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MKTG Management Chapter 9 (FINAL)

B
1) The first step in the strategic brand management process is ________.
A) measuring consumer brand loyalty
B) identifying and establishing brand positioning
C) planning and implementing brand marketing
D) measuring and interpreting brand performance
E) growing and sustaining brand value
D
2) The American Marketing Association defines a ________ as “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.”
A) copyright
B) trademark
C) slogan
D) brand
E) logo
C
3) Branding is ________.
A) all about creating unanimity between products
B) the process of performing market research and selling products or services to customers
C) endowing products and services with the power of a brand
D) the process of comparing competing brands available in the market
E) use of online interactive media to promote products and brands
B
4) Brand ________ is the added value endowed to products and services.
A) loyalty
B) equity
C) preference
D) identity
E) licensing
B
5) ________ is the differential effect that brand knowledge has on consumer response to the marketing of that brand.
A) Mission-driven brand equity
B) Customer-based brand equity
C) Product-driven brand equity
D) Service-driven brand equity
E) Function-based brand equity
B
6) Adam wants to buy a washing machine and is looking for something that is not too expensive. When he goes to make the purchase, he finds there are two options that meet his requirements. One is an IFB Bosch product, while the other is a newly imported South Korean brand. Adam is not very familiar with the latter and does not hesitate in choosing Bosch. This example implies that ________.
A) the imported brand will not survive the competition from Bosch
B) Bosch has a positive customer brand equity
C) the South Korean company has a low advertising budget
D) the imported brand is unreliable
E) the Bosch washing machine has better features than the imported brand
A
7) When a consumer expresses thoughts, feelings, images, experiences, and beliefs associated with the brand, the consumer is expressing ________.
A) brand knowledge
B) ethnocentric bias
C) self-serving bias
D) cognitive dissonance
E) brand identity
A
8) The challenge for marketers in building a strong brand is ________.
A) ensuring that customers have the right type of experiences with their products and marketing programs to create the desired brand knowledge
B) pricing the product at a point that maximizes sales volume
C) minimizing the number of people to whom the product is targeted in order to provide consumers with a personalized experience
D) minimizing the impact of customer brand equity
E) avoiding the usage of an established brand to introduce a new product in the market
D
9) Which of the following is a marketing advantage of strong brands?
A) no vulnerability to marketing crises
B) more elastic consumer response to price increases
C) guaranteed profits
D) additional brand extension opportunities
E) more inelastic consumer response to price decreases
A
10) When a marketer expresses his or her vision of what the brand must be and do for consumers, they are expressing what is called ________.
A) a brand promise
B) a brand personality
C) a brand identity
D) a brand position
E) a brand revitalization
C
11) Identify the four pillars of brand equity, according to brand asset valuator model.
A) relevance, performance, bonding, and advantage
B) presence, performance, advantage, and bonding
C) energized differentiation, relevance, esteem, and knowledge
D) brand salience, brand feelings, brand imagery, and brand performance
E) energized differentiation, esteem, brand feelings, and brand salience
A
12) Christian Louboutin is a footwear designer who launched his line of high-end women’s shoes in France in 1991. Since 1992, his designs have incorporated the shiny, red-lacquered soles that have become his signature. These red-lacquered soles and high stilettos of Louboutin distinguish him from other designer shoe brands. In accordance with the brand asset valuator model, which of the following components of brand equity has Louboutin fulfilled in the given scenario?
A) energized differentiation
B) relevance
C) esteem
D) knowledge
E) advantage
C
13) Christian Louboutin is a footwear designer who launched his line of high-end women’s shoes in France in 1991. The brand caters to an elite clientele whose satisfaction with the brand has always been evident. Apart from being high-end, Louboutin footwear signifies power in elite social circles. Celebrities are often seen sporting “Loubs” at special occasions, such as movie premieres. This has resulted in people associating Louboutin footwear with class and power. In accordance with the brand asset valuator model, which of the following components of brand equity has Louboutin fulfilled in the given scenario?
A) knowledge
B) energized differentiation
C) esteem
D) advantage
E) presence
D
14) According to the brand asset valuator model, which of the components of brand equity measures how aware and familiar consumers are with the brand?
A) esteem
B) energized differentiation
C) relevance
D) knowledge
E) presence
B
15) According to the brand asset valuator model, which of the components of brand equity measures the breadth of a brand’s appeal?
A) differentiation
B) relevance
C) esteem
D) knowledge
E) value
E
16) According to brand asset valuator model, energized differentiation and relevance, the two pillars of brand equity combine to determine what is called brand ________.
A) position
B) image
C) depth
D) knowledge
E) strength
A
17) According to brand asset valuator model, esteem and knowledge, the two pillars of brand equity together create ________, a “report card” on past performance and a current indicator of current value.
A) brand stature
B) brand parity
C) brand strength
D) brand personality
E) brand architecture
B
18) According to the brand asset valuator model, strong new brands show ________.
A) higher levels of esteem and knowledge than relevance, whereas both differentiation and energy are lower still
B) higher levels of differentiation and energy than relevance, whereas both esteem and knowledge are lower still
C) high knowledge—evidence of past performance—a lower level of esteem, and even lower relevance, energy, and differentiation
D) high levels on energy, differentiation, relevance, knowledge, and esteem
E) low levels on energy, differentiation, relevance, knowledge, and esteem
A
19) According to brand asset valuator model, leadership brands show ________.
A) high levels of energy, differentiation, relevance, knowledge, and esteem
B) higher levels of esteem and knowledge than relevance, whereas both differentiation and energy are
lower still
C) higher levels of differentiation and energy than relevance, whereas both esteem and knowledge are
lower still
D) low levels on energy, differentiation, relevance, knowledge, and esteem
E) high knowledge—evidence of past performance—a lower level of esteem, and even lower relevance, energy, and differentiation
E
20) According to brand asset valuator model, declining brands show ________.
A) higher levels of esteem and knowledge than relevance, whereas both differentiation and energy are
lower still
B) high relevance—appropriateness of brand’s appeal—a lower level of energy and differentiation, and even lower knowledge
C) high levels on energy, differentiation, relevance, knowledge, and esteem
D) higher levels of differentiation and energy than relevance, whereas both esteem and knowledge are
lower still
E) high knowledge—evidence of past performance—a lower level of esteem, and even lower
relevance, energy, and differentiation
D
21) According to Young and Rubicam’s brand asset valuator, a brand’s ________ measures how well the brand is regarded and respected.
A) differentiation
B) energy
C) relevance
D) esteem
E) knowledge
A
22) Aromas Inc., introduced a new line of shower gels. To analyze consumer reaction, the company interviewed people who bought them. When Sarah was asked why she had chosen the new shower gel, she said she bought it because a friend recommended it. Sarah is at which level of the brand dynamics pyramid?
A) presence
B) bonding
C) relevance
D) performance
E) advantage
C
23) If a consumer, trying to decide between alternatives, believes that a particular brand delivers acceptable product performance and can be short listed, she is in the ________ level of the brand dynamics pyramid.
A) presence
B) relevance
C) performance
D) advantage
E) bonding
B
24) Which of the following levels of the brand dynamics pyramid pertains to consumer’s needs?
A) advantage
B) relevance
C) bonding
D) performance
E) presence
E
25) A consumer who expresses rational and emotional attachments to the brand to the exclusion of most
other brands has reached the ________ level in the brand dynamics pyramid.
A) advantage
B) relevance
C) presence
D) performance
E) bonding
B
26) According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address the question “Do I know about this brand?”
A) relevance
B) presence
C) performance
D) advantage
E) bonding
C
27) According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address or answer the question “Does this brand offer something better than the others?”
A) performance
B) presence
C) advantage
D) bonding
E) relevance
A
28) According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address or answer the question “Can this brand deliver?”
A) performance
B) bonding
C) advantage
D) relevance
E) presence
C
29) According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address or answer the question “Does this brand offer me something?”
A) advantage
B) presence
C) relevance
D) bonding
E) performance
A
30) According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps convey the message ” Nothing else beats this brand”?
A) bonding
B) relevance
C) advantage
D) performance
E) presence
B
31) Brand salience ________.
A) is customers’ emotional responses and reactions with respect to the brand
B) is how often and how easily customers think of the brand under various purchase or consumption situations
C) is how well the product or service meets customers’ functional needs
D) describes the extrinsic properties of the product or service, including the ways in which the brand attempts to meet customers’ psychological or social needs
E) describes the relationship customers have with the brand and the extent to which they feel they’re “in sync” with it
D
32) With respect to the “six brand building blocks,” ________ signifies how well the product or service meets customers’ functional needs.
A) brand judgment
B) brand imagery
C) brand salience
D) brand performance
E) brand resonance
A
33) With respect to the “six brand building blocks,” ________ describes the extrinsic properties of the product or service, including the ways in which the brand attempts to meet customers’ psychological or social needs.
A) brand imagery
B) brand judgment
C) brand resonance
D) brand salience
E) brand performance
D
34) With respect to the “six brand building blocks,” ________ focuses on customers’ own personal opinions and evaluations.
A) brand salience
B) brand performance
C) brand imagery
D) brand judgment
E) brand resonance
E
35) With respect to the brand building pyramid, at which of the following “building block levels” would we expect the consumer to develop an intense, active loyalty?
A) salience
B) imagery
C) feelings
D) judgments
E) resonance
E
36) With respect to the brand building pyramid, at which of the following “building block levels” would we expect the consumer to develop positive and accessible reactions?
A) resonance
B) salience
C) imagery
D) performance
E) feelings
C
37) With respect to the “six brand building blocks,” ________ describes the relationship customers have with the brand and the extent to which they feel they’re “in sync” with it.
A) brand imagery
B) brand judgment
C) brand resonance
D) brand salience
E) brand performance
D
38) With respect to the “six brand building blocks,” ________ are customers’ emotional responses and reactions with respect to the brand.
A) brand imagery statements
B) brand judgments
C) brand performances
D) brand feelings
E) brand resonances
A
39) Which of the following “building block levels” corresponds to the branding objectives of points-of-parity and difference?
A) performance and imagery
B) judgment and feelings
C) resonance and salience
D) imagery and judgment
E) salience and feelings
D
40) With respect to the brand building pyramid, the branding objective of developing deep, broad brand awareness corresponds to which of the following “building block levels”?
A) resonance
B) imagery
C) performance
D) salience
E) judgment
C
41) From a marketing management perspective, there are three main sets of brand equity drivers. Which of these drivers was most applicable when McDonald’s decided to use the “golden arches” and Ronald McDonald as symbols of their brand?
A) the product and all accompanying marketing activities and supporting marketing programs
B) the service and all accompanying marketing activities and programs
C) the initial choices for the brand elements or identities making up the brand
D) associations indirectly transferred to the brand by linking it to some other entity
E) the profitability associated with brand development
C
42) Red Bull enlisted college students as “Red Bull student brand managers” to distribute samples, research drinking trends, design on-campus product promotion activities, and write stories for student newspapers. From a marketing management perspective, which of the following brand equity drivers is most applicable in the given scenario?
A) the profitability associated with brand development
B) associations indirectly transferred to the brand by linking it to a person
C) the product and all accompanying marketing activities and supporting marketing programs
D) the initial choices for the brand elements or identities making up the brand
E) associations indirectly transferred to the brand by linking it to a place
A
43) The brand name of New Zealand vodka 42BELOW refers to both a latitude that runs through New Zealand and the percentage of its alcohol content. From a marketing management perspective, which of
the brand equity drivers is most applicable in the given scenario?
A) the associations indirectly transferred to the brand by linking it to a place or thing
B) the product and all accompanying marketing activities and supporting marketing programs
C) the initial choices for the brand elements or identities making up the brand
D) the profitability associated with brand development
E) the service and all accompanying marketing activities and programs
A
44) ________ are devices that can be trademarked and serve to identify and differentiate the brand.
A) Brand elements
B) Brand value propositions
C) Brand perceptions
D) Brand images
E) Brand extensions
D
45) If a brand element can be used to introduce new products in the same or different categories, the brand element is said to be ________.
A) memorable
B) meaningful
C) likeable
D) transferable
E) adaptable
E
46) If consumers can easily recall and recognize a brand element, the brand element is said to be ________.
A) meaningful
B) protectable
C) adaptable
D) transferable
E) memorable
A
47) Which of the following is a defensive criterion for choosing brand elements?
A) adaptable
B) memorable
C) meaningful
D) likeable
E) significance
C
48) With respect to powerful brand elements, ________ is an extremely efficient means to build brand equity. This element functions as a useful “hook” or “handle” to help consumers grasp what the brand is and what makes it special.
A) the tangibility of a product
B) a product’s shape
C) a slogan
D) a patent
E) a copyright
E
49) A ________ can be defined as any information-bearing experience a customer or prospect has with the brand, the product category, or the market that relates to the marketer’s product or service.
A) brand value
B) brand personality
C) brand trait
D) brand character
E) brand contact
E
50) The traditional “marketing-mix” concept and the notion of the “four Ps” may not adequately describe modern marketing programs. ________ is about mixing and matching marketing activities to maximize their individual and collective effects.
A) Personalized marketing
B) Mass customization
C) Globalized marketing
D) Relationship marketing
E) Integrated marketing
C
51) Brand equity can be built by ________, which create(s) equity by linking the brand to other information in memory that conveys meaning to customers.
A) internal marketing
B) brand transferability
C) secondary associations
D) customer alignment
E) brand auditing
E
52) Mark feels that Shell delivers on its promises to supply the best gasoline possible to the public. His experiences with Shell have always been good resulting in positive brand contact. Mark is most likely experiencing ________.
A) brand alliance
B) brand essence
C) brand harmonization
D) brand parity
E) brand bonding
A
53) ________ consists of activities and processes that help inform and inspire employees about brands.
A) Internal branding
B) Personal branding
C) Individual branding
D) External branding
E) Co-branding
D
54) AT&T’s business campaign not only helped to change public perceptions of the company, it also signaled to employees that AT&T was determined to be a leader in telecommunication services. Which principle of internal branding does this example portray?
A) choosing the right moment to capture employees’ attention and imagination
B) furnishing energizing and informative internal communication
C) bringing the brand alive for employees
D) linking internal and external marketing
E) understanding how brand communities work
A
55) A ________ is a specialized group of consumers and employees whose identification and activities focus around the brand.
A) brand community
B) brand channel
C) brand association
D) brand personality
E) brand cluster
C
56) Which of the following value creation processes means sharing the brand “good news” and inspiring others to use the brand?
A) staking
B) badging
C) evangelizing
D) justifying
E) milestoning
A
57) Which of the following value creation processes means detailing the brand relationship journey in a
narrative way, often anchored by and peppered with milestones?
A) documenting
B) milestoning
C) badging
D) evangelizing
E) staking
D
58) Which of the following value creation processes means translating milestones into symbols and artifacts?
A) staking
B) evangelizing
C) milestoning
D) badging
E) documenting
A
59) A structured approach to assessing the sources and outcomes of brand equity and the manner in which marketing activities create the financial worth of the brand is called ________.
A) the brand value chain
B) the brand portfolio
C) the brand life cycle
D) brand partitioning
E) brand positioning
B
60) Competitive superiority and channel support are factors that influence the ________ of the brand value chain.
A) program multiplier
B) customer multiplier
C) brand multiplier
D) profit multiplier
E) market multiplier
A
61) Clarity, relevance, distinctiveness, and consistency are factors that influence the ________ of the brand
value chain.
A) program multiplier
B) brand multiplier
C) market multiplier
D) customer multiplier
E) profit multiplier
E
62) ________ are a means of understanding where, how much, and in what ways brand value is being created to facilitate day-to-day decision making.
A) Internal marketing campaigns
B) Brand portfolio audits
C) Brand value chains
D) Sales cycles
E) Brand-tracking studies
D
63) ________ is the job of estimating the total financial worth of the brand.
A) Brand tracking
B) Brand auditing
C) Brand equity
D) Brand valuation
E) Brand harmonization
A
64) Apple’s ipod shuffle is an example of ________.
A) a sub-brand
B) a parent brand
C) family brand
D) a brand mix
E) an umbrella brand
C
65) When a firm uses an established brand to introduce a new product, it is called a ________.
A) brand harmonization
B) brand valuation
C) brand extension
D) brand positioning
E) brand parity
D
66) A parent brand that is associated with multiple products through brand extensions is also called a(n)________.
A) category brand
B) subbrand
C) extension brand
D) family brand
E) line brand
A
67) The introduction of diet coke by the Coca Cola Company is an example of ________.
A) line extension
B) brand harmonization
C) category extension
D) brand dilution
E) co-branding
A
68) A ________ consists of all productsoriginal as well as line and category extensionssold under a particular brand.
A) brand line
B) cobrand
C) generic brand
D) licensed product
E) subbrand
C
69) A major advantage of a ________ strategy is that the company does not tie its reputation to the product.
A) blanket family name
B) licensing
C) separate family brand name
D) category extension
E) brand revitalization
D
70) Starbucks introduced ice creams in the same flavors as the frappucinos it sold in its coffee shops. This is an example of ________.
A) brand dilution
B) cobranding
C) brand variants
D) category extension
E) brand harmonization
E
71) A ________ is a set of all brand lines that a particular seller makes.
A) brand platform
B) brand image
C) cobrand
D) brand extension
E) brand mix
C
72) A ________ is the set of all brands and brand lines a particular firm offers for sale to buyers in a particular category.
A) brand architecture
B) brand position
C) brand portfolio
D) brand extension
E) brand image
A
73) The hallmark of an optimal brand portfolio is ________.
A) the ability of each brand to maximize equity in combination with all the other brands in it
B) the ability of each brand to maximize its individual equity in isolation
C) maximum brand overlap
D) the eventual reduction of brand differentiation to create a unified brand appearance
E) maximum internal competition within the firm
A
74) ________ brands are positioned with respect to competitors’ brands so that more important (and more profitable) flagship brands can retain their desired positioning.
A) Flanker
B) Attacker
C) Defender
D) Cash cow
E) Simulation
B
75) Two advantages of ________ are that they can facilitate new-product acceptance and provide positive feedback to the parent brand and company.
A) product licensing
B) brand extensions
C) brand architecture
D) brand audits
E) brand dilutions
E
76) According to Ries and Trout, Cadbury suffered from ________ when the company allowed its brand to become diluted by putting their name on such variants as mashed potatoes, powdered milk, and soups, apart from chocolates and candies.
A) liquidity trap
B) cognitive dissonance
C) branding fallout
D) cannibalization
E) line-extension trap
B
77) Even if sales of a brand extension are high and meet targets, the revenue may be coming from consumers switching to the extension from existing parent-brand offeringsin effect ________ the parent brand.
A) diluting
B) cannibalizing
C) reinforcing
D) eroding
E) revamping
D
78) In its focus on bottom-line financial value, the ________ approach often overlooks the “option value” of brands and their potential to affect future revenues and costs.
A) brand equity
B) brand value chain
C) customer tracking
D) customer equity
E) brand extension
TRUE
79) Consumers may evaluate identical products differently depending on how they are branded.
FALSE
80) Physical goods, services, and stores can be branded, but ideas and people cannot.
TRUE
81) One of the advantages of having a strong brand is the ability to have a more elastic consumer response to price decreases of the brand.
FALSE
82) Brand equity arises from unanimity in consumer response.
FALSE
83) The quantity, rather than quality, of a marketer’s investment in brand building is the critical factor in building brand equity.
TRUE
84) According to brand asset valuator (BAV) model, knowledge is one of the key components of brand equity.
FALSE
85) According to the BRANDZ model, “Bonded” consumers at the lower levels of the pyramid build stronger relationships with and spend more on the brand than those at the top.
TRUE
86) Under the BRANDZ model of brand strength, customers who are bonded to the brand believe “nothing else beats it.”
FALSE
87) Brand salience describes the extrinsic properties of the product or service, including the ways in which the brand attempts to meet customers’ psychological or social needs.
FALSE
88) Brand imagery is a consumer’s emotional response and reaction with respect to the brand.
TRUE
89) One of the selection criteria for creating a successful brand element is that it should be protectable.
FALSE
90) If a brand element has the characteristic of being memorable, the brand is credible and suggestive of the type of person who might use the brand.
FALSE
91) Brands are built only by advertising.
TRUE
92) To achieve integrated marketing, marketers need a variety of different marketing activities that consistently reinforce the brand promise.
TRUE
93) Brand equity can be built by linking the brand to sources, such as channels of distribution as well as to other brands.
TRUE
94) The brand promise will not be delivered unless everyone in the company lives the brand.
FALSE
95) Modifying a brand to suit group-level or individual needs is called staking.
TRUE
96) A brand community can be a constant source of inspiration and feedback for product improvements or innovations.
FALSE
97) The indirect approach to assessing brand equity assesses the actual impact of brand knowledge on consumer response to different aspects of marketing.
TRUE
98) Spending on product research, development, and design constitutes investment in the brand value development process.
TRUE
99) The brand audit can be used to set strategic direction for the brand.
FALSE
100) Brand equity is essentially the same as brand valuation.
TRUE
101) When change is necessary, marketers should vigorously preserve and defend sources of brand equity.
FALSE
102) An important part of reinforcing brands is providing uniform and unchanging marketing support.
TRUE
103) When a parent brand covers a new product within a product category it currently serves, it is called a line extension.
TRUE
104) A firm’s branding strategy is also called the brand architecture.
FALSE
105) When Honda expanded its brand into such areas as automobiles, snowblowers, and marine engines, it was pursuing a strategy called line extension.
TRUE
106) Increasing shelf presence and retailer dependence in the store is one of the reasons for introducing multiple brands in a category.
FALSE
107) Flankers are brands that may be kept around despite dwindling sales because they manage to maintain their profitability with virtually no marketing support.
FALSE
108) The role of a relatively high-priced brand in the portfolio is often to attract customers to the brand franchise or to “build traffic”.
TRUE
109) Brand extensions can reduce the costs of introductory launch campaigns and make it easier to convince retailers to stock and promote a new product.
FALSE
110) Brand differentiation occurs when consumers no longer associate a brand with a specific product or highly similar products and start thinking less of the brand.
FALSE
111) Intrabrand shifts in a company’s sales are always undesirable.
TRUE
112) Marketers must judge each potential brand extension by how effectively it leverages existing brand equity from the parent brand, as well as how effectively, in turn, it contributes to the parent brand’s equity.
TRUE
113) Research indicates that high-quality brands stretch farther than average-quality brands, although both types of brands have boundaries.
FALSE
114) A brand that is seen as prototypical of a product category is easy to extend outside the category.
TRUE
115) A successful extension cannot only contribute to the parent brand image but also enable a brand to be extended even farther.
FALSE
116) The most effective advertising strategy for an extension emphasizes the parent brand.
TRUE
117) Customer lifetime value is affected by revenue and by the costs of customer acquisition, retention, and cross-selling.
TRUE
118) Both brand equity and customer equity emphasize the importance of customer loyalty and the notion that we create value by having as many customers as possible pay as high a price as possible.
Answer: Brands perform a number of valuable functions for firms. First, they simplify product handling or
tracing. Brands help to organize inventory and accounting records. A brand also offers the firm legal protection for unique features or aspects of the product. The brand name can be protected through registered trademarks; manufacturing processes can be protected through patents; and packaging can be protected through copyrights and proprietary designs. These intellectual property rights ensure that the firm can safely invest in the brand and reap the benefits of a valuable asset.
A credible brand signals a certain level of quality so that satisfied buyers can easily choose the product again. Brand loyalty provides predictability and security of demand for the firm, and it creates barriers to entry that make it difficult for other firms to enter the market. Loyalty also can translate into customer willingness to pay a higher price.
119) What valuable functions can brands perform for a firm?
Answer: The three key ingredients of customer-based brand equity are as follows:
1) Brand equity arises from differences in consumer response. If no differences occur, the brand-
name product is essentially a commodity, and competition will probably be based on price.
2) Differences in response are a result of consumers’ brand knowledge, all the thoughts, feelings, images, experiences, and beliefs associated with the brand. Brands must create strong, favorable, and unique brand associations with customers, as have Toyota (reliability), Hallmark (caring), and Amazon.com (convenience).
3) Brand equity is reflected in perceptions, preferences, and behavior related to all aspects of the
marketing of a brand. Stronger brands lead to greater revenue.
120) Describe the three ingredients of customer-based brand equity.
Answer: The BAV model is based on research of almost 800,000 consumers in 51 countries. BAV provides comparative measures of the brand equity of thousands of brands across hundreds of different categories. There are four key components—or pillars—of brand equity. These pillars are: (1) energized differentiation—measures the degree to which a brand is seen as different from others, and its perceived momentum and leadership; (2) relevance—measures the appropriateness and breadth of a brand’s appeal; (3) esteem—measures perceptions of quality and loyalty, or how well the brand is regarded and respected; and (4) knowledge—measures how aware and familiar consumers are with the brand.
121) Advertising agency Young and Rubicam (Y&R) developed a model of brand equity called Brand Asset Valuator (BAV). What is the intent of the BAV model? List and briefly characterize the four key components (pillars) of brand equity.
Answer: The six components of the brand resonance pyramid include: (1) brand salience—relates to how often and easily the brand is evoked under various purchase or consumption situations; (2) brand performance—relates to how the product or service meets customers’ functional needs; (3) brand imagery—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; (4) brand judgments—focus on consumers’ own personal opinions and evaluations; (5) brand feelings—customers’ emotional responses and reactions with respect to the brand; and (6) brand resonance—refers to the nature of the relationship that customers have with the brand and the extent to which customers feel that they are “in sync” with the brand.
122) The creation of significant brand equity involves reaching the top or pinnacle of the brand pyramid. What are the six components of the brand resonance pyramid?
Answer: The brand value creation process begins when the firm invests in a marketing program targeting actual or potential customers. Next, customers’ mindsets are assumed to change as a result of the marketing program. This change affects the way the brand performs in the marketplace through the collective impact of individual customers deciding how much to purchase and when, how much they’ll pay, and so on. Finally, the investment community considers market performance and other factors such as replacement cost and purchase price in acquisitions to arrive at an assessment of shareholder value in general and the value of a brand in particular.
123) Identify and describe the four value stages of the brand value chain.
Answer: To understand how the sources and outcomes of brand equity change, if at all, over time, marketers conduct brand tracking studies. These studies collect quantitative data from consumers over time to provide consistent, baseline information about how brands and marketing programs are performing. Tracking studies help us understand where, how much, and in what ways brand value is being created, to facilitate day-to-day decision making.
124) Describe the function of brand tracking studies.
Answer: To better understand the sources of brand equity and how they affect outcomes of interest, marketers often need to conduct brand audits. A brand audit is a consumer-focused exercise that involves a series of procedures to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity. The brand audit can be used to set strategic direction for the brand. As the result of this strategic analysis, the marketer can develop a marketing program to maximize long-term brand equity. Marketers should conduct a brand audit whenever they consider important shifts in strategic direction.
125) Describe the meaning and function of a brand audit.
Answer: Many firms, such as Heinz and GE, use their corporate brand as an umbrella brand across their entire range of products. A corporate umbrella brand name has a number of advantages. Development cost is less because there is no need for “name” research or heavy advertising expenditures to create brand-name recognition. Furthermore, sales of the new product are likely to be strong if the manufacturer’s name is good. Corporate-image associations of innovativeness, expertise, and trustworthiness have been shown to directly influence consumer evaluations. Finally, a corporate branding strategy can lead to greater intangible value for the firm.
126) As a branding manager, you have recommended to your board of directors a corporate policy of umbrella branding. What are the advantages that your company might gain from this?
Answer: The four roles are: (1) flankers—or fighting brands. These are positioned with respect to competitors’ brands so that more important (and more profitable) flagship brands can retain their desired positioning; (2) cash cows—some brands may be kept around despite dwindling sales because they still manage to hold on to a sufficient number of customers and maintain their profitability with virtually no marketing support. These “cash cow” brands can be effectively “milked” by capitalizing on their reservoir of existing brand equity; (3) low-end entry-level—the role of the relatively low-priced brand in the portfolio often may be to attract customers to the brand franchise. Retailers like to feature these “traffic builders” because they are able to “trade up” customers to a higher-priced brand; and (4) high-end prestige—the role of a high-priced brand in the brand family often is to add prestige and credibility to the entire portfolio.
127) There are a number of specific roles brands can play as part of a brand portfolio. List and briefly describe the four roles.
Answer: Consumers make inferences and form expectations about the composition and performance of a new product based on what they already know about the parent brand and the extent to which they feel this information is relevant to the new product. By setting up positive expectations, extensions reduce risk and may make it easier to convince retailers to stock and promote a brand extension because of increased customer demand. From a marketing communications perspective, an introductory campaign for an extension doesn’t need to create awareness of both the brand and the new product, but instead can concentrate on the new product itself.
128) In what ways can brand extensions improve the odds of new-product success?
Answer: The steps would be: (1) identifying and establishing brand positioning; (2) planning and implementing brand marketing; (3) measuring and interpreting brand performance; and (4) growing and sustaining brand value.
129) Assume you are a marketing manager and want to adopt strategic brand management. List the four main steps that you would most likely go through to accomplish this task.
Answer: A brand, according to the AMA, is “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.”
130) How does the American Marketing Association (AMA) define the term brand?
Answer: Brand equity is the added value 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 prices, market share, and profitability that the brand commands for the firm.
131) Define brand equity.
Answer: A brand is said to have positive customer-based brand equity when consumers react more favorably to a product and the way it is marketed when the brand is identified, than when it is not identified.
132) What is positive customer-based brand equity?
Answer: Brand knowledge consists of all the thoughts, feelings, images, experiences, beliefs, and so on that become associated with the brand. In particular, brands must create strong, favorable, unique brand associations with customers.
133) Explain the concept of brand knowledge.
Answer: Brand knowledge created by marketing investments dictates appropriate future directions for the brand. Consumers will decide, based on what they think and feel about the brand, where they believe the brand should go and grant permission to any marketing action or program. Many new products can fail because consumers find them inappropriate extensions for the brand.
34) How does consumer knowledge play a role in the success of new products associated with existing brands?
Answer: Energized differentiation and relevance combine to produce brand strength. Esteem and knowledge together create brand stature.
135) Brand equity has four components—energized differentiation, relevance, esteem, and knowledge. How are these components combined to produce brand strength and brand stature?
Answer: The steps are in ascending order: (1) presence, (2) relevance, (3) performance, (4) advantage, and (5) bonding.
136) According to the BRANDZ model of brand strength, brand building involves a series of five sequential steps. What are those five sequential steps?
Answer: The six criteria are: (1) memorable, (2) meaningful, (3) likable, (4) transferable, (5) adaptable, and (6) protectable.
137) List the six criteria used in creating brand elements.
Answer: As a brand manager you would need to consider the questions like, “How legally protectable is the brand element?” “How competitively protectable is the brand element?” and “Can it be easily copied?” It is important that names that become synonymous with product categories—such as Kleenex, Kitty Litter, Jell-O, Scotch Tape, Xerox, and Fiberglass—retain their trademark rights and not become generic.
138) As a brand manager you would like to have your brand (brand name) be protectable. Explain what you mean by “protectable” and give an illustration.
Answer: Three important principles for internal branding are: (1) choosing the right moment; (2) linking internal and external marketing; and (3) bringing the brand alive for employees.
139) Identify the three important principles for internal branding.
Answer: The two approaches are: (1) an indirect approach that assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures; and (2) a direct approach that assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing.
140) Given that the power of a brand resides in the minds of consumers and how it changes their response to marketing, there are two basic approaches to measuring brand equity. Briefly, describe each of these approaches.
Answer: Brand equity is the added value endowed to products and services. Brand valuation is the job of estimating the total financial value of the brand.
141) Distinguish between brand equity and brand valuation.
Answer: Marketers can reinforce brand equity by consistently conveying the brand’s meaning in terms of
1) what products it represents, what core benefits it supplies, and what needs it satisfies; and
2) how the brand makes products superior, and which strong, favorable, and unique brand associations should exist in consumers’ minds.
142) How can marketers reinforce brand equity?
Answer: The firm can: (1) develop new brand elements for the new product, (2) apply some of its existing brand elements, or (3) use a combination of new and existing brand elements.
143) The decision as to how to brand new products is especially critical. When a firm introduces a new product, it has three main choices. What are those choices?
Answer: Nichepro Technologies are advocating brand extension strategy. Brand extensions fall into two categories: 1) line extension and 2) category extension. Marketers use the parent brand to enter a different product category, in category extension. Nichepro is adopting the same strategy by using their parent brand to enter the healthcare products category.
144) Nichepro Technologies, who were mainly into producing personal computers and laptops, have now decided to produce Nichepro health care products. Explain the branding strategy advocated by the company.
Answer: Brand variants are specific brand lines supplied to specific retailers or distribution channels. They result from the pressure retailers put on manufacturers to provide distinctive offerings.
145) Define brand variants.
Answer: Kellogg’s employs a sub-brand or hybrid branding strategy by combining the corporate brand with individual product brands as with Kellogg’s rice krispies, Kellogg’s raisin bran, and Kellogg’s corn flakes.
146) Kellogg’s uses its corporate brand name with its individual product brands as with Kellogg’s rice krispies, Kellogg’s raisin bran, and Kellogg’s corn flakes. Which branding strategy is being used by the company?
Answer: A licensed product is one whose brand name has been licensed to other manufacturers that actually make the product. Corporations have seized on licensing to push their company names and images across a wide range of products-from bedding to shoes-making licensing a multibillion dollar business.
147) What is a licensed product? Why have corporations seized on licensing?
Answer: When there is a threat of losing consumers to a competing brand, companies sometimes opt for preemptive cannibalization. This causes consumers to switch between the same brand’s products, preventing loss of customers. Even though Tide’s various line extensions may cannibalize sales of its other products, if the extensions had not been introduced, then customers would have defected to another brand offering the same type of extension. In this way, Tide has maintained its market share through preemptive cannibalization.
148) Tide laundry detergent maintains the same market share it had 50 years ago because of the sales contributions from its various line extensions. It can be said that Tide employs a preemptive cannibalization strategy in generating line extensions. What does this mean?

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