Page 307 - Foundations of Marketing

274 Part 4 | Product and Price Decisions

each branded product indirectly promotes all other similarly branded products. Branding also
fosters brand loyalty. To the extent that buyers become loyal to a specific brand, the company’s
market share for that product achieves a certain level of stability, allowing the firm to use its
resources more efficiently. Once a firm develops some degree of customer loyalty for a brand,
it can maintain a fairly consistent price rather than continually cutting the price to attract
customers.
There is a cultural dimension to branding. Most brand experiences are individual, and each
consumer confers his or her own social meaning onto brands. A brand’s appeal is largely at
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an emotional level based on its symbolic image and key associations. For some brands, such
as Harley-Davidson, Saab, and Apple, this can result in an almost cult-like following. These
brands often develop a community of loyal customers that communicate through get-togethers,
online forums, blogs, podcasts, and other means. These brands may even help consumers to
develop their identity and self-concept and serve as a form of self-expression. In fact, the
term cultural branding has been used to explain how a brand conveys a powerful myth that
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consumers find useful in cementing their identities. It is also important to recognize that
because a brand exists independently in the consumer’s mind, it is not controlled directly
by the marketer. Every aspect of a brand is subject to a consumer’s emotional involvement,
interpretation, and memory. By understanding how branding influences purchases, marketers
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can foster customer loyalty.

Brand Equity
A well-managed brand is an asset to an organization. The value of this asset is often referred
to as brand equity. Brand equity is the marketing and financial value associated with a brand’s
strength in a market. Besides the actual proprietary brand assets, such as patents and trade-
marks, four major elements underlie brand equity: brand name awareness, brand loyalty, per-
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ceived brand quality, and brand associations (see Figure 10.5 ).
Being aware of a brand leads to brand familiarity, which in turn results in a level of com-
fort with the brand. A familiar brand is more likely to be selected than an unfamiliar brand
brand equity The marketing
and financial value associated because the familiar brand often is viewed as more reliable and of more acceptable quality.
with a brand’s strength in a The familiar brand is likely to be in a customer’s consideration set, whereas the unfamiliar
market brand is not.
brand loyalty A customer’s Brand loyalty is a customer’s favorable attitude toward a specific brand. If brand loyalty
favorable attitude toward a is strong enough, customers may purchase this brand consistently when they need a product
specific brand in that product category. Customer satisfaction with a brand is the most common reason for

Figure 10.5 Major Elements of Brand Equity

Brand-name Perceived
awareness brand quality

BRAND
EQUITY

Brand Brand
associations loyalty

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