Customer Based Brand Equity

Updated: Mar 30, 2019



A brand is often thought of as just a company, product, or service. According to the American Marketing Association (AMA), a brand is a "name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition." Many practicing managers think of a brand as status: as something that has actually created a certain amount of awareness, reputation, and prominence in the marketplace. Artists know a brand is how an experience makes someone feel.

Customer based brand equity is the differential effect that brand knowledge has on consumer response to the marketing of that brand. This approaches brand equity from the perspective of the general people. The power of a brand lies in what customers have learned, felt, seen, and heard about the brand as a result of their experiences over time.

Brand awareness and brand recognition are the two components to brand knowledge. Brand awareness is related to the strength of the brand node or trace in memory, which can be measured as a person’s ability to identify the brand under different conditions. Brand recognition is people’s ability to confirm prior exposure to the brand when given the brand as a cue.​ Brand recall is people’s' ability to retrieve brand from memory when given the product category, the needs fulfilled by the category, or a purchase or usage situation as a cue. The difference between recognition and recall is that recognizing the brand requires responding to a brand element directly, while recalling happens when someone has a reason to think of a brand and can identify the brand without a visual cue. Brand image, the perception that is formed in the stakeholder's mind about a product/service/company, is the collaboration of elements in forming a bigger picture of brand identity. This includes the name, logo, slogans, associations, and behavior a company uses to ensure that the right image forms in the minds of people. Stakeholder orientation is acknowledging that due to the interdependent nature of life and the human foundation of business, a business needs to create value with and for its various stakeholders (customers, employees, vendors, investors, communities, etc.).

Everything and everyone around a business relies on each other to continue operating. Each interaction has a consequence, positive or negative. Brand attributes are those descriptive features that characterize a product or service.​ Attributes demonstrate the potential productivity of people coming together for a purpose. Brand benefits are the personal value and meaning that consumers attach to the product or service attributes.

Brand resonance describes the nature of the ultimate relationship and level of identification that the customer has with the brand. Characterized in terms of intensity as well as activity. Intensity: ​the depth of the psychological bond that customers have with the brand (strength of the attitudinal attachment and sense of community). Activity: motivated by loyalty (repeat purchase rates and the extent to which customers seek out brand information, events, and other loyal customers). These two dimensions of brand resonance can be broken down into four categories: 1. behavioral loyalty, 2. attitudinal attachment, 3. sense of community, and 4. active engagement.​​ Behavioral loyalty can be gauged in terms of repeat purchases and the amount or share of category volume attributed to the brand, that is, the "share of category requirements," or how often and how much. Beauty (or brand salience) is in the eye of the beholder.​ In other words, the more people choose a certain brand over any other, the more they start to identify with that chosen brand.

Brand building is the careful development and implementation of creative brand strategies involved in managing a brand. Three helpful brand building models are brand positioning, brand resonance, and brand value chain.

  • Brand positioning model: describes how to establish competitive advantages in the minds of customers in the marketplace;

  • Brand resonance model: describes how to take these competitive advantages and create intense, active loyalty relationships with customers for brands; and

  • Brand value chain model: describes how to trace the value creation process to better understand the financial impact of marketing expenditures and investments to create loyal customers and strong brands.

The brand resonance model lists a series of steps for building a strong brand: 1. establishing the proper brand identity, 2. creating the appropriate brand meaning, 3. eliciting the right brand responses, and 4. forging appropriate brand relationships with customers. Achieving these four steps, in turn, means establishing six brand building blocks: brand salience, brand performance, brand imagery, brand judgments, brand feelings, and brand resonance.​

Brand performance describes how well the product or service meets customers' more functional needs. Five important types of attributes often underlie brand performance: 1. Primary ingredients and supplementary features, 2. product reliability, durability, and serviceability, 3. service effectiveness, efficiency, and empathy, 4. style and design, plus 5. price.

Brand imagery refers to the more intangible aspects of the brand, such as: 1. user profiles, 2. purchase and usage situations, 3. personality and values, and 4. history, heritage, and experiences. Brand judgments are customers' personal opinion about and evaluations of the brand, which consumers form by putting together all the different brand performance and imagery associations. Four types are particularly important: judgments about quality, credibility, consideration, and superiority. Brand credibility​ describes the extent to which customers see the brand as credible in terms of three dimensions: perceived expertise, trustworthiness, and likability. Brand feelings are customers' emotional responses and reactions to the brand. It is not enough for a brand to be just respected. It must transcend to become a name or symbol that emotionally binds a company with the desires and aspirations of its customers.

Six important types of brand-building feelings: 1. warmth, 2. fun, 3. excitement, 4. security, 5. social approval, and 6. self-respect. The first three types of feelings are experiential and immediate, increasing in level of intensity; the last three types of feelings are private and enduring, increasing in level of gravity.

Resonance requires a strong personal attachment beyond having a positive attitude to viewing the brand as something special in a broader context. Conveying a sense of community provides a broader meaning for the brand. Perhaps the strongest affirmation of brand loyalty occurs when customers are engaged, or willing to invest time, energy, money, or other resources in the brand beyond what was spent during purchase or consumption of the brand.

Customer based brand equity remembers that people love to buy, but they hate to be sold to. It is not as effective to focus on pushing people somewhere with promotions as it is to pull them in by reciprocating as a community. People want to support each other, spend time together, plus go places among friends and family. A brand is not simply what a business does, but how and why a business does it. To determine the true value of a company, ask who will be benefited by every action of the brand.

Blog compiled from online music marketing encyclopedia with terms relevant to CBBE. Check out which sources are behind each term noladeafchild.com/lexipedia.


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