Page 264 - Marketing Management

Creating Brand

Equity

One of the most valuable intangible assets of a firm is its brands, and it is
incumbent on marketing to properly manage their value. Building a strong brand is both an art and
a science. It requires careful planning, a deep long-term commitment, and creatively designed
and executed marketing. A strong brand commands intense consumer loyalty—at its heart is a
great product or service.

While attending yoga classes, Canadian entrepreneur Chip Wilson decided the cotton-
polyester blends most fellow students wore were too uncomfortable. After designing a
well-fitting, sweat-resistant black garment to sell, he also decided to open a yoga stu-
dio, and lululemon was born.The company has taken a grassroots approach to growth
that creates a strong emotional connection with its cus-
tomers. Before it opens a store in a new city, lululemon first identifies Marketers of successful 21st-century brands
influential yoga instructors or other fitness teachers. In exchange for a must excel at the strategic brand management process.
year’s worth of clothing, these yogi serve as “ambassadors,” hosting Strategic brand management combines the design and
students at lululemon-sponsored classes and product sales events. implementation of marketing activities and programs to build,
measure, and manage brands to maximize their value. The
They also provide product design advice to the company. The cult-like
strategic brand management process has four main steps:
devotion of lululemon’s customers is evident in their willingness to pay
$92 for a pair of workout pants that might cost only $60 to $70 from • Identifying and establishing brand positioning
Nike or Under Armour. lululemon can sell as much as $1,800 worth of • Planning and implementing brand marketing
product per square feet in its approximately 100 stores, three times • Measuring and interpreting brand performance
what established retailers Abercrombie & Fitch and J.Crew sell. After • Growing and sustaining brand value deals with brand
positioning.
coping with some inventory challenges, the company is looking to
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expand beyond yoga-inspired athletic apparel and accessories into The latter three topics are discussed in this chapter. Chapter 11
similar products in other sports such as running, swimming, and biking. 1 reviews important concepts dealing with competitive dynamics.

What Is Brand Equity?

Perhaps the most distinctive skill of professional marketers is their ability to create, maintain,
enhance, and protect brands. Established brands such as Mercedes, Sony, and Nike have commanded
a price premium and elicited deep customer loyalty through the years. Newer brands such as POM
Wonderful, SanDisk, and Zappos have captured the imagination of consumers and the interest of
the financial community alike.
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.” A brand is thus a product or service whose
dimensions differentiate it in some way from other products or services designed to satisfy the same
need. These differences may be functional, rational, or tangible—related to product performance of
the brand. They may also be more symbolic, emotional, or intangible—related to what the brand
represents or means in a more abstract sense.
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