS
The underlying value of a brand name is often based on specific associations linked to
it. Associations such as Ronald McDonald can create a positive attitude or feeling that can
become linked to a brand such as McDonald’s. If a brand is well positioned on a key attribute
in the product class (such as service backup or technological superiority), competitors will find
it hard to attack.
OTHER PROPRIETARY BRAND ASSETS

The last three brand equity categories we have just discussed represent customers’

perceptions and reactions to the brand; the first is the loyalty of the customer and the fifth

category represents other proprietary brand assets such as patents, trademarks and channel

relationships. Brand assets will be most valuable if they inhibit or prevent competitors from

eroding a customer base and loyalty. These assets can take several forms. For example, a

trademark will protect brand equity from competitors who might want to confuse customers by

using a similar name, symbol, or package. A patent, if strong and relevant to customer choice,

can prevent direct competition. A distribution channel can be controlled by a brand because of

a history of brand performance.

 ❖ BRANDZ
Marketing research consultants Millward Brown and WPP have developed the BRANDZ
Model of brand strength, at the heart of which is the Brand Dynamics Pyramid. According to
this model, brand building involves a sequential series of steps, where each step is contingent
upon successfully accomplishing the previous step. The steps are as follows:
• Presence
• Relevance
• Performance
• Advantage
• Bonding
PRESENCE

Active familiarity based on past trial, saliency or knowledge of brand promise.

RELEVANCE

Relevant to consumer's needs, in the right price range or in consideration set.

PERFORMANCE

Felt to deliver acceptable product performance and is on the consumer's short-list.

ADVANTAGE

Felt to have an emotional or rational advantage over other brands in the category.

BONDING

Rational and emotional attachments to the brand to the exclusion of most other brands.

❖ BRAND RESONANCE

Brand resonance is characterized by strong connections between the consumer and the brand.
Brands with strong resonance benefit from increased customer loyalty and decreased
vulnerability to competitive marketing actions. The challenge for the brand is to ensure that the
customer has the right experience to create the right brand knowledge.

• Brand Salience
• Brand Performance
• Brand Imagery
• Brand Judgements
 • Brand Feelings
• Brand Resonance
BRAND SALIENCE
It relates to how often and easily the brand is evoked under various purchase or
consumption situations.
BRAND PERFOMANCE
It relates how the product or service meets customers functional needs.
BRAND IMAGERY
It deals with the extrinsic properties of the product or service including the ways in
which the brand attempts to meet the customers psychological or social needs.
BRAND JUDGEMENTS
It focuses on customers own personal opinions and evaluations.
BRAND FEELINGS
These are customers emotional responses and reaction with respect to the brand.
BRAND RESONANCE
It refers to the nature of the relationship that customers have with the brand and the
extent to which the customers to feel that they are in sync with the brand,
BRAND MANAGER

ROLE OF BRAND MANAGER

✓ Researching consumer markets and monitoring market trends

✓ Looking at the pricing of products and analyzing the potential profitability
✓ Exploring new ways to communicate with customers
✓ Generating names for new and existing products and services and coming up with
packaging designs
✓ Overseeing the production of TV, newspaper and magazine adverts
✓ Liaising with art designers, copywriters, media buyers and printers
✓ Ensuring the designs and messages in marketing literature and campaigns meet the
company brand and regulatory guidelines
✓ Monitoring consumer reactions through focus groups and market research
QUALITIES OF A BRAND MANAGER
✓ Have an instinctive feeling about future product concepts
✓ Have strong marketing skills and knowledge
✓ Be creative, entrepreneurial thinkers
✓ Have excellent communication and listening skills
✓ Enjoy working in a deadline-driven, creative environment.
BRAND AUDIT

MEANING

Brand Audit helps the brand and the company to focus on the existing as well the
prospective customers to meet their demands and expectations. It helps defining that why the
customer is loyal to the brand or not, what are the factors that acts as a pull factor and makes
the new customers reach out to the brand, and what steps need to be taken to devise a strategy
or a plan to keep the customers loyal to the brand amidst the tough competition in the market.
It helps the company to rebrand itself with the refined and revalued set of values, ethos, and
objectives along with the renewed corporate identity with the catchy logo,
tagline, vision, mission, and creative’s that are aligned with the nature, values, and objectives
of the brand.
STEPS TO CONDUCT BRAND AUDIT
✓ Create a brand summary and framework
✓ Determine the survey methods
✓ Competition check
✓ Review sales data
✓ Review web and social analytics
✓ Analyze the results
Create a brand summary and framework
The first step of the Brand Audit is to create a brand summary and the framework that
encompasses the intrinsic factors such as values, objectives, the tone of voice, logo, tagline,
and mascot amongst other along with the extrinsic factors such as marketing collaterals, sales
figures, marketing plans, and others. The entire history of the brand architecture and its
important elements needs to be studied in depth and figure out if it is working for the benefit
of the brand or not.
Determine the survey methods
For the Brand Audit results to be effective and of the optimum level, it is very important
to determine and select the survey methods that will bring the measurable results. The methods
vary from the email surveys, telephonic surveys, one-to-one meetings, and social media
surveys with the existing and prospective customers along with the crucial members of the
industry related to the brand. There are many agencies that help to conduct the audit and survey
in a successful manner. The questions asked in the survey should always be related to the brand
and the offerings along with the open-ended questions such as what do the customers expect
from the brand, does it need any improvisations, and are they happy with its offerings and way
the brand conducts itself in the market.
Competition check
Having a closer look at the competition by figuring out that what are they offering,
their target audience, the quantum of customers, marketing and sales strategies, brand values,
fundamentals, and objectives is an imperative step of the Brand Audit.
Review sales data
There has to be a thorough review of the sales data and figures over a period of time
determining the profit ratios and proper filtration of the customer data with the parameters such
as age, gender, location, income levels, and the nature of the purchase. The fluctuation of sale
prices also needs to be considered with the perspective of market cycles.
Review web and social analytics
Web analytics also needs to be reviewed by getting the number of hits and visits that
has been on the company website from the domestic and international markets as it results in
the level of brand value and awareness in the target markets. The same applies to the social
media handles of the brand.
Analyze the results
Once the audit is successfully completed with the measurable results in hand, it is
important to analyze the results without being biased towards the brand and work on the facets
that are inconsistent and needs improvement.