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: 260 Difficulty: Easy
2. The strategic brand 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: 260 Difficulty: Hard AACSB: Analytic Skills
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: 260 Difficulty: Medium AACSB: Analytic Skills
4. 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: 260 Difficulty: Medium AACSB: Analytic Skills
5. ________ 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: 263 Difficulty: Easy
6. Brand ________ is the added value endowed to products and services.
a. loyalty
b. equity
c. preference
d. satisfaction
e. benefits
Answer: b Page: 263 Difficulty: Medium
7. 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. customer-based brand equity
Answer: e Page: 263 Difficulty: Hard AACSB: Analytic Skills
8. ________ 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. Customer-based brand equity
c. Product-driven brand equity
d. Service-driven brand equity
e. Function-based brand equity
Answer: b Page: 263 Difficulty: Medium AACSB: Analytic Skills
9. If consumers do not demonstrate different responses to different brands within a
product category, then the products are essentially commodities or generic versions
and competition will probably be based on ________.
a. emotional attachment
b. brand awareness
c. advertising expenditure
d. price
e. prestige
Answer: d Page: 263 Difficulty: Hard AACSB: Reflective Thinking
10. 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: 241 Difficulty: Medium AACSB: Analytic Skills
11. The challenge for marketers in building a strong brand is ________.
a. ensuring that customers have the right type of experiences with products and their
marketing programs to create the desired brand knowledge
b. pricing the product at a point that maximizes sales volumes
c. minimizing the number of people to whom the product is targeted in order to
provide consumers with a personalized experience
d. retain as many customers as possible in order to minimize the costs and pressure
associated with continually generating new leads
e. maximizing customer value
Answer: a Page: 241 Difficulty: Hard AACSB: Analytic Skills
12. 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: 241 Difficulty: Medium AACSB: Reflective Thinking
13. ________ 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: 242 Difficulty: Medium AACSB: Reflective Thinking
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: 242 Difficulty: Hard AACSB: Analytic Skills
15. There are five 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: 243 Difficulty: Hard
16. Three pillars that point to the brand’s future value, rather than just reflecting its past,
are differentiation, energy, and relevance. Differentiation, energy, and relevance
combine to determine what is called brand ________.
a. position
b. image
c. depth
d. knowledge
e. strength
Answer: e Page: 243 Difficulty: Medium AACSB: Analytic Skills
17. 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
Answer: d Page: 243 Difficulty: Medium
18. David Aaker views brand equity as a set of three categories of brand assets and
liabilities linked to a brand that add or subtract from the value provided by a product
or service. They include all of the following EXCEPT ________.
a. brand loyalty
b. brand awareness
c. brand associations
d. brand price
e. None of the above is among Aaker’s three categories.
Answer: d Page: 244 Difficulty: Hard AACSB: Reflective Thinking
19. 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: 244 Difficulty: Medium AACSB: Analytic Skills
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: 244 Difficulty: Medium AACSB: Reflective Thinking
21. 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: 245 Difficulty: Medium AACSB: Reflective Thinking
22. 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: 245 Difficulty: Medium AACSB: Analytic Skills
23. 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
Answer: e Page: 245 Difficulty: Hard AACSB: Reflective Thinking
24. 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
Answer: c Page: 245 Difficulty: Medium AACSB: Reflective Thinking
25. ________ 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: 246 Difficulty: Medium AACSB: Analytic Skills
26. Six brand elements assist in brand building. Which of the following would NOT be
among those preferred brand elements?
a. Adaptable
b. Protectible
c. Memorable
d. Likable
e. Subliminal nature
Answer: e Page: 246 Difficulty: Medium AACSB: Reflective Thinking
27. 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: 246 Difficulty: Medium AACSB: Analytic Skills
28. Brand names are not the 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 Page: 246 Difficulty: Hard AACSB: Reflective Thinking
29. 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: 246 Difficulty: Medium AACSB: Analytic Skills
30. 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: 247 Difficulty: Medium
31. 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: 247 Difficulty: Hard AACSB: Use of IT
32. ________ is about making sure that the brand and its marketing are as relevant as
possible to as many customers as possible.
a. Personalizing marketing
b. Segmenting marketing
c. Brand imagery
d. Emotionalizing brands
e. Rationalizing brands
Answer: a Page: 247 Difficulty: Medium AACSB: Analytic Skills
33. 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. Personalizing marketing
b. Individualizing marketing
c. Globalizing marketing
d. Institutionalizing marketing
e. Integration marketing
Answer: e Page: 248 Difficulty: Medium AACSB: Analytic Skills
34. 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: 249 Difficulty: Medium AACSB: Reflective Thinking
35. 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. Mr. Thomas is most likely experiencing ________.
a. brand image
b. brand enhancement
c. brand belief
d. brand attitude
e. brand bonding
Answer: e Page: 249 Difficulty: Medium AACSB: Analytic Skills
36. Brand equity can be built by ________—linking the brand to other information in
memory that conveys meaning to customers.
a. internal marketing
b. brand bonding
c. secondary associations
d. customer alignment
e. brand auditing
Answer: c Page: 250 Difficulty: Medium
37. Which of the following is NOT a main secondary source of brand knowledge?
a. Other brands
b. People
c. Things
d. Local, state, and federal governments
e. Places
Answer: d Page: 250 Difficulty: Easy AACSB: Analytic Skills
38. Which of the following is one of the main ways to measure brand equity?
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: 251 Difficulty: Medium
39. 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: 251 Difficulty: Medium AACSB: Analytic Skills
40. ________ 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
Answer: e Page: 251 Difficulty: Medium
41. 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: 252 Difficulty: Medium AACSB: Analytic Skills
42. Competitive superiority and channel and other intermediary 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
Answer: b Page: 252 Difficulty: Hard
43. ________ is 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: 253 Difficulty: Medium AACSB: Analytic Skills
44. 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: 253 Difficulty: Easy AACSB: Reflective Thinking
45. The first step in the brand valuation process is ________.
a. the brand strength assessment
b. quantification of the role of branding
c. calculation of the net present value of the earnings forecast
d. the division of markets in which the brand is sold into mutually exclusive
customer segments
e. financial analysis of the company’s earnings before interest and taxes
Answer: d Page: 254 Difficulty: Medium AACSB: Analytic Skills
46. When a firm uses an established brand to introduce a new product, it is called
a________.
a. subbrand
b. brand value
c. brand extension
d. brand mix
e. brand posture
Answer: c Page: 256 Difficulty: Medium
47. A parent brand that is associated with multiple products through brand extensions can
also be called a ________.
a. category brand
b. subbrand
c. extension brand
d. family brand
e. line brand
Answer: d Page: 256 Difficulty: Easy AACSB: Analytic Skills
48. A ________ consists of all products—original as well as line and category extensions
—sold under a particular brand.
a. brand line
b. brand variant
c. brand mix
d. licensed product
e. subbrand
Answer: a Page: 257 Difficulty: Medium AACSB: Analytic Skills
49. A major advantage of a(n) ________ strategy is that the company does not tie its
reputation to the product.
a. blanket family name
b. licensing
c. individual-names
d. category extension
e. brand revitalization
Answer: c Page: 257 Difficulty: Medium AACSB: Reflective Thinking
50. 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. individual-names strategies
d. brand audits
e. brand dilutions
Answer: b Page: 258 Difficulty: Medium AACSB: Reflective Thinking
51. 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, and soups, 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: 259 Difficulty: Hard AACSB: Analytic Skills
52. 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
offerings—in effect ________ the parent brand.
a. diluting
b. cannibalizing
c. reinforcing
d. eroding
e. feeding back to
Answer: b Page: 260 Difficulty: Medium
53. 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: 261 Difficulty: Medium AACSB: Analytic Skills
54. Marketers introduce multiple brands in a category for all of the following reasons
EXCEPT ________.
a. to increase shelf presence and retailer dependence in the store
b. to attract consumers seeking variety who may otherwise have switched brands
c. to increase internal competition within the firm
d. to yield economies of scale in advertising, sales, and merchandising
e. to reduce manufacturing costs and complexity
Answer: e Page: 261 Difficulty: Medium AACSB: Analytic Skills
55. 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. maximal brand overlap
d. the eventual reduction of brand differentiation to create a unified brand
appearance
e. none of the above
Answer: a Page: 262 Difficulty: Medium
56. ________ 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: 262 Difficulty: Medium AACSB: Analytic Skills
57. The role of a ________ 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. cash cow
b. flanker brand
c. fighting brand
d. high-end prestige brand
e. low-end entry-level brand
Answer: e Page: 262 Difficulty: Medium AACSB: Reflective Thinking
58. 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 value
d. customer equity
e. brand extension
Answer: d Page: 263 Difficulty: Medium AACSB: Analytic Skills
59. According to Scott Bedbury’s book, A New Brand World, all of the following are
considered to be important principles for 21st-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: 263 Difficulty: Hard AACSB: Reflective Thinking
108. Marketers of successful 21st-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: 260 Difficulty: Medium AACSB: Analytic Skills
109. 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: 263 Difficulty: Hard AACSB: Reflective Thinking
110. During the Pepsi Challenge campaign, launched while Coke was clearly the
market leader by sales, consumers were given blind taste tests of Pepsi and Coke
and asked which flavor they preferred. Apparently, people preferred the taste of
Pepsi in blind taste tests, but bought Coke when they visited the store. This is an
example of Coke’s ________.
a. customer-based brand equity
b. mission-driven brand equity
c. functional-based brand equity
d. service-based brand equity
e. attribute-based brand equity
Answer: a Page: 268 Difficulty: Hard AACSB: Analytic Skills
111. 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: 266 Difficulty: Medium AACSB: Reflective Thinking
112. Apple Computer achieves incredible brand loyalty largely by delivering on its
________ to “create great things that change people’s lives” by combining
superior design functionality and style in its products.
a. brand promise
b. brand dynamic
c. brand resonance
d. brand entity
e. umbrella branding
Answer: a Page: 269 Difficulty: Hard AACSB: Analytic Skills
113. 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: 269 Difficulty: Medium AACSB: Analytic Skills
114. Matt always thinks of Varta batteries when he thinks of a dependable car battery.
This is an example of brand ________.
a. salience
b. imagery
c. judgments
d. feelings
e. scope
Answer: a Page: 270 Difficulty: Medium
115. 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. bond
c. visual
d. personification
e. perception
Answer: a Page: 270 Difficulty: Medium AACSB: Analytic Skills
116. Although initially an online book seller, Amazon.com chose not to call itself
“Books ‘R’ Us,” enabling it eventually to sell a wide range of products. This
naming decision makes the brand element more ________.
a. memorable
b. meaningful
c. likable
d. protectible
e. transferable
Answer: e Page: 274 Difficulty: Medium AACSB: Analytic Skills
117. The face of Betty Crocker has been updated several times in the past 75 years
without losing any of its brand recognition. This brand element is ________.
f. likeable
g. transferable
h. adaptable
i. protectible
j. memorable
Answer: c Page: 274 Difficulty: Medium
118. Marketers of Mountain Dew created the multicity Dew Action Sports Tour where
athletes compete in skateboarding, MBX, and freestyle motocross events to
establish a meaningful ________ with its 12–24-year-old target market.
a. brand element
b. brand contact
c. internal brand
d. brand salience
e. brand asset
Answer: b Page: 277 Difficulty: Hard AACSB: Analytic Skills
119. 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: 277 Difficulty: Medium AACSB: Analytic Skills
120. If the Singapore Airlines sends employees to special classes to teach them the
value of the brand and how inflight service is much more than just flying from
origin to destination, Singapore Airlines is using ________ to accomplish this
task.
a. interruption marketing
b. loyalty marketing
c. cohort marketing
d. macrobranding
e. internal branding
Answer: e Page: 279 Difficulty: Medium AACSB: Reflective Thinking
121. IBM’s e-business campaign not only helped to change public perceptions of the
company in the marketplace, it also sent a signal to employees that IBM was
determined to be a leader in the use of Internet technology. This is an example of
________.
a. leveraging secondary associations
b. linking internal and external marketing
c. integration marketing
d. permission marketing
e. brand tracking
Answer: b Page: 280 Difficulty: Medium
122. Irene and Dave Wong are part of a long-term ________. The Wong’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. brand-tracking study
Answer: e Page: 281 Difficulty: Medium AACSB: Analytic Skills
123. Meiji has introduced several types of yogurt ________ through the years—Nata
de Coco, All Tropical Fruit, and Berry Blends.
a. category extensions
b. line extensions
c. brand extensions
d. subbrands
e. family brands
Answer: b Page: 287 Difficulty: Medium AACSB: Analytic Skills
124. Customers can now buy McClaren strollers and apparel, which are not
manufactured by McClaren, but are instances where McClaren has received
payment from the manufacturers of these products to use McClaren’s brand name.
These items are considered ________.
a. licensed products
b. family products
c. line extensions
d. brand extensions
e. subbrands
Answer: a Page: 287 Difficulty: Medium
125. Many firms use ________ in order to take advantage of corporate-image
associations such as innovativeness, expertise, and trustworthiness to directly
influence consumer evaluations.
a. separate family names for all products
b. individual names for each product
c. blanket family names
d. brand revitalization
e. the brand discount rate
Answer: c Page: 288 Difficulty: Hard AACSB: Reflective Thinking
126. Four general strategies can be used in branding. Which of the following strategies
is the one used by Kellogg’s when it follows a subbranding 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: 288 Difficulty: Medium
Short Answer
127. 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: 260 Difficulty: Hard AACSB: Analytic Skills
128. 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: 260 Difficulty: Easy
129. What valuable functions can brands perform for the firm?
Suggested Answer: Brands simplify product handling and tracing and help to
organize inventory and accounting records. They also offer the firm legal
protection for unique features or aspects of the product. 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 can also
translate into customer willingness to pay higher prices.
Page: 261 Difficulty: Medium AACSB: Reflective Thinking
130. 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: 263 Difficulty: Easy AACSB: Reflective Thinking
131. 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: 263-264 Difficulty: Medium
132. List five advantages shared by other strong brands that you will most likely need
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; (7) more
elastic consumer response to price decreases; (8) greater trade cooperation and
support; (9) increased marketing communications effectiveness; (10) possible
licensing opportunities; and, (11) additional brand extension opportunities.
Students are to pick five advantages.
Page: 264 Difficulty: Hard AACSB: Reflective Thinking
133. How does consumer knowledge play a role in the success of new products
associated with existing brands?
Suggested 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.
Page: 264 Difficulty: Hard AACSB: Reflective Thinking
134. Brand equity has five components—differentiation, energy, relevance, esteem,
and knowledge. How are these components combined to produce brand strength
and brand stature?
Suggested Answer: Differentiation, energy, and relevance combine to produce
brand strength. Esteem and knowledge together create brand stature.
Page: 267 Difficulty: Medium AACSB: Analytic Skills
135. 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.
Pages: 268 Difficulty: Medium
136. 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 need 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: 274-275 Difficulty: Medium AACSB: Reflective Thinking
137. What is permission marketing and why does it work?
Suggested Answer: Permission marketing, the practice of marketing to
consumers only after gaining their express permission, is based on the premise
that marketers can no longer use “interruption marketing” via mass-media
campaigns. It is purported to work because it is “anticipated, personal, and
relevant.”
Page: 277 Difficulty: Medium AACSB: Reflective Thinking
138. Distinguish between brand identity and brand image.
Suggested Answer: Identity is the way a company aims to identify or position
itself or its product. Image is the way the public actually perceives them.
Page: 278 Difficulty: Medium AACSB: Analytic Skills
139. Identify the three important principles for internal branding presented in the text.
Suggested Answer: Three important principles for internal branding are: (1)
choose the right moment; (2) link internal and external marketing; and (3) bring
the brand alive for employees.
Page: 279 Difficulty: Medium AACSB: Analytic Skills
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.
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: 281 Difficulty: Easy AACSB: Analytic Skills
141. 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: 282 Difficulty: Medium AACSB: Analytic Skills
142. 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 is the job of
estimating the total financial value of the brand.
Page: 283 Difficulty: Easy AACSB: Reflective Thinking
143. Identify and define the two general categories into which brand extensions fall.
Suggested Answer: Brand extensions fall into two general categories: (1) line
extensions, where the parent covers a new product within a category it currently
serves; and (2) category extensions, where the parent brand is used to enter a
different product category from the one it currently serves.
Page: 286 Difficulty: Easy AACSB: Analytic Skills
144. 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: 287 Difficulty: Medium AACSB: Reflective Thinking
145. Tide laundry detergent maintains the same market share it had 50 years ago
because of the sales contributions of its various line extensions. Tide could be
said to employ a preemptive cannibalization strategy in generating line
extensions. What does this mean?
Suggested Answer: In preemptive cannibalization, consumers might have
switched to a competing brand instead of the line extension if the extension hadn’t
been introduced. 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.
Page: 291 Difficulty: Hard AACSB: Analytic Skills
146. Scott Bedbury, author of A New Brand World, cites eight principles on which
21st-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 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 four of the eight. See
chapter section for additional discussion.
Page: 294 Difficulty: Hard AACSB: Analytic Skills
