CMA CMA Brand Management & Positioning 1 — Questions and Answers
Question 1: What is 'brand equity'?
- The added value a brand name gives to a product beyond its functional benefits (Correct answer)
- The total monetary worth of a company's physical assets
- The number of brand trademarks a company holds
- The percentage of revenue spent on brand advertising
Correct answer: The added value a brand name gives to a product beyond its functional benefits
Brand equity represents the premium value a brand adds to a product due to consumer perceptions, associations, and loyalty, above and beyond the product's functional value.
Question 2: David Aaker's Brand Equity Model identifies which five components of brand equity?
- Brand Loyalty, Brand Awareness, Perceived Quality, Brand Associations, Other Proprietary Assets (Correct answer)
- Brand Revenue, Market Share, Customer Satisfaction, Brand Reach, Brand Age
- Brand Recall, Brand Recognition, Brand Preference, Brand Insistence, Brand Rejection
- Product Quality, Pricing, Distribution, Promotion, People
Correct answer: Brand Loyalty, Brand Awareness, Perceived Quality, Brand Associations, Other Proprietary Assets
Aaker's model defines brand equity through brand loyalty, brand awareness, perceived quality, brand associations, and other proprietary brand assets like patents and trademarks.
Question 3: A 'brand extension' strategy involves:
- Using an established brand name to launch a product in a new category (Correct answer)
- Acquiring a competitor's brand to expand market share
- Extending the warranty period of an existing branded product
- Adding new features to an existing product under the same brand
Correct answer: Using an established brand name to launch a product in a new category
Brand extension leverages the equity of an established brand by applying it to a product in a new category, reducing launch risk by borrowing existing brand recognition.
Question 4: What is a 'brand promise'?
- The value and experience a brand commits to consistently deliver to its customers (Correct answer)
- A legal guarantee about product performance
- A marketing campaign tagline used in advertising
- A formal contract between a brand and its distributors
Correct answer: The value and experience a brand commits to consistently deliver to its customers
A brand promise is the commitment a brand makes to its customers about what they can consistently expect from every interaction with the brand.
Question 5: Which branding architecture strategy uses individual brand names for each product rather than a single corporate brand?
- House of Brands (Correct answer)
- Branded House
- Sub-branding
- Co-branding
Correct answer: House of Brands
A House of Brands strategy (used by Procter & Gamble) maintains separate brand identities for each product, insulating the parent company from any single brand's failures.
Question 6: Brand 'repositioning' is most commonly needed when:
- Consumer perceptions have shifted, new competitors have emerged, or the brand is declining in relevance (Correct answer)
- A company wants to increase production capacity
- A new CEO takes over internal leadership
- Distribution channels need to be expanded
Correct answer: Consumer perceptions have shifted, new competitors have emerged, or the brand is declining in relevance
Repositioning changes how a brand is perceived in consumers' minds, typically in response to market changes, competitive pressure, declining sales, or shifts in target audience.
CMA CMA Brand Management & Positioning 1
What is 'brand equity'?