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Brand Value Chain MKT 465: Ch 3 part 2

Brand Value Chain is the Structured approach to assessing the source and outcome of Brand Equity and the manner by which marketing activities create Brand Value.

This model helps to understand the ROI on investment.Brand Value Chain is the means to trace the value creation process for brands to better understand financial impacts of brand marketing investments and expenditures: As in Where and How value is created and where to look to improve that process

Value Stages:

Marketing Program Investment: 8Ps Customer Mind Set: knowledge and feelingsMarket Performance: as a reflection to the mind setShareholder Value: based on the market performance

Number of linking factors/Multiplier intervene between these stages and determine the extent to which value created at one stage transfers to the next stage

1. Marketing Program Investment:

Marketing Mix (8 ps) related strategies that can contribute to Brand Value development.

Product DevelopmentCommunications: toolsRnDResearch etc

Quality but Quantity (investment amount) of these Progs play the major role.

Program Quality Multiplier

The ability of the Marketing Progs to affect the Mind set (stage2) depends on its Quality.

Quality Judgment Criteria: DRIVEDistinctiveness : Uniqueness, Creativeness, Differentiating factors of the progs Relevance: meaningful/relevant to cus Integrated: ability to create an impact. Integration with present n past progs Value: ST or LT profitability or Equity Excellence: standard/ state of the art

2: Customer Mind Set: with respect to a brand

Mind Set includes: Thoughts, Feelings, Experiences, Images, Perceptions, Beliefs and Attitudes. Marketing Prog can have an affect on these Measures of Mind Set: 5 As Brand Awareness: extent and ease to which customers Recall and Recognize Brand Association: Strengths, Favorability and Uniqueness of perceived attributes and benefits: key source of Brand Value as they are the means by which customers feel brand satisfy their NWDs Brand Attitudes: evaluation of the brand in terms of quality and the satisfaction it generates. Brand Attachments: loyalty, attachment/adherence level, high brand resonance, strong relationshipBrand Activities: frequency of use, spread WOM, seek, engaged with the brand.

Marketplace Conditions Multipliers:

The extend to which value created in the minds of customers affects Market Performance depends on 3 factors:

Competitive Superiority: How Effective are the marketing progs of the Competitors? Channel and Other Intermediary support: Reinforcement and Selling Efforts by MICustomer Size and Profile: Number and Type of customers attracted to the brand

3. Market Performance: 6 indicators

Price Premiums : how much extra the consumers are willing to pay comparing to competitionsPrice Elasticity : demand increase/ decrease due to price fall or risesMarket Share: number of customers/ sales volExpansion Success: supporting lines/category expansions Cost Structure: reduced as the mind set is already done. Profitability: increased profitability due to the mentioned five

ANOKHI

Investor Sentiment Multiplier

Brand Valuation is done based on

Market Dynamics: interest rates, supply of capital etcGrowth Potentials: PLC , GR, PEST Risk Profile: Vulnerability factor of the Brand Brand Contribution: SBU wise Strategic Position within company portfolio

4. Shareholder Value

Based on all available current and forecasted info, the financial market place formulates opinions and assessments that have very direct financial implications for the brand value.

Indicators:Share Price Price/ Earning MultipleMarket Capitalization

Implications:

Value creation begins with the marketing prog investment: Well Funded, Well Designed and Well Implemented Marketing Progs are needed.

Value Creation means ensuring that Value Transfers from one stage to another. Uncontrollable, unfavorable circumstances might lead to failure

Value Creation is measurable.