Managing brand equity

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Frame of reference

This chapter provides an overview of relevant theories applied in this thesis in order to later analyze the empirical findings. It is structured in the way that brands and brand equity is described in general before going deeper into branding in sports. The frame of reference is concluded with a table overview of the most important concepts con-nected to each of the four research questions.

Brands

A brand is a company asset, most often in form of a name, a word, a symbol, a drawing or a combination of these elements, which intention is to communicate and identify the meaning that differentiates the products and/or services of a company and distinguishes them from competitors (Fredrick & Patil, 2010; Couvelaere & Richelieu, 2005; Keller & Lehmann, 2006). Further Schilhaneck (2008) states that a brand is a picture of a product or service anchored in the minds of the consumer resulting from both direct (purchase, usage,) and indirect (advertis-ing, promotion) experiences with the brand. Finally Ind (1997) makes the distinction between a product and a brand saying that a product is something that is produced in a factory but a brand is what the customer buys and further that a product can be copied while a brand is unique.
Through its brand, a firm creates and manages customer expectations (Aaker, 1991). This means that a brand can be what makes a customer choose one product or service over the oth-er. Further Couvelaere and Richelieu (2005) claim that successful brands have the ability to cre-ate strong relationships with customers on both a personal and emotional level. It is the result of these relationships that turn into value for companies as customers develop trust in the brand and ideally become loyal customers (De Chernatony, 2001). Couvelaere and Richelieu (2005) explain how a brand becomes a promise a company makes to its customers, and this promise is built on the consistency of the brands message and performance of its product or services.

Brand equity

Keller (2009) states that brand equity and the crucial intangible value a brand brings to organiza-tions is perhaps one of the most important marketing topics discussed in recent years. The con-cept of brand equity has been argued for both by accounting and marketing perspectives but commonly both disciplines highlight the importance of having a long-term focus within brand management (Kotler, 2008). From the financial perspective, brand equity has been defined as the incremental cash flow resulting from a product with a brand name versus the cash flow of the product without the brand name (Ross, Russell & Bang, 2008). From a marketing perspec-tive brand equity has been described as the associations and beliefs a consumer has about a brand, also referred to as “consumer brand equity” (Feldwick, 1996). It is the “consumer brand equity” perspective that will be applied in this thesis. Aaker (1996) defines brand equity as a set of assets and liabilities that add or subtract value from the value provided by a company’s prod-uct or services. Aaker (1996) group these assets and liabilities into four categories that Aaker (1996) claims to be what brand equity consist of. These categories are brand loyalty, perceived quality, brand awareness and brand associations and will be discussed further shortly. Keller (1993) presented somewhat a similar definition claiming that brand equity exists when the con-sumer is familiar with the brand and perceives an added (or subtracted) value towards certain brands. With high brand equity, meaning that customer perceive this “added value” of buying a certain brand, comes several advantages for a firm. Favorable brand equity can increase the probability of brand choice, customer retention, profit margin, willingness to pay premium price, marketing effectiveness, positive word of mouth and brand extensions (Aaker, 1991; Aaker 1996; Keller, 1993). Furthermore high brand equity can strengthen the firm against competitors and generally enhance customer loyalty (Aaker, 1996). Even though the benefits and concept of brand equity are generally accepted to be important for firms, the approach to how it is created is often disputed (Ross, 2006).

Managing brand equity

Previously discussed where how Aaker (1991) defined brand equity as the assets or liabilities linked to a brands name or symbol that add or subtract value from the product or service. Aaker and Joachimsthaler (2001) illustrated this approach to brand equity (Figure 1) with four components as displayed below. These four categorizes have been generally accepted and used by numerous researchers (Keller, 1993; Kapferer, 2008; De Chernatony, 2001) in their approach and in relation to brand equity.
Aaker (1996) did not suggest a specific measure for brand equity but instead argued that the four components directly could create brand equity. The four components are described as fol-lows:
Brand awareness: describes consumers’ capability to under different conditions identify a brand (Schilhaneck, 2008). Brand awareness are claimed to affect both perception and taste be-cause consumers prefer what is known to them and tend to assign numerous positive attitudes to these familiar items (Aaker, 1991).
Perceived Quality: is more product related and Aaker (1996) states that perceived quality is a consumers judgment of products overall functionality and superiority relative to its intentional purpose. The perceived quality component will in this thesis not be emphasized as much as the other three components. Since sport is considered more of a service (Ross, 2006; Schilhaneck, 2008) than a product, and as customers perceived service quality is to a much greater extent subjective depending on different individual expectations and prior experience this component is much harder to assess and determine for services than for products (Grönroos, 1990). The service characteristics of sports will be discussed later.
Brand associations: are anything linked in consumers memory to a brand (Ross, 2006). In-cluded are all those thoughts and mental pictures that come to the consumers mind when he/she recalls a brand (Ross, 2006; Aaker & Joachimsthaler, 2001).
Brand Loyalty: is achieved when consumers have a positive attitude towards a brand and re-peatedly purchase and demand it (Schilhaneck, 2008, Aaker, 1991, Amine, 1998). Amine (1998) however recommends companies not only to settle by repeat purchase customers but also con-sider the motives behind the loyalty in order to be prepared and aware of what makes the brand strong/weak and how to always be able to improve.
This general model is explained to give an overview of how consumer brand equity can be ex-plained and will be applied for further use and explanation of the development of a strong brand in sport later in the thesis. As mentioned, particularly the three components of brand awareness, brand associations and brand loyalty will be of further use, and the product related component of perceived quality will not be included to the same extent.

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Branding in sports

We have now introduced some of the key concepts in branding and brand building for companies. However in or-der to discuss branding within sports the theoretical concepts also have to be adapted to this setting. In the follow-ing the challenges of branding in sports and characteristics of sports will be provided. Finally two models for how to create and manage brands in sports will be discussed.

Branding challenges in the sport club setting

As mentioned earlier brands very much exist in the minds of the customers, making the man-agement of brands challenging (Schilhaneck, 2008). To make this even more difficult, the sport club setting is characterized by a number of challenges particular to this field.

Heterogeneous customer groups

There are a number of heterogeneous customer groups with different backgrounds and prefer-ences that sport teams have to take into account (Gladden, Milne & Sutton, 1998; Schilhaneck, 2008). A crucial challenge for sports teams can be the spectator base being very complex con-sisting of men, women and children with different backgrounds and ideas of what they want to see and experience during a sporting event (Schilhaneck, 2008). However sport teams also have other key audience groups a part from the direct fans (regular spectators). Sponsors/VIPs, me-dia and the municipality can be such groups, all with potentially different interests that the club have to have in mind when trying to shape the image of their brand (Schilhaneck, 2008; Glad-den & Funk, 2002).

Service quality & characteristics

The sporting event is characterized by a number of unique service characteristics being short lived, intangible, the outcome hard to control and also subjective in the eyes of the fans. Differ-ent customer groups have different expectations and this is a particular challenge for sport ser-vices (Grönroos, 2007). All these factors contribute to the complexity of branding in the sport club setting (Gladden, Milne & Sutton, 1998; Couvelaere & Richelieu, 2005). The sporting event itself (the game) is produced and consumed at the same time, customers are not left with any-thing other than the experience of watching the game (Schilhaneck, 2008) and the game be-comes a significant part of the service delivery process (Ross, 2006). In branding of products, customers are left with a tangible product that represents the brand (Aaker, 1991). Consequent-ly, when sports being more like a service, substitute methods of branding have to be identified to overcome these discussed challenges. A consistent level of quality is said to be a condition for a successful brand (Grönroos, 1990). Problems arise for all service firms in maintaining a consistent level of quality in their services due to the interaction and involvement of the cus-tomer in the service process, the unpredictability and diverse customer expectations and the re-liance on employees to maintain a consistent level of quality throughout each service encounter (Grönroos, 2007).

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On-field performance

People like to associate themselves with a winning team and to have a high performance team with a winning record can certainly help sport organizations to leverage their brand. This is es-pecially true if teams do not yet have a winning history to look back on and is in the beginning of creating both a strong team and brand (Richelieu, 2003). However Schilhaneck (2008) points to team performance also as a particular challenge in the branding process for sport clubs and that the quality of the product (team production) and the uncontrollable factor of the opposing team can make team performance an obstacle to building a strong brand. Couvelaere & Riche-lieu (2005) underlines that a minimum of team success actually is a prerequisite for sports teams to maintain in order for them to expect fans to associate themselves with the team and brand. Further, for teams to expect that fans will help promote the club and moreover for the club to have the foundation to build a successful brand a certain winning record is required (Couvelaere Richelieu, 2005). Field performance is an underlying dimension in sports and to capture loyal fans to a loosing team is a difficult task (Ross, 2006). People are less likely to associate them-selves, get social approval and self-esteem by identifying themselves with a poor performance team. Still the success of a sport club does not mean that teams have to win every game to reach a high level of emotional and loyal commitment from fans, but should parallel to the quest for success on the field attempt to establish external values in the minds of customers (Richelieu, 2003). In times of struggle, regarding field performance, external values will help to keep fans loyal and committed (Couvelaere & Richelieu, 2005). These types of external values will be thoroughly discussed when approaches for how sports teams can build brands will be discussed later.

Finances and management

Financial stability is one of the keys to be able to properly adopt a brand strategy that teams wish to implement (Couvelaere & Richelieu, 2005). Without a stable economy teams often have more than enough working out financial issues and this draws attention away from developing the brand, as much as it obstructs the actual possibilities to allocate resources to brand and marketing efforts (Richelieu, 2003). Further Schilhaneck (2008) mentions the competence of management as a potential challenge to for example gaining contact and achieving sponsorship. Sponsorship is one crucial activity for sports teams as it can add significantly to the revenues of sports organizations (Speed & Thompson, 2000). According to Speed and Thompson (2000) companies willing to involve themselves in sponsorship often look for status of the sponsored event/team or often events/teams they have a personal liking to. In order for teams to gain sponsorship they should therefore look for companies with a personal interest in the sport or team and try to create an experience that attracts companies. Schilhaneck (2008) adds to the discussion by saying that the reputation and network of skilled and experienced managers can help overcome insecurity for companies to involve themselves in sponsorship. On the other hand inexperienced managers could increase the uncertainty and the perceived risk for potential sponsors. Of course the skills of management is important also for a number of different rea-sons. To handle financial management, marketing, strategic decision-making etc. are all im-portant aspects that requires a certain amount of skill and experience amongst managers (Schilhaneck, 2008).

1 Introduction 
1.1 Background
1.2 Field of study: Ice hockey in Sweden
1.3 Problem discussion
1.4 Purpose
1.5 Research questions
1.6 Delimitations
1.7 Disposition
2 Frame of reference 
2.1 Brands
2.2 Brand equity
2.3 Managing brand equity
2.4 Branding in sports
2.5 Branding challenges in the sport club setting
2.6 Sport teams & brand equity
2.7 Building sport teams brand equity – a framework
2.8 Defining the identity of the sports team
2.9 Positioning the sports team in the market
2.10 Developing the brand strategy
3 Method 
3.1 Research philosophy
3.2 Research approach
3.3 Research design
3.4 Qualitative approach
3.5 Primary Data
3.6 Secondary data
3.7 Sampling
3.8 Interview Guide
3.9 Interviews
3.10 Research quality .
3.11 Data Analysis
4 Empirical findings 
4.1 Brand identity
4.2 Positioning
4.3 Challenges to building and strengthen the brand
4.4 Factor to exploit
5 Analysis .
5.1 Brand identity
5.2 Positioning
5.3 Challenges
Conclusions
7 Discussion
7.1 Further research
List of references
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