CPM Brand Equity & Positioning Models 3 — Questions and Answers
Question 1: A brand extension transfers equity from the parent brand to a new product. The greatest risk of a brand extension is:
- Increased brand awareness for the parent
- Brand dilution if the extension fails or is too distant from the core (Correct answer)
- Higher distribution costs for the new product
- Reduced advertising spend on the parent brand
Correct answer: Brand dilution if the extension fails or is too distant from the core
If an extension fails or strays too far from the parent brand's associations, it can weaken or dilute the parent brand's equity.
Question 2: The 'perceptual map' tool in brand positioning is primarily used to:
- Track brand financial value over time
- Visualize how consumers perceive competing brands on key attributes (Correct answer)
- Map the geographic distribution of brand awareness
- Measure internal employee brand perception
Correct answer: Visualize how consumers perceive competing brands on key attributes
A perceptual map plots brands in a two-dimensional space based on consumer perception scores on two key attributes, revealing competitive gaps and opportunities.
Question 3: Which Interbrand valuation component measures how strongly the brand influences customer choice in its category?
- Brand Presence
- Role of Brand (Correct answer)
- Brand Strength
- Brand Earnings
Correct answer: Role of Brand
Interbrand's 'Role of Brand' index estimates what fraction of the purchase decision can be attributed to the brand versus other factors like price or feature set.
Question 4: A company launches a premium sub-brand (e.g., Honda → Acura) primarily to:
- Reduce manufacturing costs through shared platforms
- Avoid diluting the parent brand while capturing a new segment (Correct answer)
- Comply with regulatory requirements in the luxury segment
- Transfer distribution agreements from the parent
Correct answer: Avoid diluting the parent brand while capturing a new segment
Sub-brands like Acura allow the parent to enter a new price tier or segment without risking the positioning or associations of the core brand.
Question 5: In brand equity measurement, 'brand knowledge' is defined by Keller as comprising:
- Brand awareness and brand image (Correct answer)
- Brand loyalty and brand associations
- Brand salience and brand resonance
- Brand performance and brand feelings
Correct answer: Brand awareness and brand image
Keller defines brand knowledge as the combination of brand awareness (recognition/recall) and brand image (the network of associations in consumer memory).
Question 6: When a marketer uses a 'ladder of benefits' in positioning, what is the highest rung?
- Functional benefits
- Product attributes
- Emotional and self-expressive benefits (Correct answer)
- Price-value benefits
Correct answer: Emotional and self-expressive benefits
The benefit ladder moves from attributes → functional benefits → emotional benefits, with self-expressive benefits at the top representing personal identity values.
Question 7: Which metric is most directly used to assess 'brand loyalty' as a component of brand equity?
- Unaided brand recall percentage
- Customer retention rate and repeat purchase frequency (Correct answer)
- Net Promoter Score minus competitor NPS
- Share of voice in advertising
Correct answer: Customer retention rate and repeat purchase frequency
Customer retention rate and repeat purchase frequency directly measure behavioral loyalty, a core dimension of brand equity models like Aaker's.
CPM Brand Equity & Positioning Models 3
A brand extension transfers equity from the parent brand to a new product.
The greatest risk of a brand extension is: