Marketing Management – 12th Edition – Kotler/Keller
Chapter 9: Creating Brand Equity
GENERAL CONCEPT QUESTIONS
Multiple Choice
1. At the heart of a successful brand is ________, backed by creatively designed and executed marketing.
a. price
b. promotion
c. a great product or service
d. a great slogan
e. a brand concept
Answer: c Page: 273 Level of difficulty: Easy
2. The strategic branch management process involves four main steps. Which of the following would NOT be among those steps?
a. Measuring consumer brand knowledge.
b. Identifying and establishing brand positioning.
c. Planning and implementing brand marketing.
d. Measuring and interpreting brand performance.
e. Growing and sustaining brand value.
Answer: a Page: 274 Level of difficulty: Hard
3. 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. holistic product concept
b. product concept
c. service concept
d. brand
e. brand image
Answer: d Page: 274 Level of difficulty: Medium
4. The earliest signs of branding in Europe were medieval ________ requirement that craftspeople put trademarks on their products to protect themselves and consumers against inferior quality.
a. kings’
b. churches’
c. consumers’
d. governments’
e. guilds’
Answer: e Page: 274 Level of difficulty: Medium
5. Consumers learn about brands through ________ and product marketing programs.
a. the mass media
b. past experiences with the product
c. the sales force
d. shopping bots
e. independent information sources
Answer: b Page: 274 Level of difficulty: Medium
6. The world’s strongest brands share common attributes. Which of the following would NOT be among those common attributes?
a. The brand that spends the most is the most respected and valued.
b. The company monitors sources of brand equity.
c. The pricing strategy is based on consumer perceptions of value.
d. The brand stays relevant.
e. The brand excels at delivering the benefits consumers truly desire.
Answer: a Page: 275 Level of difficulty: Hard
7. ________ is endowing products and services with the power of a brand.
a. Brand image
b. The branding concept
c. Branding
d. Brand positioning
e. Brand partitioning
Answer: c Page: 275 Level of difficulty: Easy
8. Brand ________ is the added value endowed to products and services.
a. loyalty
b. equity
c. preference
d. satisfaction
e. benefits
Answer: b Page: 276 Level of difficulty: Medium
9. The premise of ________ models is that the power of a brand lies in what customers have seen, read, learned, thought, and felt about the brand over time.
a. product-based brand equity
b. service-based brand equity
c. functional-based brand equity
d. mission-driven brand equity
e. consumer-based brand equity
Answer: e Page: 276 Level of difficulty: Hard
10. ________ can be defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand.
a. Mission-driven brand equity
b. Consumer-based brand equity
c. Product-driven brand equity
d. Service-driven brand equity
e. Function-based brand equity
Answer: b Page: 277 Level of difficulty: Medium
11. When a consumer expresses thoughts, feelings, images, experiences, beliefs, and so on that become associated with the brand, the consumer is expressing brand ________.
a. knowledge
b. loyalty
c. behavior
d. preference
e. equity
Answer: a Page: 277 Level of difficulty: Easy
12. ________ is what drives the differences that manifest themselves in brand equity.
a. Brand image
b. Consumer income
c. Consumer purchasing power
d. Consumer knowledge
e. Brand perception
Answer: d Page: 277 Level of difficulty: Medium
13. Strong brands possess all of the following marketing advantages EXCEPT ________.
a. greater loyalty
b. larger margins
c. guaranteed profits
d. improved perceptions of product performance
e. more elastic consumer response to price decreases
Answer: c Page: 277 Level of difficulty: Medium
14. 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 mission
c. brand equity
d. a brand position
e. a brand concept
Answer: a Page: 278 Level of difficulty: Hard
15. There are four key components—or pillars—of brand equity. Which of those components or pillars measures the breadth of a brand’s appeal?
a. Differentiation
b. Relevance
c. Esteem
d. Knowledge
e. Value
Answer: b Page: 278 Level of difficulty: Hard
16. Two pillars that point to the brand’s future value, rather than just reflecting its past, are differentiation and relevance. Differentiation and relevance combine to determine what is called brand ________.
a. position
b. image
c. depth
d. knowledge
e. strength
Answer: e Page: 279 Level of difficulty: Medium
17. David Aaker views brand equity as a set of five categories of brand assets and liabilities linked to a brand that add or subtract from the value provided by a product or service to a firm and/or that firm’s customers. All of the following would be among Aaker’s five categories EXCEPT ________.
a. brand loyalty
b. brand awareness
c. perceived quality
d. brand price
e. brand associations
Answer: d Page: 279 Level of difficulty: Hard
18. According to Aaker, a particularly important concept for building brand equity is ________—the unique set of brand associations that represent what the brand stands for and promises to consumers.
a. brand knowledge
b. brand preference
c. brand identity
d. brand vision
e. brandable differences
Answer: c Page: 279 Level of difficulty: Medium
19. General Motors states that its ________ is a “world class car with employees who treat customers with respect and as friends.”
a. core identity
b. perceived identity
c. extended identity
d. defensible identity
e. competitive identity
Answer: a Pages: 280 Level of difficulty: Medium
20. According to the BRANDZ model of brand strength, brand building involves a sequential series of steps. Which of these steps would address or answer the question “Do I know about it?”
a. Relevance
b. Presence
c. Performance
d. Advantage
e. Bonding
Answer: b Page: 280 Level of difficulty: Medium
21. The MasterCard “priceless” ad campaign is a good example of brand duality. Two advantages of the brand are demonstrated in this campaign. What are those advantages?
a. Positive and negative advantages.
b. Local and global advantages.
c. Rational and emotional advantages.
d. Segmented and differentiated advantages.
e. Price and promotional advantages.
Answer: c Page: 280 Level of difficulty: Hard
22. All of the following are considered to be among the “six brand building blocks” EXCEPT ________.
a. brand salience
b. brand performance
c. brand imagery
d. brand feelings
e. brand pride
Answer: e Page: 280 Level of difficulty: Medium
23. With respect to the “six brand building blocks,” ________ focus on customers’ own personal opinions and evaluations.
a. brand salience
b. brand performance
c. brand imagery
d. brand judgments
e. brand resonance
Answer: d Page: 280 Level of difficulty: Medium
24. With respect to the brand resonance pyramid, at which of the following “building block levels” would we expect the consumer to have developed an intense, active loyalty?
a. Salience
b. Imagery
c. Feelings
d. Judgments
e. Resonance
Answer: e age: 281 Level of difficulty: Hard
25. 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 supporting marketing 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.
Answer: c Page: 281 Level of difficulty: Medium
26. ________ are those trademarkable devices that serve to identify and differentiate the brand.
a. Brand elements
b. Brand value
c. Brand perception
d. Brand image
e. Brand tracks
Answer: a Page: 281 Level of difficulty: Medium
27. Six brand elements assist in brand building. Which of the following would NOT be among those preferred brand elements?
a. Adaptable
b. Protectable
c. Memorable
d. Likeability
e. Subliminal nature
Answer: e Page: 282 Level of difficulty: Medium
28. 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
Answer: d Page: 282 Level of difficulty: Medium
29. Before selecting a brand name, marketers must be assured that the brand name will be well received and understood by the consumers. In order to do this several tests may need to be performed. A(n) ________ asks such questions as “How easily is the name pronounced?”
a. association test
b. learning test
c. memory test
d. preference test
e. design test
Answer: b Page: 282 Level of difficulty: Medium
30. Brand names are not only important brand element. Often, ________, the more important it is that brand elements capture the brand’s intangible characteristics.
a. the less concrete brand benefits are
b. the more concrete brand benefits are
c. the more varied brand perceptions are
d. the less varied brand perceptions are
e. the more sophisticated brand benefits are
Answer: a Pages: 282–283 Level of difficulty: Hard
31. With respect to powerful brand elements, a ________ is an extremely efficient means to build brand equity. The element can function as useful “hooks” or “handles” to help consumers grasp what the brand is and what makes it special.
a. spokesperson
b. product shape
c. slogan
d. patent
e. promotional descriptor
Answer: c Page: 283 Level of difficulty: Medium
32. Brand elements and secondary associations can make important contributions to building brand equity; however, the primary input comes from ________.
a. the product or service and supporting marketing activities
b. marketing research
c. the consumer
d. the distributors
e. the organizational mission statement
Answer: a Page: 284 Level of difficulty: Medium
33. 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 element
c. brand trait
d. brand character
e. brand contact
Answer: e Page: 284 Level of difficulty: Medium
34. Chupa Chups has the distinction of being the world’s largest maker of ________ and has begun to diversify its brand beyond its original market (children). Today, Chupa Chups is targeting teens and youth through “nonendorser endorsers” such as Jerry Seinfeld.
a. veggie chips
b. apple juice
c. roller skates
d. lollipops
e. granola
Answer: d Page: 284 Level of difficulty: Hard
35. Considering holistic marketing activities, the rapid expansion of ________ has created opportunities to personalize marketing.
a. target marketing
b. globalization
c. the Internet
d. standardization
e. CD technology
Answer: c Page: 284 Level of difficulty: Hard
36. ________ is about making sure that the brand and its marketing are as relevant as possible to as many customers as possible—a challenge, given that no two customers are identical.
a. Personalizing marketing
b. Segmenting marketing
c. Brand imagery
d. Emotionalizing brands
e. Rationalizing brands
Answer: a Page: 284 Level of difficulty: Medium
37. The traditional “marketing-mix” concept and the notion of the “4 Ps” may not adequately describe modern marketing programs. ________ is about mixing and matching marketing activities to maximize their individual and collective effects.
a. Personalizing marketing
b. Individualizing marketing
c. Globalizing marketing
d. Institutionalizing marketing
e. Integrating marketing
Answer: e Page: 285 Level of difficulty: Medium
38. Godin identifies five specific steps to enhance effective permission marketing. Which of the following would NOT be among those steps?
a. Offer the prospect an incentive to volunteer.
b. Offer the interested prospect a curriculum over time that teaches the consumer about the product or service.
c. Reinforce the incentive to guarantee that the prospect maintains the permission.
d. Always offer a monetary incentive to demonstrate sincerity of the offer.
e. Over time, leverage the permission to change consumer behavior toward profits.
Answer: d Page: 285 Level of difficulty: Hard
39. ________ is the consumers’ ability to identify the brand under different conditions, as reflected by their brand recognition or recall performance.
a. Brand awareness
b. Brand image
c. Brand alternation
d. Brand perception
e. Brand reflection
Answer: a Page: 286 Level of difficulty: Medium
40. A marketing manager has decided to study the perceptions and beliefs held by consumers, as reflected in the associations held in consumer memory. Which of the following terms is most closely associated with the marketing manager’s objective of study?
a. Brand awareness
b. Brand image
c. Brand element
d. Brand concept
e. Brand trait
Answer: b Page: 286 Level of difficulty: Medium
41. For a brand to succeed, marketers must “walk the walk” and ensure that employees and marketing partners do the same. Marketers often must use ________ to motivate those groups to support the brand.
a. global branding
b. retro-branding
c. internal branding
d. external branding
e. dual branding
Answer: c Page: 286 Level of difficulty: Medium
42. Mark Thomas has observed that Shell delivers on its promises to supply the best gasoline possible to the driving public. Shell promotions, employees, and distributors send a common and consistent message about delivering on Shell promises to Mr. Thomas. A good term that describes what occurs when customers experience the company as delivering on its brand promise is the term ________.
a. brand image
b. brand enhancement
c. brand belief
d. brand attitude
e. brand bonding
Answer: e Page: 286 Level of difficulty: Medium
43. The main secondary sources of brand knowledge come from all of the following EXCEPT ________.
a. other brands
b. people
c. things
d. local, state, and federal governments
e. places
Answer: d Page: 287 Level of difficulty: Easy
44. Brand equity can be measured in two ways. Which of the following would be a good representation of one of those ways?
a. Statistical analysis of demographics.
b. Secondary evaluation of governmental statistics.
c. Directly assessing the actual impact of brand knowledge on consumer response to different aspects of marketing.
d. Evaluating published statistics of competitors.
e. Hiring independent evaluators.
Answer: c Page: 288 Level of difficulty: Medium
45. A structured approach to assessing the sources and outcomes of brand equity and the manner in which marketing activities create brand value is called ________.
a. the brand value chain
b. the brand portfolio
c. the brand life cycle
d. brand partitioning
e. brand positioning
Answer: a Page: 288 Level of difficulty: Medium
46. A brand manager is concerned that his organization’s brand image and physical sales are slipping in the marketplace. The manager has decided to query consumers about the health of the brand and try to discover ways to leverage the brand’s equity. Which of the following terms will most likely provide the structure and process for the manager’s investigation?
a. A brand demographic matrix analysis.
b. A secondary search of good brand characteristics.
c. A brand audit.
d. An organizational audit.
e. A brand positioning study.
Answer: c Page: 289 Level of difficulty: Medium
47. Within a brand audit, the ________ has as its purpose to provide a current, comprehensive profile of how all the products and services sold by a company are marketed and branded.
a. cost curve calculation
b. product balance sheet
c. strategic plan
d. brand inventory
e. product assessment
Answer: d Page: 289 Level of difficulty: Medium
48. Many firms use ________ to supplement traditional focus groups. They study consumers in their everyday habitats at home, at work, at play, or shopping.
a. ethnography
b. demography
c. geodemography
d. psychographics
e. product profiles
Answer: a Page: 290 Level of difficulty: Hard
49. Irene and Dave Washburn are part of a long-term ________. The Washburn’s supply a national research firm with information about their brand habits, preferences, dislikes, and beliefs on a monthly basis for a period of two years.
a. image study
b. demographic study
c. psychological profile study
d. promotion management study
e. tracking study
Answer: e Page: 290 Level of difficulty: Medium
50. ________ has the job of estimating the total financial value of the brand.
a. Brand tracking
b. Brand auditing
c. Brand equity
d. Brand valuation
e. Brand partitioning
Answer: d Page: 290 Level of difficulty: Medium
51. According to 2004 Brand Value estimates, ________ was ranked number-one in the world with a brand value of $67.39 billion.
a. Microsoft
b. IBM
c. Coca-Cola
d. GE
e. McDonald’s
Answer: c Page: 291 Level of difficulty: Medium
52. A company’s major enduring asset is ________.
a. its leadership
b. its brand
c. its culture
d. its shareholders
e. its workers
Answer: b Page: 291 Level of difficulty: Easy
53. According to Interbrand’s Brand Strength formula, the most important factor in the equation is ________ with a 25 percent weight.
a. stability
b. market
c. geographic spread
d. trend
e. leadership
Answer: e Page: 292 Level of difficulty: Hard
54. According to Scott Bedbury’s book, A New Brand World, all of the following are considered to be important principles for twenty-first century branding EXCEPT ________.
a. consumers will tell you what your brand image should be
b. relying on brand awareness has become marketing fool’s gold
c. you have to know it before you can grow it
d. great brands establish enduring customer relationships
e. all brands need good parents
Answer: a Page: 294 Level of difficulty: Hard
55. When a firm uses an established brand to introduce a new product, it is called a(n) ________.
a. sub-brand
b. brand value
c. brand extension
d. brand mix
e. brand posture
Answer: c Page: 296 Level of difficulty: Medium
56. All of the following would be examples of companies that use family branding as one of their branding strategies EXCEPT ________.
a. Campbell Soup
b. Sears
c. Heinz
d. General Electric
e. Hunt’s
Answer: b Page: 297 Level of difficulty: Hard
57. According to Ries and Trout, Cadbury suffered from the ________ when the company allowed its brand to become diluted by putting their name on such variants as mashed potatoes, powdered milk, soups, beverages, as well as chocolates and candies.
a. “greed is good” trap
b. “pyramid principle”
c. “branding fallout” concept
d. “image syndrome”
e. “line-extension” trap
Answer: e Page: 299 Level of difficulty: Hard
58. A ________ is the set of all brands and brand lines a particular firm offers for sale to buyers in a particular category.
a. brand partition
b. brand position
c. brand portfolio
d. brand concept
e. brand image
Answer: c Page: 301 Level of difficulty: Medium
59. ________ 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. Blitzkrieg
e. Individual
Answer: a Page: 302 Level of difficulty: Medium
60. The role of ________ in the brand portfolio often may be to attract customers to the brand franchise. Trading up will often occur with this type of brand.
a. the cash cow
b. flanker brand
c. fighting brand
d. high-end prestige brand
e. low-end entry-level brand
Answer: e Page: 303 Level of difficulty: Medium
True/False
61. At the heart of a successful brand are the successful people that run the organization.
Answer: False Page: 273 Level of difficulty: Medium
62. Google’s successful brand name was derived from the word googol—the number represented by a 1 followed by 100 zeroes.
Answer: True Page: 273 Level of difficulty: Medium
63. The American Marketing Association defines a brand 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.”
Answer: True Page: 274 Level of difficulty: Easy
64. One of the attributes shared by the world’s strongest brands is that the brand becomes invulnerable to attack from competitors due to the support of the marketplace.
Answer: False Page: 275 Level of difficulty: Hard
65. The added value endowed to products and services is called brand equity.
Answer: True Page: 276 Level of difficulty: Medium
66. Brand knowledge is indicated when the consumer refuses to purchase competitive brands.
Answer: False Page: 277 Level of difficulty: Medium
67. 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.
Answer: True Page: 277 Level of difficulty: Medium
68. The marketer’s vision of what the brand must be and do for consumers is called a brand promise.
Answer: True Page: 278 Level of difficulty: Medium
There are four key components—or pillars—of brand equity; one of these components is called knowledge.
Answer: True Page: 278 Level of difficulty: Medium
69. An illustration of the extended brand identity of GM’s Saturn brand is a “world-class car with employees who treat customers with respect and as friends.”
Answer: False Page: 280 Level of difficulty: Hard
Under the BRANDZ model of brand strength, the brand objective of bonding is translated to mean “nothing else beats it.”
Answer: True Page: 280 Level of difficulty: Easy
Brand resonance is associated with how a brand name sounds when said by spokespersons or consumers.
Answer: False Page: 280 Level of difficulty: Hard
73. Brand salience relates to how often and easily the brand is evoked under various purchase or consumption situations.
Answer: True Page: 280 Level of difficulty: Medium
74. Brand imagery is the consumers’ emotional responses and reactions with respect to the brand.
Answer: False Page: 280 Level of difficulty: Medium
75. In the brand resonance pyramid, the lowest level (e.g., identity—Who are you?) is associated with what is called salience.
Answer: True Page: 281 Level of difficulty: Hard
76. A few good illustrations of power brand elements are Nike’s “swoosh” logo, the empowering “Just Do It” slogan, and the mythological “Nike” name based on the winged goddess of victory.
Answer: True Page: 281 Level of difficulty: Medium
77. One of the selection criteria for creating a successful brand element is that it should be projectable.
Answer: True Page: 282 Level of difficulty: Medium
78. If a brand element has the characteristic of being memorable, it is said to mean that the brand is credible and suggestive of its corresponding category.
Answer: False Page: 282 Level of difficulty: Hard
79. One of the ways for testing a brand element is to ask consumers how well they remember the brand name; this is called a learning test.
Answer: False Page: 282 Level of difficulty: Medium
80. A powerful—but sometimes overlooked—brand element is slogans.
Answer: True Page: 283 Level of difficulty: Easy
81. A classic case of a company using a slogan to build brand equity is that of Avis’s 41-year-old “We Try Harder” ad campaign.
Answer: True Page: 283 Level of difficulty: Easy
82. A brand contract is defined as any information-bearing experience a customer or prospect has with a brand.
Answer: True Page: 284 Level of difficulty: Medium
83. Personalizing marketing is based on the fact that all customers are identical in several ways.
Answer: False Page: 284 Level of difficulty: Medium
84. Gillette sent 1,000 young males a new, innovative razor product. In return, the company asked the young males to supply their e-mail addresses so future contacts could be initiated. This would be an example of what is called permission marketing.
Answer: True Page: 285 Level of difficulty: Medium
85. Brand awareness can be perceived as being the consumers’ ability to identify the brand under different conditions, as reflected by their brand recognition or recall performance.
Answer: True Page: 286 Level of difficulty: Medium
86. Internal branding is the perceptions and beliefs held by consumers, as reflected in the associations held in consumer memory.
Answer: False Page: 286 Level of difficulty: Hard
87. Marketers must now “walk the walk” to deliver the brand promise. Often internal branding is necessary to make sure that all employees assist in meeting the brand promise.
Answer: True Page: 286 Level of difficulty: Medium
88. The brand promise will not be delivered unless everyone in the company lives the brand.
Answer: True Page: 286 Level of difficulty: Easy
89. The indirect approach to assessing brand equity assesses the actual impact of brand knowledge on consumer response to different aspects of marketing.
Answer: False Page: 288 Level of difficulty: Medium
90. A brand value chain often does not exist because of an organization’s commitment to its service value chain.
Answer: False Page: 288 Level of difficulty: Medium
91. The brand audit can be used to set strategic direction for the brand.
Answer: True Page: 289 Level of difficulty: Easy
92. The purpose of brand strength (an assessment tool) is to provide a current, comprehensive profile of how all the products and services sold by a company are marketed and branded.
Answer: False Page: 289 Level of difficulty: Hard
93. In order to explore more detailed information about brands, many firms are now using ethnography to supplement traditional focus groups.
Answer: True Page: 290 Level of difficulty: Medium
Tracking studies collect information from consumers on a routine basis over time.
Answer: True Page: 290 Level of difficulty: Easy
95. In essence, brand equity is basically the same concept as brand valuation.
Answer: False Page: 290 Level of difficulty: Medium
96. At present, the most valuable brand in the world is Microsoft.
Answer: False Page: 291 Level of difficulty: Medium
97. A company’s most enduring asset is its intellectual capital generated by the top
officers of the organization.
Answer: False Page: 291 Level of difficulty: Medium
98. With respect to brand revitalization, the primary strategy for recovery is to hire a
public relations firm to think of a new image for the firm and its products.
Answer: False Page: 294 Level of difficulty: Hard
99. When Honda expanded its brand into such areas as automobiles, motorcycles, snowblowers, lawnmowers, marine engines, and snowmobiles, it was pursuing a strategy called category extension of its brand.
Answer: True Page: 296 Level of difficulty: Medium
100. Brand dilution occurs when consumers no longer associate a brand with a specific product or highly similar products and start thinking less of the brand.
Answer: True Page: 299 Level of difficulty: Medium
Essay
101. The world’s strongest brands share a list of common attributes. List and briefly characterize five of those attributes.
Suggested Answer: According to information presented in the text, the world’s strongest brands possess ten common characteristics. Those characteristics appear as: (1) the brand excels at delivering the benefits consumers truly desire; (2) the brand stays relevant; (3) the pricing strategy is based on consumer perceptions of value; (4) the brand is properly positioned; (5) the brand is consistent; (6) the brand portfolio and hierarchy makes sense; (7) the brand makes use of and coordinates a full repertoire of marketing activities to build equity; (8) the brand’s managers understand what the brand means to consumers; (9) the brand is given proper, sustained support; and, (10) the company monitors sources of brand equity. The students may choose any five of the above ten for their discussion. See chapter material for addition discussion material.
Page: 275 Level of difficulty: Hard
102. Explain the concept of brand equity.
Suggested 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. Brand equity is an important intangible asset that has psychological and financial value to the firm.
Page: 276 Level of difficulty: Medium
103. 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.
Suggested Answer: The BAV model is based on research of almost 200,000 consumers in 40 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) differentiation—measures the degree to which a brand is seen as different from others; (2) relevance—measures the breadth of a brand’s appeal; (3) esteem—measures how well the brand is regarded and respected; and (4) knowledge—measures how familiar and intimate consumers are with the brand. For additional information on the BAV model, see chapter section.
Pages: 278–279 Level of difficulty: Medium
104. The creation of significant brand equity involves reaching the top or pinnacle of the brand pyramid. List and briefly characterize the six components of the brand resonance pyramid.
Suggested Answer: The six components of the brand resonance pyramid include brand: (1) salience—relates to how often and easily the brand is evoked under various purchase or consumption situations; (2) performance—relates to how the product or service meets customers’ functional needs; (3) 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) judgments—focus on consumers’ own personal opinions and evaluations; (5) feelings—customers’ emotional responses and reactions with respect to the brand; and, (6) 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. For additional information on the brand resonance pyramid, see chapter material.
Pages: 280–281 Level of difficulty: Hard
105. There are six criteria used in creating brand elements. The first three can be characterized as “brand building” in terms of how brand equity can be built through the judicious choice of a brand element. The latter three are more “defensive” and are concerned with how the brand equity contained in the brand element can be leveraged and preserved in the face of different opportunities and constraints. List and briefly characterize the six criteria.
Suggested Answer: The six elements are: (1) memorable, (2) meaningful, (3) likeability, (4) transferable, (5) adaptable, and (6) protectible. For characterizations, see chapter materials.
Page: 282 Level of difficulty: Medium
106. Describe the similarities and differences between the concepts of brand awareness and brand image.
Suggested Answer: Brand awareness is consumers’ ability to identify the brand under different conditions, as reflected by their brand recognition or recall performance. Brand image is the perceptions and beliefs held by consumers, as reflected in the associations held in consumer memory. Integration is especially critical with marketing communications. From the perspective of brand building, all communication options should be evaluated in terms of ability to affect brand equity. Each communication option can be judged in terms of the effectiveness and efficiency with which it affects brand awareness and with which it creates, maintains, or strengthens brand image.
Page: 286 Level of difficulty: Medium
107. Describe the meaning and function of a brand audit.
Suggested Answer: To better understand their brands, 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.
Page: 289 Level of difficulty: Medium
108. According to top brand valuation firm Interbrand, brand valuation is based on an assessment of what the value is today of the earnings or cash flow the brand can be expected to generate in the future. The Interbrand Brand Strength Formula uses seven components to make this assessment. What are those seven components and their associated weights in the formula?
Suggested answer: The Interbrand Brand Strength Formula includes: (1) leadership (25 percent), (2) stability (15 percent), (3) market (10 percent), (4) geographic spread (25 percent), (5) trend (10 percent), (6) support (10 percent), and (7) protection (5 percent). For additional information on the Interbrand formula, see chapter materials.
Page: 292 Level of difficulty: Hard
109. 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?
Suggested 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.
Page: 296 Level of difficulty: Medium
110. There are a number of specific roles brands can play as part of a brand portfolio. List and briefly describe the four roles described in the text.
Suggested 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 in the brand 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. For additional information on the four roles, see chapter materials.
Pages: 302–303 Level of difficulty: Hard
APPLICATION QUESTIONS
Multiple Choice
111. Based on a public poll conducted in 2002, ________ was named “Brand of the Year” by Interbrand branding consultants; in fact, the brand name has become a verb that is used to describe an online search.
a. Yahoo!
b. Microsoft
c. Linux
d. Google
e. America Online
Answer: d Page: 273 Level of difficulty: Easy
112. Marketers of successful twenty-first-century brands must excel at ________—the design and implementation of marketing activities and programs to build, measure, and manage brands to maximize their value.
a. promotional planning
b. brand personification
c. strategic brand management
d. brand awareness
e. competitive differential advantage
Answer: c Page: 274 Level of difficulty: Medium
113. All of the following are valuable functions performed by brands for firms EXCEPT ________.
a. they simplify product handling or tracing
b. helps to organize inventory and accounting records
c. offers the firm legal protection through registered trademarks
d. intellectual property rights can be protected
e. a branded product is almost always guaranteed to be profitable
Answer: e Page: 274 Level of difficulty: Medium
114. If a brand has the attributes of staying relevant, is properly positioned, is consistent, and makes use of and continues a full repertoire of marketing activities to build equity, the brand is most likely to be a ________.
a. successful brand
b. domestic brand
c. regional brand
d. global brand
e. service brand
Answer: a Page: 275 Level of difficulty: Easy
115. Coca-Cola, Calvin Klein, Gucci, Tommy Hilfiger, Marlboro and others have become leaders in their product categories by understanding ________ and desires and creating relevant and appealing images around their products.
a. consumer perceptions
b. consumer motivations
c. consumer behaviors
d. consumer demographics
e. consumer market segments
Answer: b Page: 276 Level of difficulty: Hard
116. Brands must create strong, favorable, and unique brand associations with customers, as has been the case with Volvo (safety), Hallmark (________), and Harley-Davidson (adventure).
a. caring
b. love
c. happiness
d. giving
e. humorous
Answer: a Page: 277 Level of difficulty: Medium
117. Apple achieves incredible brand loyalty largely by delivering on its mission as defined by CEO Steve Jobs. That mission is best described as: ________.
a. “To dominate through technology”
b. “To create great things that change people’s lives”
c. “To think fast; introduce new products faster”
d. “To appeal to independent thinkers”
e. “To make the Mac world a reality”
Answer: b Page: 277 Level of difficulty: Medium
118. A marketing manager stresses to a newly hired brand manager the importance of having a strong brand. All of the following would be advantages that the marketing manager might stress to his subordinate EXCEPT ________.
a. improved perceptions of product performance
b. greater loyalty
c. less vulnerability to marketing crises
d. lower margins
e. possible licensing opportunities
Answer: d Page: 277 Level of difficulty: Medium
119. Virgin, the brainchild of England’s flamboyant Richard Branson, vividly illustrates the power enjoyed and responsibility assumed by a strong brand. Which of the following most accurately describes Branson’s brand strategy?
a. Compete by offering severe discounts to meet competitors’ normal pricing strategies.
b. Use the credibility of the brand to challenge the dominant players in a range of industries where the perception is that consumers are not getting value for money.
c. Use promotion to inspire brand loyalty and mass consumption.
d. Compete by using guerrilla-marketing tactics.
e. To copy, copy, copy whenever possible to save funds for promotional warfare.
Answer: b Page: 278 Level of difficulty: Hard
120. If a manager is looking for a “report card” on past performance of a brand, he or she should turn to an examination of the brand ________.
a. strength
b. compatibility
c. stature
d. image
e. dominance
Answer: c Page: 279 Level of difficulty: Medium
121. According to Aaker, brand identity consists of twelve dimensions organized around four perspectives. Which of the four perspectives would apply to the dimensions of brand personality and brand-customer relationships?
a. Brand-as-product
b. Brand-as-organization
c. Brand-as-person
d. Brand-as-symbol
e. Brand-as-competitor
Answer: c Page: 279 Level of difficulty: Hard
122. Any time a consumer thinks of a dependable car battery that might be needed in an emergency situation such as a snow storm, the consumer thinks first of Die Hard batteries. This would be an example of what is called brand ________.
a. salience
b. imagery
c. judgments
d. feelings
e. scope
Answer: a Page: 280 Level of difficulty: Medium
123. The famous “Plop, plop, fizz, fizz! Oh, what a relief it is!” campaign is a good example of what is called a brand ________.
a. element
b. tagline
c. visual
d. personification
e. perception
Answer: a Page: 281 Level of difficulty: Medium
124. One of the advantages enjoyed by Apple Computers is how aesthetically appealing its products are perceived to be. Which of the following brand element choice criteria matches to Apple’s aesthetic appeal?
a. memorable
b. meaningful
c. likeability
d. protectible
e. adaptable
Answer: c Page: 282 Level of difficulty: Medium
125. The idea for the famous Avis slogan “We Try Harder” came from an unusual source. Which of the following would be most closely associated with that source?
a. From an Avis manager during a meeting with ad agency account executives.
b. From a customer during a sponsored contest.
c. From a high school student during a career day.
d. From factory worker during a scheduled management/union meeting.
e. From a member of the National Transportation and Safety Board.
Answer: a Page: 283 Level of difficulty: Hard
126. According to Seth Godin, marketers can no longer use ________. Instead, marketers should turn to permission marketing as a way to ensure long-term customer relationships and loyalty.
a. task-oriented marketing
b. interruption marketing
c. hard core selling
d. advocacy marketing
e. one-to-one marketing
Answer: b Page: 285 Level of difficulty: Medium
127. If the Olive Garden sends employees to special classes to teach them the value of the brand and how pasta is much more than just pasta, Olive Garden is using ________ to accomplish this task.
a. interruption marketing
b. loyalty marketing
c. cohort marketing
d. macrobranding
e. internal branding
Answer: e Page: 286 Level of difficulty: Medium
128. If an organization has as one of its objectives to collect information from consumers on a routine basis over time, the organization will most likely use a technique called ________ to accomplish the desired objective.
a. tracking studies
b. nonmetric-multidimensional scaling
c. Likert scaling
d. brand visualization
e. internal branding
Answer: a Page: 290 Level of difficulty: Easy
129. According to Interbrand, brand earnings are calculated by subtracting a number of items from brand sales. All of the following would be among those items EXCEPT ________.
a. costs of brand sales
b. marketing costs
c. variable and fixed overheads
d. all employee costs and benefits
e. remuneration of capital charge
Answer: d Page: 292 Level of difficulty: Medium
130. Four general strategies can be used in branding. Which of the following strategies is the one used by Kellogg’s when it follows a sub-branding policy with Kellogg’s Rice Krispies, Kellogg’s Raisin Bran, and Kellogg’s Corn Flakes?
a. Individual names.
b. Blanket family names.
c. Separate family names for all products.
d. Global names for all products.
e. Corporate name combined with individual product names.
Answer: e Page: 297 Level of difficulty: Medium
Short Answer
131. Assume you are a marketing manager that wishes pursue a process of strategic brand management. List the four main steps that you would most likely go through to accomplish this task.
Suggested 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.
Page: 274 Level of difficulty: Hard
132. How does the American Marketing Association define the term brand?
Suggested 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.”
Page: 274 Level of difficulty: Easy
133. Assume that you are marketing manager attempting to explain the concept of brand equity to a new employee in your department. What would be your explanation?
Suggested 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. Brand equity is an important intangible asset that has psychological and financial value to the firm.
Page: 276 Level of difficulty: Medium
134. Your company desires to have positive customer-based brand equity. What has to occur for this to happen?
Suggested 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 as compared to when it is not.
Page: 277 Level of difficulty: Easy
135. Volvo has a strong brand association with respect to brand knowledge when consumers perceive it as a very safe care (safety). Explain the concept of brand knowledge.
Suggested 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.
Page: 277 Level of difficulty: Medium
136. As a marketing manager, you have made a commitment to having a strong brand. List five advantages shared by other strong brands that you will most likely have to emulate to accomplish this objective.
Suggested Answer: Strong brands have the following advantages: (1) improved perceptions of product performance; (2) greater loyalty; (3) less vulnerability to competitive marketing actions; (4) less vulnerability to marketing crises; (5) larger margins; (6) more inelastic consumer response to price increases; (g) more elastic consumer response to price decreases; (7) greater trade cooperation and support; (8) increased marketing communications effectiveness; (9) possible licensing opportunities; and, (10) additional brand extension opportunities. Students are to pick five of the above.
Page: 277 Level of difficulty: Hard
137. Brand equity has four components—differentiation, relevance, esteem, and knowledge. How are these components combined to produce brand strength and brand stature?
Suggested Answer: Differentiation and relevance combine to produce brand strength. Esteem and knowledge together create brand stature.
Pages: 278–279 Level of difficulty: Medium
138. According to Aaker, a particularly important concept for building brand equity is brand identity. Brand identity is organized around four perspectives. What are those perspectives?
Suggested Answer: The four perspectives are: (1) brand-as-product, (2) brand-as-organization, (3) brand-as-person, and (4) brand-as-symbol.
Page: 279 Level of difficulty: Hard
139. According to the BRANDZ model of brand strength, brand building involves a series of five sequential steps. What are those five sequential steps?
Suggested Answer: The steps are in ascending order: (1) presence, (2) relevance, (3) performance, (4) advantage, and (5) bonding.
Page: 280 Level of difficulty: Medium
140. Most strong brands employ multiple brand elements. Nike has three such powerful brand elements. According to the text, what are those brand elements?
Suggested Answer: Nike’s brand elements are: (1) the distinctive “swoosh” logo, (2) the empowering “Just Do It” slogan, and (3) the mythological “Nike” name base on the winged goddess of victory.
Page: 281 Level of difficulty: Medium
141. As a brand manager you would like to have your brand (brand name) to be protectible. Explain what you mean by “protectible” and give an illustration.
Suggested Answer: As a brand manager you would have to consider the questions of “How legally protectible is the brand element?” “How competitively protectible?” and “Can it be easily be 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. Answers on examples may vary. The above are a few illustrations that demonstrate the protectible characteristic.
Page: 282 Level of difficulty: Medium
142. Jones Soda is presented in the text as an example of a company that has succeeded in personalizing their brand. Discuss how the company has accomplished this feat.
Suggested Answer: As indicated in the text, Peter van Stolk founded Jones Soda on the premise that Gen Y consumers would be more accepting of a new soft-drink brand if they felt they discovered it themselves. Jones Soda initially was sold only in shops that sell surfboards, snowboards, and skateboards. The Jones Soda Web site encourages fans to send in personal photos for possible use on Jones Soda labels. Although only maybe 40 or so are picked annually from the tens of thousands of entries, the approach helps to create relevance and an emotional connection.
Page: 285 Level of difficulty: Hard
143. Permission marketing is becoming increasingly popular with marketers. Seth Godin, a pioneer in the technique, recommends five steps in becoming an effective permission marketer. List Godin’s five steps.
Suggested Answer: Godin’s five steps are: (1) offer the prospect an incentive to volunteer (e.g., free sample, sales promotion, or contest); (2) offer the interested prospect a curriculum over time that teaches the consumer about the product or service; (3) reinforce the incentive to guarantee that the prospect maintains the permission; (4) offer additional incentives to get more permission from the consumer; and, (5) over time, leverage the permission to change consumer behavior toward profits.
Page: 285 Level of difficulty: Hard
144. 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.
Suggested Answer: The two approaches are: (1) an indirect approach assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures; and (2) a direct approach assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing.
Page: 288 Level of difficulty: Easy
145. If your marketing manager asked you to design and implement a brand value chain, explain what you have been asked to do.
Suggested Answer: The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the manner in which marketing activities create brand value. The model assumes that a number of linking factors intervene between the stages and determine the extent to which value created at
one stage transfers to the next stage. For additional insight and discussion, see chapter section.
Page: 288 Level of difficulty: Medium
146. A marketing research manager has just asked you to conduct a brand exploratory. What have you been asked to do? Explain.
Suggested Answer: The brand exploratory is research activity conducted to understand what consumers think and feel about the brand and its corresponding product category to identify sources of brand equity. For additional details, see chapter section.
Page: 290 Level of difficulty: Easy
147. Distinguish between brand equity and brand valuation.
Suggested Answer: According to information provided in the text, brand equity is the added value endowed to products and services. Brand valuation has the job of estimating the total financial value of the brand.
Pages: 276–290 Level of difficulty: Easy
148. Volvo is a good illustration of a company that has been successful in defending its brand equity. However, when Volvo deviated from its brand heritage, sales slumped. What is the key concept on which the Volvo brand was built and, when reinforced, eventually revived the company’s slumping sales?
Suggested Answer: According to information provided in the text, Volvo’s key branding concept is safety.
Page: 293 Level of difficulty: Easy
149. Scott Bedbury, author of A New Brand World, cites eight principles on which twenty-first-century branding should be built. List four of those principles.
Suggested Answer: Bedbury’s eight principles are: (1) relying on brand awareness has become marketing’s fool’s gold; (2) you have to know it before your can grow it; (3) always remember the Spandex rule of brand extension; (4) great brands establish enduring customer relationships; (5) everything matters; (6) all brands need good parents; (7) big is no excuse for being bad; and, (8) relevance, simplicity, and humanity. Students may choose from any of the above eight. See chapter section for additional discussion.
Page: 294 Level of difficulty: Hard
150. As a branding manager, you have recommended to your board of directors a corporate policy of blanket family branding. Write a brief statement outlining the advantages of blanket family branding.
Suggested Answer: This policy is followed by Heinz and General Electric. A blanket family name has 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. Campbell’s introduces new soups under its brand name with extreme simplicity and achieves instant recognition.
Page: 297 Level of difficulty: Medium
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