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brand equity measurement
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Strategic Branding – Part 1
Developing a Brand Equity Measurement System
Measuring Sources of Brand Equity
Professor: Bahman Moghimi
Doctor of Business Administration
M.Sc. Of “Industrial Marketing & e-Commerce”
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B.M
oghimi@
yahoo.co.uk
What is Customer Equity?
The ultimate aim of customer relationship management is to produce high customer equity that is combined discounted customer lifetime values of all the company’s current & potential customers
– The more loyal the firms profitable customer, The higher the firm’s customer equity
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B.M
oghimi@
yahoo.co.uk
The Customer/Brand Challenge
In this difficult environment, marketers must have a keen understanding of:– customers– brands– the relationship between the two
B.M
oghimi@
yahoo.co.uk
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The Concept of Brand Equity
The brand equity concept stresses the importance of the brand in marketing strategies.
Brand equity is defined in terms of the marketing effects uniquely attributable to the brand.– Brand equity relates to the fact that different outcomes
result in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name.
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oghimi@
yahoo.co.uk
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Four Primary AspectsFour Primary Aspects
How Brands Are Built
KnowledgeKnowledge
EsteemEsteem
RelevanceRelevance
DifferentiationDifferentiation
• The culmination of brand building efforts; acquisition of consumer experience
• Consumer respect, regard, reputation; afulfillment of perceived consumer promise
• Relates to usage and subsumes the five Ps of marketing; relates to sale
• The basis for consumer choice; the essence of the brand, source of margin
Keller's Brand Value Chain
The Brand Value Chain(BVC) is a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value.
• Step I- Firm invests in a marketing program targeting actual or potential customers• Step II- The associated marketing activity then affects the customer mind-set• Step III- This produces the brand’s performance in the marketplace – how much
and when customers purchase, the price that they pay and so forth.• Step IV- The investors considers this market performance and other factors to
arrive at an assessment of shareholder value in general and a value of the brand.
Customer-Based Brand Equity
Customer-based brand equity– Differential effect– Customer brand knowledge– Customer response to brand marketing
Determinants
• Customer is aware of and familiar with the brand
• Customer holds some strong, favorable, and unique brand associations in memory
B.M
oghimi@
yahoo.co.uk
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Building Customer-Based Brand Equity
Brand knowledge structures depend on . . .– The initial choices for the brand elements
– The supporting marketing program and the manner by which the brand is integrated into it
– Other associations indirectly transferred to the brand by linking it to some other entities
B.M
oghimi@
yahoo.co.uk
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Benefits of Customer-Based Brand Equity
Enjoy greater brand loyalty, usage, and affinity Command larger price premiums Receive greater trade cooperation & support Increase marketing communication effectiveness Yield licensing opportunities Support brand extensions.
B.M
oghimi@
yahoo.co.uk
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Customer-Based Brand Equityas a “Bridge”
Customer-based brand equity represents the “added value”
endowed to a product as a result of past investments in the
marketing of a brand.
Customer-based brand equity provides direction and focus
to future marketing activities
B.M
oghimi@
yahoo.co.uk
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Strategic Brand Management
Strategic brand management involves the design and implementation of marketing programs and activities to build, measure, and manage brand equity.
The strategic brand management process is defined as involving four main steps:1) Identifying and establishing brand positioning and values2) Planning and implementing brand marketing programs3) Measuring and interpreting brand performance4) Growing and sustaining brand equity
B.M
oghimi@
yahoo.co.uk
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Strategic Brand Management Process
Mental mapsCompetitive frame of referencePoints-of-parity and points-of-differenceCore brand valuesBrand mantra
Mixing and matching of brand elementsIntegrating brand marketing activitiesLeveraging of secondary associations
Brand Value ChainBrand auditsBrand trackingBrand equity management system
Brand-product matrixBrand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalization
KEY CONCEPTSSTEPS
Grow and SustainBrand Equity
Identify and EstablishBrand Positioning and Values
Plan and Implement Brand Marketing Programs
Measure and InterpretBrand Performance
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What to Track for Branding Measurement
Awareness: both recall and recognition measures should be collected.
Usage: this can be measured through recency, frequency of usage, and total spending in the brand, and product category.
Brand Attitudes and Perceptions: Product and non-product associations, as well as those related to price and value are important sources of brand equity and should be part of brand tracking studies.
Purchase intent: measures of likelihood to buy a brand or switch to a competitor are also indicators of brand health and should be part of brand tracking
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B.M
oghimi@
yahoo.co.uk
How to Track for Branding Measurement
Frequency of product purchase: for example durable goods with long purchase cycles can be tracked less frequently.
Marketing activity in the product category: a category where brands are constantly launching marketing programs and promotions should be monitor more often.
Level of competition in product category: highly competitive product categories, where new products and competitors are constantly trying to break in, should be tracked regularly.
Stability of brand associations: brands with an established image that don't show appreciable changes over time, can afford a less frequent brand tracking20
B.M
oghimi@
yahoo.co.uk
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Quantitative Research Techniques
Awareness
Image
Brand responses
Brand relationships
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oghimi@
yahoo.co.uk
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Brand Awareness
Recognition– Ability of consumers to identify the brand (and its
elements) under various circumstances Recall
– Ability of consumers to retrieve the actual brand elements from memory when given some related probe or cue
– Unaided vs. aided recall
B.M
oghimi@
yahoo.co.uk
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Awareness
Corrections for guessing – Any research measure must consider the issue of consumers
making up responses or guessing. Strategic implications
– The advantage of aided recall measures is that they yield insight into how brand knowledge is organized in memory and what kind of cues or reminders may be necessary for consumers to be able to retrieve the brand from memory.
– The important point to note is that the category structure that exists in consumers’ minds—as reflected by brand recall performance—can have profound implications for consumer choice and marketing strategy.
B.M
oghimi@
yahoo.co.uk
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Image
Ask open-ended questions to tap into the strength, favorability, and uniqueness of brand associations.
These associations should be rated on scales for quantitative analysis.
B.M
oghimi@
yahoo.co.uk
Brand Responses
Research in psychology suggests that purchase intentions are most likely to be predictive of actual purchase when there is correspondence between the two in the following categories:
Purchase Intentions– Action (buying for own use or to give as a gift)– Target (specific type of product and brand)– Context (in what type of store based on what prices and
other conditions)– Time (within a week, month, or year)
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B.M
oghimi@
yahoo.co.uk
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Brand Relationships
Behavioral loyalty Brand substitutability : Longman and Moran view
repeat rate – how many people who bought a particular brand last time would buy it again this time- as the key indicator of brand equity
Other brand resonance dimensions– For example, in terms of engagement, measures could
explore word-of-mouth behavior, online behavior, and so forth in depth
B.M
oghimi@
yahoo.co.uk
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Brand Dynamics
The Brand Dynamics model adopts a hierarchical approach to determine the strength of relationship a consumer has with a brand.
The five levels of the model are:– Presence– Relevance – Performance– Advantage– Bonding
B.M
oghimi@
yahoo.co.uk
Equity engines
This model delineates three key dimensions of brand affinity [the emotional and intangible benefits of a brand] as follows:
Authority: The reputation of a brand, whether as a longstanding leader or as a pioneer in innovation
Identification: The closeness customers feel for a brand and how well they feel the brand matches their personal Needs
Approval: The way a brand fits into the wider social matrix and the intangible status it holds for experts and friends
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B.M
oghimi@
yahoo.co.uk
Young & Rubicam’s Brand Asset Valuator (BAV)
There are five key components of brand health in BAV
Each pillar is derived from various measures that relate to different aspects of consumers’ brand perceptions and that together trace the progression of a brand’s development.– Differentiation– Energy– Relevance– Esteem– Knowledge
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B.M
oghimi@
yahoo.co.uk
Qualitative Research Techniques
1. Free Association
2. Projective Technique
3. Ethnographic and Observational Approaches
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oghimi@
yahoo.co.uk
Qualitative … “Free Association“
This technique involves free association tasks whereby subjects are asked what comes to mind when they think of the brand without any more specific probe or cue than perhaps the associated product category (e.g. “what does the Rolex name mean to you?” or “Tell me what comes to mind when you think of Rolex watches.”)
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B.M
oghimi@
yahoo.co.uk
Uncovering the sources of brand equity requires that consumers’ brand knowledge structures be profiled as accurately and completely as possible. Unfortunately, under certain situations, consumers may feel that it would be socially unacceptable or undesirable to express their true feelings.
Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express themselves on these matters.
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B.M
oghimi@
yahoo.co.uk
Qualitative … “Projective Technique“
Fresh data can be gathered by directly observing relative actors and settings. Consumers can be unobtrusively observed as they shop or as they consume products to capture every shade of their behavior.
Marketers such as Procter & Gamble seek consumers’ permission to spend time with them in their homes to see how they actually use and experience products.
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B.M
oghimi@
yahoo.co.uk
Qualitative … “Ethnographic and Observational Approaches“
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