Brand awareness thus gives the product an identity by linking brand elements to a product category and associated purchase and consumption or usage situations. The depth of brand awareness measures how likely it is for a brand element to come to mind, and the ease with which it does so. A brand we easily recall has a deeper level of brand awareness than one that we recognize only when we see it. The breadth of brand awareness measures the range of purchase and usage situations in which the brand element comes to mind and depends to a large extent on the organization of brand and product knowledge in memory.1 To see how this works, consider the breadth and depth of brand awareness for Tropicana orange juice.

Tropicana

Consumers should at least recognize the Tropicana brand when it is presented to them. Beyond that, consumers should think of Tropicana whenever they think of orange juice, particularly when they are considering buying orange juice. Ideally, consumers would think of Tropicana whenever they were deciding which type of beverage to drink, especially when seeking a “tasty but healthy” beverage. Thus, consumers must think of Tropicana as satisfying a certain set of needs whenever those needs arise. One of the challenges for any provider of orange juice is to link the product to usage situations beyond the traditional one of breakfast—hence the industry campaign to boost consumption of Florida orange juice that used the slogan “It’s Not Just for Breakfast Anymore.”

As the Tropicana example suggests, to fully understand brand recall, we need to appreciate product category structure, or how product categories are organized in memory. Typically, marketers assume that products are grouped at varying levels of specificity and can be organized in a hierarchical fashion.2 Thus, in consumers’ minds, a product hierarchy often exists, with product class information at the highest level, product category information at the second-highest level, product type information at the next level, and brand information at the lowest level.

The beverage market provides a good setting to examine issues in category structure and the effects of brand awareness on brand equity. Figure 3-3 illustrates one hierarchy that might exist in consumers’ minds. According to this representation, consumers first distinguish between flavored and nonflavored beverages (water). Next, they distinguish between nonalcoholic and alcoholic flavored beverages. They further distinguish nonalcoholic beverages into hot drinks like coffee or tea, and cold drinks like milk, juices, and soft drinks. Alcoholic beverages are distinguished by whether they are wine, beer, or distilled spirits. We can make even further distinctions. For example, we can divide the beer category into no-alcohol, low-alcohol (or “light”), and full-strength beers, and divide full-strength beers by variety (ale or lager), by brewing method (draft, ice, or dry), by price and quality (discount, premium, or super-premium), and so on.

The organization of the product category hierarchy that generally prevails in memory will play an important role in brand awareness, brand consideration, and consumer decision making. For example, consumers often make decisions in a top-down fashion, first deciding whether to have water or some type of flavored beverage. If the consumer chooses a flavored drink, the next decision would be whether to have an alcoholic or a nonalcoholic drink, and so on. Finally, consumers might then choose a particular brand within the product category in which they are interested.

The depth of brand awareness will influence the likelihood that the brand comes to mind, whereas the breadth of brand awareness describes the different types of situations in which the brand might come to mind. In general, soft drinks have great breadth of awareness in that they come to mind in a variety of different consumption situations. A consumer may consider drinking one of the different varieties of Coke virtually any time, anywhere. Other beverages, such as alcoholic beverages, milk, and juices, have much more limited perceived consumption situations.

The product hierarchy shows us that not only the depth of awareness matters but also the breadth. In other words, the brand must not only be top-of-mind and have sufficient “mind share,” but it must also do so at the right times and places.

Breadth is an oft-neglected consideration, even for brands that are category leaders. For many brands, the key question is not whether consumers can recall the brand but where they think of it, when they think of it, and how easily and how often they think of it. Many brands and products are ignored or forgotten during possible usage situations. For those brands, the best route for improving sales may be not to try to improve consumer attitudes but, instead, increasing brand salience and the breadth of brand awareness and situations in which consumers would consider using the brand to drive consumption and increase sales volume.

Tax preparer H&R Block makes a concerted effort to make sure its brand is top-of-mind at all times, reminding consumers that tax-pertinent events happen all year round, such as when taking clients out to dinner, buying a new laptop computer, or looking for a new job.3 Consider the brand salience challenges for Campbell’s soup.

Campbell’s Soup

Ads for Campbell’s soup through the years have sometimes emphasized taste, with its long-time advertising slogan “Mmm, Mmm, Good,” or nutrition, with “Never Underestimate the Power of Soup.” Part of Campbell’s challenge in increasing sales may lie not so much in the consumer attitudes these slogans address as with memory considerations and the fact that people do not think of using or eating soup as often as they should for certain meal occasions. In 2010, Campbell launched a new ad campaign, “It’s Amazing What Soup Can Do,” showcasing the soup as an indispensible food for any occasion—paired with a variety of foods; poured over meat, pasta, or rice as a sauce; or used as an ingredient in a recipe. Creating a communication program for those consumers who already have a favorable attitude toward the brand that will help them remember it in more varied consumption settings may be the most profitable way to grow the Campbell’s soup franchise.4

In other words, it may be harder to try to change existing brand attitudes than to remind people of their existing attitudes toward a brand in additional, but appropriate, consumption situations.

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. For many customers in many situations, other considerations, such as the meaning or image of the brand, also come into play.

Creating brand meaning includes establishing a brand image—what the brand is characterized by and should stand for in the minds of customers. Brand meaning is made up of two major categories of brand associations related to performance and imagery. These associations can be formed directly, from a customer’s own experiences and contact with the brand, or indirectly, through advertising or by some other source of information, such as word of mouth.

The next section describes the two main types of brand meaning—brand performance and brand imagery—and the subcategories within each of those two building blocks.

One set of brand imagery associations is about the type of person or organization who uses the brand. This imagery may result in customers’ mental image of actual users or more aspirational, idealized users. Consumers may base associations of a typical or idealized

brand user on descriptive demographic factors or more abstract psychographic factors. Demographic factors might include the following:

• Gender. Venus razors and Secret deodorant have “feminine” associations, whereas Gillette razors and Axe deodorant have more “masculine” associations.8

• Age. Pepsi Cola, Powerade energy sports drink, and Under Armour performance clothing, shoes and accessories have positioned themselves as fresher and younger in spirit than Coke, Gatorade, and Nike, respectively.

• Race. Goya foods and the Univision television network have a strong identification with the Hispanic market.

• Income. Sperry Topsider shoes, Polo shirts, and BMW automobiles became associated with “yuppies”—young, affluent, urban professionals.

Psychographic factors might include attitudes toward life, careers, possessions, social issues, or political institutions; for example, a brand user might be seen as iconoclastic or as more traditional and conservative.

In a business-to-business setting, user imagery might relate to the size or type of organization. For example, buyers might see Microsoft as an “aggressive” company and L. L. Bean as a “caring” company. User imagery may focus on more than characteristics of just one type of individual and center on broader issues in terms of perceptions of a group as a whole. For example, customers may believe that a brand is used by many people and therefore view the brand as “popular” or a “market leader.”

A second set of associations tells consumers under what conditions or situations they can or should buy and use the brand. Associations can relate to type of channel, such as department stores, specialty stores, or the Internet; to specific stores such as Macy’s, Foot Locker, or Bluefly; and to ease of purchase and associated rewards (if any).

Associations to a typical usage situation can relate to the time of day, week, month, or year to use the brand; location—for instance, inside or outside the home; and type of activity during which to use the brand—formal or informal. For a long time, pizza chain restaurants had strong associations to their channels of distribution and the manner by which customers would purchase and eat the pizza—Domino’s was known for delivery, Little Caesar for takeout, and Pizza Hut for dine-in service—although in recent years each of these major competitors has made inroads in the traditional markets of the others.

Through consumer experience or marketing activities, brands may take on personality traits or human values and, like a person, appear to be “modern,” “old-fashioned,” “lively,” or “exotic.”9 Five dimensions of brand personality (with corresponding subdimensions) are sincerity (down-to-earth, honest, wholesome, and cheerful), excitement (daring, spirited, imaginative, and up-to-date), competence (reliable, intelligent, successful), sophistication (upper class and charming), and ruggedness (outdoorsy and tough).10

How does brand personality get formed? Any aspect of a brand may be used by consumers to infer brand personality. One research study found that consumers perceived nonprofit companies as being “warmer” than for-profit companies but as less competent. Further, consumers were less willing to buy a product made by a nonprofit than a for-profit company because of their perception that the firm lacked competence, but those purchasing misgivings disappeared when perceptions of the competency of the nonprofit were improved, for example, by a credible endorsement such as from the Wall Street Journal.11

Although any aspect of the marketing program may affect brand personality, marketing communications and advertising may be especially influential because of the inferences consumers make about the underlying user or usage situation depicted or reflected in an ad. For example, advertisers may imbue a brand with personality traits through anthropomorphization and product animation techniques; through personification and the use of brand characters; and through user imagery, such as the preppy look of Abercrombie & Fitch models.12 More generally, the actors in an ad, the tone or style of the creative strategy, and the emotions or feelings evoked by the ad can affect brand personality. Once brands develop a personality, it can be difficult for consumers to accept information they see as inconsistent with that personality.13

Still, user imagery and brand personality may not always be in agreement. When performance-related attributes are central to consumer decisions, as they are for food products, for example, brand personality and user imagery may be less closely related. Differences between personality and imagery may arise for other reasons too. For example, early in its U.S. brand development, Perrier’s brand personality was “sophisticated” and “stylish,” whereas its actual user imagery was not as flattering or subdued but “flashy” and “trendy.”

When user and usage imagery are important to consumer decisions, however, brand personality and imagery are more likely to be related, as they are for cars, beer, liquor, cigarettes, and cosmetics. Thus, consumers often choose and use brands that have a brand personality consistent with their own self-concept, although in some cases the match may be based on consumers’ desired rather than their actual image.14 These effects may also be more pronounced for publicly consumed products than for privately consumed goods because the signaling aspect of a brand may be more important under those conditions.15 Consumers who are high “self-monitors” and sensitive to how others see them are more likely to choose brands whose personalities fit the consumption situation.16

User and usage imagery is often an issue in the highly competitive automotive category. One company looking to sharpen its brand personality and imagery is Chrysler.

Chrysler

After a disastrous corporate marriage to Germany’s Daimler had been dissolved, Chrysler’s new partner Fiat set out to revitalize the brand, in part by injecting some Italian style and sex appeal. Determined to attract younger, hipper, and wealthier customers, Fiat developed new car designs similar to the quirky little cars most likely found in Rome. Fiat is not planning to walk away, however, from some of the equity in its existing brands such as the Dodge Ram pickup truck and Town & Country minivan. For the relatively new Chrysler 300, a $1 billion model makeover retained the powerful German-engineered transmission but added an elegant look and attitude. A two-minute, $9 million TV ad run during the Super Bowl used controversial rapper Eminem to boldly proclaim that the car was “Imported from Detroit.”17

Finally, brands may take on associations to their past and certain noteworthy events in the brand’s history. 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 well-known and shared by many people. For example, there may be associations to aspects of the brand’s marketing program, the color of the product or look of its package, the company or person that makes the product and the country in which it is made, the type of store in which it is sold, the events for which the brand is a sponsor, and the people who endorse the brand.

These types of associations can help create strong points-of-difference. In the midst of the recent major recession, Northern Trust used the fact that it was over 120 years old and had weathered many financial downturns through the years to reinforce trust and stability to its wealthy clientele.18 In any case, associations to history, heritage, and experiences draw upon more specific, concrete examples that transcend the generalizations that make up the usage imagery. In the extreme case, brands become iconic by combining all these types of associations into what is in effect a myth, tapping into enduring consumer hopes and dreams.19

A number of different types of associations related to either performance or imagery may become linked to the brand. We can characterize the brand associations making up the brand image and meaning according to three important dimensions—strength, favorability, and uniqueness—that provide the key to building brand equity. Successful results on these three dimensions produce the most positive brand responses, the underpinning of intense and active brand loyalty.

Creating strong, favorable, and unique associations is a real challenge to marketers, but essential to building customer-based brand equity. Strong brands typically have firmly established favorable and unique brand associations with consumers. Brand meaning is what helps produce brand responses, or what customers think or feel about the brand. We can distinguish brand responses as either brand judgments or brand feelings, that is, in terms of whether they arise from the “head” or from the “heart,” as the following sections describe.

Brand attitudes are consumers’ overall evaluations of a brand and often form the basis for brand choice.20 Brand attitudes generally depend on specific attributes and benefits of the brand. For example, consider Hilton hotels. A consumer’s attitude toward Hilton depends on how much he or she believes the brand is characterized by certain associations that matter to the consumer for a hotel chain, like location; room comfort, design, and appearance; service quality of staff; recreational facilities; food service; security; prices; and so on.

Consumers can hold a host of attitudes toward a brand, but the most important relate to its perceived quality and to customer value and satisfaction. Perceived quality measures are inherent in many approaches to brand equity. In the annual EquiTrend study by Harris Interactive, 20,000 consumers aged 15 or older rate a random selection of 60 brands from a total of 1,200 brands across 46 categories on several dimensions: Equity, Consumer Connection, Commitment, Brand Behavior, Brand Advocacy, and Trust. An Equity score is determined by a calculation of measures of Familiarity, Quality, and Purchase Consideration.21

Customers may also form judgments about the company or organization behind the brand. Brand credibility describes the extent to which customers see the brand as credible in terms of three dimensions: perceived expertise, trustworthiness, and likability. Is the brand seen as (1) competent, innovative, and a market leader (brand expertise); (2) dependable and keeping customer interests in mind (brand trustworthiness); and (3) fun, interesting, and worth spending time with (brand likability)? In other words, credibility measures whether consumers see the company or organization behind the brand as good at what it does, concerned about its customers, and just plain likable.22

FedEx

From its earliest advertising, “When It Absolutely, Positively Has to Be There Overnight,” FedEx has stressed its speed, skill, and dependability in shipping and delivery. Its most recent brand campaign, “We Understand,” reinforces that FedEx is “the perfect enabler and facilitator of great service and partnership.” Internationally, its “FedEx Delivers to a Changing World” ad campaign reinforces that “one of the constants in the world is FedEx.” The company wants customers to think of it as a trusted partner, with a commitment to reliable but cost-effective shipping all over the world. Its advertising, however, often uses humor and high production values. FedEx ads that run during the Super Bowl are often rated among the most enjoyable by consumers. Through its flawless service delivery and creative marketing communications, FedEx is able to establish all three dimensions of credibility: expertise, trustworthiness, and likability.23

Favorable brand attitudes and perceptions of credibility are important, but not important enough if customers don’t actually consider the brand for possible purchase or use. As Chapter 2 introduced, consideration depends in part on how personally relevant customers find the brand and is a crucial filter in terms of building brand equity. No matter how highly they regard the brand or how credible they find it, unless they also give it serious consideration and deem it relevant, customers will keep a brand at a distance and never closely embrace it. Brand consideration depends in large part on the extent to which strong and favorable brand associations can be created as part of the brand image.

Superiority measures the extent to which customers view the brand as unique and better than other brands. Do customers believe it offers advantages that other brands cannot? 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 the brand image.

Although all types of customer responses are possible—driven from both the head and heart—ultimately what matters is how positive they are. Responses must also be accessible and come to mind when consumers think of the brand. Brand judgments and feelings can favorably affect consumer behavior only if consumers internalize or think of positive responses in their various encounters with the brand.

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? For bottom-line profit results, the brand must generate sufficient purchase frequencies and volumes.

The lifetime value of behaviorally loyal consumers can be enormous.31 For example, a loyal General Motors customer could be worth $276,000 over his or her lifetime (assuming 11 or more vehicles bought and word-of-mouth endorsement that makes friends and relatives more likely to consider GM products). Or consider new parents. By spending $100 a month on diapers and wipes for 24–30 months, they can create lifetime value of as much as $3,000 for just one baby.

Behavioral loyalty is necessary but not sufficient for resonance to occur.32 Some customers may buy out of necessity—because the brand is the only product stocked or readily accessible, the only one they can afford, or other reasons. Resonance, however, requires a strong personal attachment. Customers should go beyond having a positive attitude to viewing the brand as something special in a broader context. For example, customers with a great deal of attitudinal attachment to a brand may state that they “love” the brand, describe it as one of their favorite possessions, or view it as a “little pleasure” that they look forward to.

Prior research has shown that mere satisfaction may not be enough.33 Xerox found that when customer satisfaction was ranked on a scale of 1 (completely dissatisfied) to 5 (completely satisfied), customers who rated Xerox products and services as “4”—and thus were satisfied—were six times more likely to defect to competitors than those customers who provided ratings of “5.”34

Similarly, loyalty guru Frederick Reichheld points out that although more than 90 percent of car buyers are satisfied or very satisfied when they drive away from the dealer’s showroom, fewer than half buy the same brand of automobile the next time.35 Creating greater loyalty requires creating deeper attitudinal attachment, through marketing programs and products and services that fully satisfy consumer needs.

The brand may also take on broader meaning to the customer by conveying a sense of community.36 Identification with a brand community may reflect 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. A brand community can exist online or off-line.37 Branding Brief 3-1 profiles three company-initiated programs to help build brand communities. A stronger sense of community among loyal users can engender favorable brand attitudes and intentions.38

Finally, 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 those expended during purchase or consumption of the brand.39 For example, customers may choose to join a club centered on a brand, receive updates, and exchange correspondence with other brand users or formal or informal representatives of the brand itself. Companies are making it increasingly easy for customers to buy a range of branded merchandise so they can literally express their loyalty.

BMW

BMW’s lifestyle business was started 15 years ago as a marketing initiative whose objectives were to broaden the brand’s presence and strengthen loyalty. The lifestyle division focuses primarily on selling mobility products, including bicycles and skateboards for kids, and aims for a profit margin (7%) similar to what BMW generates from sales of its cars. More than 2,000 products are sold, from €39 ($52) Mini rain boots to the highly regarded €2750 ($3,620) lightweight M Carbon Racer bike from BMW’s M performance unit. These are not your run-of-the-mill products, though. BMW’s €79 ($105) Snow Racer sled has replaceable metal runners, a suspension-system in the red steering ski, and a horn to warn inattentive passersby. The battery-powered Baby Racer, designed internally by BMW Designworks, comes in three different models and costs €79 ($106). Winner of several design prizes and featured in the MOMA in New York, it sells 60,000 units a year. In China, which is now its third-largest market for car sales, BMW opened a store selling merchandise a year before it began assembling cars in the country and had more than 50 BMW stores there by the end of 2012.40

Customers may choose to visit brand-related Web sites, participate in chat rooms, or post to discussions. In this case, customers themselves became brand evangelists and ambassadors and help communicate about the brand and strengthen the brand ties of others. Strong attitudinal attachment or social identity or both are typically necessary, however, for active engagement with the brand to occur.

In short, brand resonance and the relationships consumers have with brands have two dimensions: intensity and activity. Intensity measures the strength of the attitudinal attachment and sense of community. Activity tells us how frequently the consumer buys and uses the brand, as well as engages in other activities not related to purchase and consumption.

The basic premise of the brand resonance model is that the true measure of the strength of a brand is the way consumers think, feel, and act with respect to that brand. The strongest brands will be those to which consumers become so attached and passionate that they, in effect, become evangelists or missionaries and attempt to share their beliefs and spread the word about the brand. The power of the brand and its ultimate value to the firm reside with customers.

It is through learning about and experiencing a brand that customers end up thinking, feeling, and acting in a way that allows the firm to reap the benefits of brand equity. Although marketers must take responsibility for designing and implementing the most effective and efficient brand-building marketing programs possible, the success of those marketing efforts ultimately depends on how consumers respond and the actions they take. This response, in turn, depends on the knowledge that has been created in their minds and hearts for those brands. The Science of Branding 3-2 describes some criteria to determine whether a company is truly consumer-centric.

The brand resonance model reinforces the fact that there are no shortcuts in building a brand. A great brand is not built by accident but is the product of carefully accomplishing—either explicitly or implicitly—a series of logically linked steps with consumers. The more explicitly marketers recognize the steps and define them as concrete goals, the more likely they will give them the proper attention and fully realize them so they can provide the greatest contribution to brand building. The length of time to build a strong brand will therefore be directly proportional to the amount of time it takes to create sufficient awareness and understanding so that firmly held and felt beliefs and attitudes about the brand are formed that can serve as the foundation for brand equity.

The brand-building steps may not be equally difficult. Creating brand awareness is a step that an effectively designed marketing program often can accomplish in a relatively short period of time. Unfortunately, this step is the one that many brand marketers tend to skip in their mistaken haste to quickly establish an image for the brand. It is difficult for consumers to appreciate the advantages and uniqueness of a brand unless they have some sort of frame of reference for what the brand is supposed to do and with whom or what it is supposed to compete. Similarly, consumers cannot have highly positive responses without a reasonably complete understanding of the brand’s dimensions and characteristics.

Even if, due to circumstances in the marketplace, consumers actually start a repeated-purchase or behavioral loyalty relationship with a brand without much underlying feeling, judgment, or associations, these other brand-building blocks will have to come into place at some point to create true resonance. That is, although the start point may differ, the same steps in brand building eventually must occur to create a truly strong brand.

One important point reinforced by the model is that a strong brand has a duality—it appeals to both the head and the heart. Thus, although there may be two different ways to build loyalty and resonance—going up the left-hand and right-hand sides of the pyramid—strong brands often do both. Strong brands blend product performance and imagery to create a rich, varied, but complementary set of consumer responses to the brand.

By appealing to both rational and emotional concerns, a strong brand provides consumers with multiple access points while reducing competitive vulnerability. Rational concerns can satisfy utilitarian needs, whereas emotional concerns can satisfy psychological or emotional needs. Combining the two allows brands to create a formidable brand position. Consistent with this reasoning, a McKinsey study of 51 corporate brands found that having distinctive physical and emotional benefits drove greater shareholder value, especially when the two were linked.41

The level of detail in the brand resonance model highlights the number of possible ways to create meaning with consumers and the range of possible avenues to elicit consumer responses. Collectively, these various aspects of brand meaning and the resulting responses produce strong consumer bonds to the brand. The various associations making up the brand image may be reinforcing, helping strengthen or increase the favorability of other brand associations, or they may be unique, helping add distinctiveness or offset some potential deficiencies. Strong brands thus have both breadth (in terms of duality) and depth (in terms of richness).

At the same time, brands should not necessarily be expected to score highly on all the various dimensions and categories making up each core brand value. Building blocks can have hierarchies in their own right. For example, with respect to brand awareness, typically marketers should first establish category identification in some way before considering strategies to expand brand breadth via needs satisfied or benefits offered. With brand performance, they may wish to first link primary characteristics and related features before attempting to link additional, more peripheral associations.

Similarly, brand imagery often begins with a fairly concrete initial articulation of user and usage imagery that, over time, leads to broader, more abstract brand associations of personality, value, history, heritage, and experience. Brand judgments usually begin with positive quality and credibility perceptions that can lead to brand consideration and then perhaps ultimately to assessments of brand superiority. Brand feelings usually start with either experiential ones (warmth, fun, and excitement) or inward ones (security, social approval, and self-respect.) Finally, resonance again has a clear ordering, whereby behavioral loyalty is a starting point, but attitudinal attachment or a sense of community is almost always needed for active engagement to occur.

As Figure 3-1 shows, brand resonance is the pinnacle of the brand resonance model and provides important focus and priority for decision making about marketing. Marketers building brands should use brand resonance as a goal and a means to interpret their brand-related marketing activities. The question to ask is, To what extent is marketing activity affecting the key dimensions of brand resonance—consumer loyalty, attachment, community, or engagement with the brand? Is marketing activity creating brand performance and imagery associations and consumer judgments and feelings that will support these brand resonance dimensions?

It is virtually impossible, however, for consumers to experience an intense, active loyalty relationship with all the brands they purchase and consume. Thus, some brands will be more meaningful to consumers than others, because of the nature of their associated product or service, the characteristics of the consumer, and so on. Some brands have more resonance potential than others. When it is difficult to create a varied set of feelings and imagery associations, marketers might not be able to obtain the deeper aspects of brand resonance like active engagement. Nevertheless, by taking a broader view of brand loyalty, they may be able to gain a more holistic appreciation for their brand and how it connects to consumers. And by defining the proper role for the brand, they should be able to obtain higher levels of brand resonance.

Any marketing program investment that can contribute to brand value development, intentionally or not, falls into this first value stage. Chapters 4–7 outline many such marketing activities, like product research, development, and design; trade or intermediary support; marketing communications including advertising, promotion, sponsorship, direct and interactive marketing, personal selling, publicity, and public relations; and employee training. A big investment of course does not guarantee success. The ability of a marketing program investment to transfer or multiply farther down the chain depends on qualitative aspects of the marketing program and the program quality multiplier.

The ability of the marketing program to affect the customer mind-set will depend on its quality. Throughout the book , we review a number of different means to judge the quality of a marketing program. One handy way to remember some key considerations is through the acronym DRIVE, as follows:

1. Distinctiveness: How unique is the marketing program? How creative or differentiating is it?

2. Relevance: How meaningful is the marketing program to customers? Do consumers feel the brand is one they should seriously consider?

3. Integrated: How well integrated is the marketing program at one point in time and over time? Do all aspects combine to create the biggest impact with customers as possible? Does the marketing program relate effectively to past marketing programs and properly balance continuity and change, evolving the brand in the right direction?

4. Value: How much short-run and long-run value does the marketing program create? Will it profitably drive sales in the short run? Will it build brand equity in the long run?

5. Excellence: Is the individual marketing activity designed to satisfy the highest standards? Does it reflect state-of-the art thinking and corporate wisdom as success factors for that particular type of marketing activity?

Not surprisingly, a well-integrated marketing program, carefully designed and implemented to be highly relevant and unique, is likely to achieve a greater return on investment from marketing program expenditures. For example, despite being outspent by such beverage brand giants as Coca-Cola, Pepsi, and Budweiser, the California Milk Processor Board was able to reverse a decades-long decline in consumption of milk in California through the well-designed and executed “Got Milk?” campaign.

On the other hand, numerous marketers have found that expensive marketing programs do not necessarily produce sales unless they are well conceived. For example, through the years, brands such as Michelob, Minute Maid, 7UP, and others have seen their sales slide despite sizable marketing expenditures because of poorly targeted and delivered marketing campaigns.

In what ways have customers been changed as a result of the marketing program? How have those changes manifested themselves in the customer mind-set?

Remember, the customer mind-set includes everything that exists in the minds of customers with respect to a brand: thoughts, feelings, experiences, images, perceptions, beliefs, and attitudes. In its totality, the brand resonance model captures a wide range of aspects of the customer mind-set. To provide a concise summary, a shorter “5 As” list can highlight important measures of the customer mind-set as suggested by the resonance model:

1. Brand Awareness: The extent and ease with which customers recall and recognize the brand and can identify the products and services with which it is associated.

2. Brand Associations: The strength, favorability, and uniqueness of perceived attributes and benefits for the brand. Brand associations often represent key sources of brand value, because they are the means by which consumers feel brands satisfy their needs.

3. Brand Attitudes: Overall evaluations of the brand in terms of its quality and the satisfaction it generates.

4. Brand Attachment: The degree of loyalty the customer feels toward the brand. A strong form of attachment, adherence, is the consumer’s resistance to change and the ability of a brand to withstand bad news like a product or service failure. In the extreme, attachment can even become addiction.

5. Brand Activity: The extent to which customers use the brand, talk to others about the brand, seek out brand information, promotions, and events, and so on.

These five dimensions can be easily related to the brand resonance model (awareness relates to salience, associations relate to performance and imagery, attitudes relate to judgments and feelings, and attachment and activity relate to resonance). As in the resonance model, an obvious hierarchy exists in the dimensions of value: awareness supports associations, which drive attitudes that lead to attachment and activity. Brand value is created at this stage when customers have (1) deep, broad brand awareness; (2) appropriately strong, favorable, and unique points-of-parity and points-of-difference; (3) positive brand judgments and feelings; (4) intense brand attachment and loyalty; and (5) a high degree of brand activity.

Creating the right customer mind-set can be critical in terms of building brand equity and value. AMD and Cyrix found that achieving performance parity with Intel’s microprocessors did not return benefits in 1998, when original equipment manufacturers were reluctant to adopt the new chips because of their lack of a strong brand image with consumers. Moreover, success with consumers may not translate to success in the marketplace unless other conditions also prevail. The ability of this customer mind-set to create value at the next stage depends on external factors we call the marketplace conditions multiplier, as follows.

The extent to which value created in the minds of customers affects market performance depends on factors beyond the individual customer. Three such factors are:

1. Competitive superiority: How effective are the marketing investments of competing brands?

2. Channel and other intermediary support: How much brand reinforcement and selling effort is being put forth by various marketing partners?

3. Customer size and profile: How many and what types of customers are attracted to the brand? Are they profitable?

The value created in the minds of customers will translate to favorable market performance when competitors fail to provide a significant threat, when channel members and other intermediaries provide strong support, and when a sizable number of profitable customers are attracted to the brand.

The competitive context faced by a brand can have a profound effect on its fortunes. For example, Nike and McDonald’s have benefited in the past from the prolonged marketing woes of their main rivals, Reebok and Burger King, which both have suffered from numerous repositionings and management changes. On the other hand, MasterCard has had to contend for the past decade with two strong, well-marketed brands in Visa and American Express and consequently has faced an uphill battle gaining market share despite its well-received “Priceless” ad campaign, as described earlier in this chapter.

We saw in Chapter 2 that the customer mind-set affects how customers react in the marketplace in six main ways. The first two relate to price premiums and price elasticities. How much extra are customers willing to pay for a comparable product because of its brand? And how much does their demand increase or decrease when the price rises or falls? A third outcome is market share, which measures the success of the marketing program in driving brand sales. Taken together, the first three outcomes determine the direct revenue stream attributable to the brand over time. Brand value is created with higher market shares, greater price premiums, and more elastic responses to price decreases and inelastic responses to price increases.

The fourth outcome is brand expansion, the success of the brand in supporting line and category extensions and new-product launches into related categories. This dimension captures the brand’s ability to add enhancements to the revenue stream. The fifth outcome is cost structure or, more specifically, reduced marketing program expenditures thanks to the prevailing customer mind-set. When customers already have favorable opinions and knowledge about a brand, any aspect of the marketing program is likely to be more effective for the same expenditure level; alternatively, the same level of effectiveness can be achieved at a lower cost because ads are more memorable, sales calls more productive, and so on. When combined, these five outcomes lead to brand profitability, the sixth outcome.

The ability of the brand value created at this stage to reach the final stage in terms of stock market valuation again depends on external factors, this time according to the investor sentiment multiplier.

Financial analysts and investors consider a host of factors in arriving at their brand valuations and investment decisions. Among them are the following:

• Market dynamics: What are the dynamics of the financial markets as a whole (interest rates, investor sentiment, supply of capital)?

• Growth potential: What is the growth potential or prospects for the brand and the industry in which it operates? For example, how helpful are the facilitating factors and how inhibiting are the hindering external factors that make up the firm’s economic, social, physical, and legal environment?

• Risk profile: What is the risk profile for the brand? How vulnerable is the brand to those facilitating and inhibiting factors?

• Brand contribution: How important is the brand to the firm’s brand portfolio?

The value the brand creates in the marketplace is most likely fully reflected in shareholder value when the firm is operating in a healthy industry without serious environmental hindrances or barriers, and when the brand contributes a significant portion of the firm’s revenues and appears to have bright prospects.

The obvious examples of brands that benefited from a strong market multiplier—at least for a while—were the numerous dot-com brands at the turn of the century, such as Pets.com, eToys, Boo.com, and Webvan. The huge premium placed on their (actually negative) market performance, however, quickly disappeared—and in some cases so did the whole company!

On the other hand, many firms have lamented what they perceive as undervaluation by the market. For example, repositioned companies such as Corning have found it difficult to realize what they viewed as their true market value due to lingering investor perceptions from their past. Corning’s heritage was in dishes and cookware; its more recent emphasis is on telecommunications, flat panel displays, and the environmental, life sciences, and semiconductor industries.

Based on all available current and forecasted information about a brand, as well as many other considerations, the financial marketplace formulates opinions and assessments that have very direct financial implications for the brand value. Three particularly important indicators are the stock price, the price/earnings multiple, and overall market capitalization for the firm. Research has shown that not only can strong brands deliver greater returns to stockholders, they can do so with less risk.45