Customer-Based Brand Equity

The customer-based brand equity model incorporates theoretical advances and managerial practices in understanding and influencing consumer behavior. It provides a unique point of view as to what brand equity is and how it should best be build, measured, and managed. It helps to answer the questions: What makes a brand strong? and How do you build a strong brand?

The CBBE model looks at brand equity from the consumer’s point of view. The basic premise of the CBBE model is that 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; essentially, the power of a brand lies in what resides in the minds of customers. The challenge in building a strong brand is ensuring that consumers have the right type of experiences with products and services so that the desired thoughts, feelings, images, beliefs, perceptions, opinions, and so on become linked to the brand. With that in mind, a formal definition of customer-based brand equity is, the differential effect that brand knowledge has on consumer response to marketing of that brand. In other words, how will the firm’s brand equity influence the effect of marketing on the target audience?

Making a brand strong through brand knowledge

Brand knowledge is the key to creating brand equity because it creates the differential effect that drives brand equity.

Brand knowledge has two components:

the consumer’s ability to identify the brand under different conditions
consumer’s perceptions about a brand, as reflected by the brand associations held in consumer memory

Customer-based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favorable, and unique brand associations win memory.

So, what causes brand equity to exist? How do marketers create it? How do you create brand awareness? How do you create brand image?

Marketers must convince consumers that there are meaningful differences among brands and establishing a positive brand image in consumer memory-strong, favorable, and unique brand associations-goes hand-in-hand with creating brand awareness to build customer-based brand equity.

Brand awareness consists of:

consumers’ ability to confirm prior exposure to the brand when given the brand as a cue. Will they be able to recognize the brand as one to which they have already been exposed?
consumer’s ability to retrieve the brand from memory when given the product category, the needs fulfilled by the category, or a purchase or usage situation as a cue.

Creating brand awareness means increasing the familiarity of the brand through repeated exposure. The more a consumer “experiences” the brand by seeing it, hearing it, or thinking about it, the more likely he or she is to strongly register the brand in memory. So, anything that causes consumers to experience a brand name, symbol, logo, character, packaging, or slogan – including advertising and promotion, sponsorship and event marketing, publicity and public relations, and outdoor advertising- can increase familiarity and awareness of that brand element. The more elements the marketer can enforce the better to building awareness.

Creating positive brand image takes marketing programs that link strong, favorable, and unique associations to the brand in memory. Brand image can also be created in a variety of ways other than marketing programs: from direct experience, through information from nonpartisan sources such as Consumer Reports, from word-of-mouth, and from inferences the consumer makes himself. It is important for marketers to monitor and manage brand image on a continuous basis.

Building a strong brand: 4 steps

The CBBE model looks at building a brand as a sequence of steps, each of which is contingent on successfully achieving the objectives of the previous one. This is known as the “branding ladder,” from identity to meaning to responses to relationships. We cannot establish meaning unless we  have created identity; responses cannot occur unless we have developed the right meaning; and we cannot forge a relationship unless we have elicited the proper responses.

Who are you? Ensure identification of the brand with customers and an association of the brand in customers’ minds with a specific product class or customer need.
What are you? Firmly establish the totality of brand meaning in the minds of customers by strategically linking a host of tangible and intangible brand associations with certain properties.
What about you? What do I think or feel about you? Elicit the proper customer responses to this brand identification and brand meaning.
What about you and me? What kind of association and how much of a connection would I like to have with you? Convert brand response to create an intense, active loyalty relationship between customers and the brand.

The customer-based brand equity pyramid and component building blocks

Six brand building blocks help to provide structure for developing significant brand equity for the firm. Significant brand equity can only be achieved by reaching brand resonance at the top of the pyramid. Marketers can take two routes to brand resonance, up the left side or up the right side. Both start with salience and hopefully end with resonance. Using performance and judgments to build equity represents a more rational route, whereas using imagery and feelings represents a more emotional route. Although more costly and time consuming, most strong brands were built by going up both sides of the pyramid.

Brand salience measures awareness of the brand, for example, how often and how easily the brand is evoked under various situations or circumstances. To what extent is the brand easily recalled or recognized? How pervasive is this brand awareness?
Brand performance describes how well the product or service meets customers’ more functional needs. How well does the brand rate on objective assessments of quality? To what extent does the brand satisfy consumer’s needs?
Brand imagery is the way people think about a brand abstractly, rather than what they think the brand actually does. It depends on the extrinsic properties of the product or service, including how the brand attempts to meet consumers’ psychological or social needs.
Brand judgments are customers’ personal opinions about and evaluations of the brand, which consumers form by putting together all the different brand performance and imagery associations. The four most important judgements are quality, credibility, consideration and superiority.
Brand feelings are customers’ emotional responses and reactions to the brand, as well as the social currency evoked by the brand.
Brand resonance focuses on the ultimate relationship and level of identification that the customer has with the brand. Brand resonance describes the nature of this relationship and the extent to which customers feel that they are “in sync” with the brand.

Detailed descriptions of the building blocks can be found below.

Brand salience measures awareness of the brand, for example, how often and how easily the brand is evoked under various situations or circumstances. A highly salient brand is one that has both depth and breadth of brand awareness, such that customers always make sufficient purchases as well as always think of the brand across a variety of settings in which it could possibly be employed or consumed. Brand salience is an important first step in building brand equity, but is usually not sufficient.

Needs Satisfied: answers the questions, What basic functions does the brand provide to customers? Brand awareness ensures that customers know which of their needs the brand – through these products – is designed to satisfy.

Category Identification: brand awareness helps customers understand the product or service category in which the brand competes and what products or services are sold under the brand name. Brand awareness gives the product an identity by linking brand elements to a product category and associated purchase and consumption or usage situations.

Brand performance describes how well the product or service meets customers’ more functional needs. To create brand loyalty and resonance, marketers must ensure that consumers’ experiences with the product at lease meet, if not actually surpass, their expectations.

Primary Characteristics and Secondary Features: customers have beliefs about the levels at which the primary characteristics of the product operate (low, medium, high, or very high) Marketers must manage these expectations to make sure that the product exceeds customer beliefs, rather than underperform customer beliefs.

Product Reliability: measures the consistency of performance over time and from purchase to purchase
Product Durability: is the expected economic life of the product
Product Serviceability: the ease of repairing the product if needed

Service Effectiveness: measures how well the brand satisfies customers’ service requirements
Service Efficiency: describes the speed and responsiveness of service
Service Empathy: is the extent to which service providers are seen as trusting, caring, and having the customer’s interests in mind

Style and Design: how a product looks and feels, or how a product sounds or smells

Price: how relatively expensive or inexpensive the brand is, and whether it is frequently or substantially discounted

Brand imagery is the way people think about a brand abstractly, rather than what they think the brand actually does. It depends on the extrinsic properties of the product or service, including how the brand attempts to meet consumers’ psychological or social needs. Imagery refers to more intangible aspects of the brand.

User Profiles: the type of person or organization that uses the brand. Can be based on descriptive demographic factors or more abstract psychographic factors.

Purchase and Usage Situations: under what conditions or situations consumers use or should use the brand. Examples include the channel (department store, specialty store, internet) or time of day, week, month, or location (inside the home, outside the home) or if usage is formal or informal, for example.

Personality and Values: consumer experience and marketing can dictate brand personality traits. For example, modern, old-fashioned, lively, exotic, etc. There are five main dimensions of brand personality:

  • sincerity (down to earth, honest, wholesome, cheerful)
  • excitement (daring, spirited, imaginative, up to date)
  • competence (reliable, intelligent, successful)
  • sophistication (upper class and charming)
  • ruggedness (outdoorsy and tough)

History, Heritage and Experiences: these types of associations may recall distinctly personal experiences and episodes or past behaviors and experiences of friends, family, or others. They can be highly personal and individual, or more public and shared by many people. These associations involve more specific concrete examples that transcend the generalizations that make up the usage imagery.

Brand judgments are customers’ personal opinions about and evaluations of the brand, which consumers form by putting together all the different brand performance and imagery associations. The four most important judgements are quality, credibility, consideration and superiority.

Quality: is the brand perceived as low, medium, or high quality

Credibility: describes the extent to which customers see the brand as credible in terms of three dimensions: perceived expertise, trustworthiness, and likability.

Consideration: depends in part on how personally relevant customers find the brand and is a crucial filter in terms of building brand equity. Brands must be be given serious consideration and deemed relevant to closely embrace it. This is dependent upon strong and favorable brand associations created as part of brand image.

Superiority: measures the extent to which customers view the brand as unique and better than other brands. Superiority is absolutely critical to building intense and active relationships with customers and depends to a great degree on the number and nature of unique brand associations that make up brand image.

Brand feelings are customers’ emotional responses and reactions to the brand, as well as the social currency evoked by the brand.

Warmth: The brand evokes soothing types of feelings and makes consumers feel a sense of calm or peacefulness. Consumers may feel sentimental, warmhearted, or affectionate about the brand. Hallmark is a brand typically associated with warmth.

Fun: Upbeat types of feelings make consumers feel amused, lighthearted, joyous, playful, cheerful and so on. Disney is a brand often associated with fun.

Excitement: The brand makes consumers feel energized and that they are experiencing something special. Brands that evoke excitement may generate a sense of elation, of “being alive,” or being cool, sexy, or so on.

Security: The brand produces a feeling of safety, comfort, and self-assurance. As a result of the brand, consumers do not experience worry or concerns that they might have otherwise felt.

Social Approval: Consumer feel that others look favorably on their appearance, behavior, and so on. This approval may be a result of direct acknowledgment of the consumer’s use of the brand by others or may be less overt and a result of attribution of product use to consumers.

Self-Respect: The brand makes consumers feel better about themselves; consumers feel a sense of pride, accomplishment, or fulfillment. A brand like Tide laundry detergent is able to link its brand to “doing the best things for the family” to many homemakers.

Brand resonance focuses on the ultimate relationship and level of identification that the customer has with the brand. Brand resonance describes the nature of this relationship and the extent to which customers feel that they are “in sync” with the brand.

Loyalty: we can gauge behavioral loyalty in terms of repeat purchases and the amount or share of category volume attributed to the brand, that is, the “share of category requirements.” In other words, how often do customers purchase a brand and how much do they purchase?

Attitudinal Attachment: or personal attachment. Viewing the brand as something special in a broader context.

Sense of Community: an important social phenomenon in which customers feel a kinship or affiliation with other people associated with the brand, whether fellow brand users or customers, or employees or representatives of the company.

Active Engagement: when consumers are engaged, they are willing to invest time, money, energy or other resources in the brand beyond those expended during purchase or consumption of the brand.

In summary, the customer-based brand equity model provides a road map and guidance for brand building, a yardstick by which brands can assess their progress in their brand-building efforts as well as a guide for marketing research initiatives.