Branding s10 ch8&9 moghimi brand equity measurement ug

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”

What is Customer Equity?


B.Moghimi@yahoo.co.uk

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
–

4

The more loyal the firms profitable customer, The
higher the firm’s customer equity

Customer Equity


5

The Customer/Brand Challenge


In this difficult environment, marketers must have a
keen understanding of:
–
–


–

6

customers
brands
the relationship between the two

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.


–

7

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.

How Brands Are Built
Four Primary Aspects
• The culmination of brand building efforts;
acquisition of consumer experience

Knowledge

• Consumer respect, regard, reputation; a
fulfillment of perceived consumer promise

Esteem

• Relates to usage and subsumes the five Ps of
marketing; relates to sale

Relevance

• The basis for consumer choice; the essence of
the brand, source of margin

Differentiation

9.8

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.


9

Keller's Brand Value Chain


10

Customer-Based Brand Equity




11

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

Building


Brand knowledge structures depend on . . .

12

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

Benefits of





13




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.

as 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.


14



Customer-based brand equity provides direction and focus
to future marketing activities

Strategic Brand Management

16

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)
2)
3)
4)

Identifying and establishing brand positioning and values
Planning and implementing brand marketing programs
Measuring and interpreting brand performance
Growing and sustaining brand equity

Strategic Brand Management Process
STEPS

KEY CONCEPTS

Identify and Establish
Brand Positioning and Values

Mental maps
Competitive frame of reference
Points-of-parity and points-of-difference
Core brand values
Brand mantra

Plan and Implement
Brand Marketing Programs

Mixing and matching of brand elements
Integrating brand marketing activities
Leveraging of secondary associations

Measure and Interpret
Brand Performance

Grow and Sustain
Brand Equity
17

Brand Value Chain
Brand audits
Brand tracking
Brand equity management system
Brand-product matrix
Brand portfolios and hierarchies
Brand expansion strategies
Brand reinforcement and revitalization

What to Track for Branding Measurement





18





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

How to Track for Branding Measurement

20

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 tracking

Quantitative Research Techniques
Awareness





Image



Brand responses



Brand relationships

9.21

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

9.22

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.
9.23

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.

9.24

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
–
–
–
–

25

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)

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
9.26



Brand dynamics



Equity engines



Young & Rubicam’s Brand Asset Valuator (BAV)

9.27


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
9.28

Equity engines


29

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

Young & Rubicam’s Brand Asset Valuator (BAV)

30

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

Qualitative Research Techniques
1. Free Association
2. Projective Technique

31

3. Ethnographic and Observational Approaches

Qualitative … “Free Association“


32

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.”)

Qualitative … “Projective Technique“




33

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.

Qualitative …
“Ethnographic and Observational Approaches“



34



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.

Branding s10 ch8&9 moghimi brand equity measurement ug

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