3.equity measurement & management system
DESCRIPTION
Equity managementTRANSCRIPT
CBBE model provides guidance as to how brand equity can be measured.
Customer-based brand equity is the differential effect that knowledge about brand has on a customer response to the marketing activities or programs of the brand.
Two basic approaches to measure brand equity:◦ Indirect approach: Assess potential sources of
customer-based brand equity by identifying and tracking customers’ brand knowledge structures.
◦ Direct Approach: By assessing the actual impact of brand knowledge on consumer response to different elements of marketing program.
How to think about brand equity measurement & management?
A brand equity measurement system is a set of research procedures that is designed to provide timely, accurate, and actionable information for marketers so that they can make the best possible tactical decisions in the short run and strategic decisions in the long-run.
Crucial for developing of such a system, one has to understand how brand equity or value gets created.
The brand value chain is a means to trace the value creation process to better understand the financial impact of marketing expenditures & investments.
The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value.
It has some basic premises. It assumes that:◦ The brand value creation process begins when the
firm invests in a marketing program targeting actual or potential customers.
◦ The marketing activities associated with the program then affects the customer mindset.
◦ The mindset then results in certain outcomes for the brand in terms of how it performs in the marketplace.
◦ Finally, investment community considers this market performance to arrive at an assessment of shareholder value in general & a value of the brand in particular.
The model also assumes that a number of linking factors intervene between these stages.
These factors determine the extent to which value created at one stage transfers or multiplies to the next stage.
Marketing
Program
Investment
Customer
Mindset
Market
Performance
Shareholder
Value
VALUE
STAGES
- Product
- Communications
- Trade
- Other
- Awareness
- Associations
- Attitudes
- Attachment
- Activity
- Price premiums
- Price elasticities
- Market share
- Expansion success
- Cost savings
- Profitability
- Stock price
- P/E ratio
- Market capitalization
Brand Value Chain
Program
Quality
Marketing
Program
Investment
Customer
Mindset
Market
Performance
Shareholder
ValueVALUE
STAGES
- Product
- Communications
- Trade
- Employee
- Other
- Awareness
- Associations
- Attitudes
- Attachment
- Activity
- Price premiums
- Price elasticities
- Market share
- Expansion success
- Cost structure
- Profitability
- Stock price
- P/E ratio
- Market capitalization
Marketplace
ConditionsMULTIPLIER
- Clarity
- Relevance
- Distinctiveness
- Consistency
- Channel support
- Consumer size & profile
- Competitive reactions
- Market dynamics
- Growth potential
- Risk profile
- Brand contribution
Investor
Sentiment
Implementing this system involves:◦ Conducting brand audits. Brand Inventory
Brand Exploratory
◦ Developing tracking procedures.
◦ Designing a brand equity management system Brand Equity Charters
Brand Equity Reports
Brand Equity Overseers
A brand audit is a comprehensive examination of a brand involving activities to assess the health of the brand, uncover its sources of equity and suggest ways to improve and leverage that equity.
A brand audit requires understanding sources of brand equity from the perspective of both the firm and the consumer.
Specifically, the brand audit consists of two activities:◦ Brand Inventory◦ Brand Exploratory
The purpose of the brand inventory is to provide a complete, up-to-date profile of how all the products and services sold by a company are marketed and branded.
For each product, the relevant brand elements must be identified, as well as the supporting marketing program. This information should be summarized both visually and verbally.
Although primarily a descriptive exercise, some useful analysis can be conducted.
The brand exploratory is research activity designed to identify potential sources of brand equity.
The brand exploratory provides detailed information as to what consumers think of and feel about the brand.
Although reviewing past studies and interviewing relevant personnel provides some insights, additional research is often required.
To allow a broad range of issues to be covered and also permit those issues to be pursued in-depth, qualitative research techniques are often employed first.
To provide a more specific assessment of the sources of brand equity, a follow-up quantitative phase is often necessary.
Tracking studies involve information collected from consumers on a routine basis over time
◦ Often done on a “continuous” basis
◦ Provide descriptive and diagnostic information
◦ Key decisions
What to track – all sources based on CBBE Model
Who to track – current customers/loyal/ loyal to other brands/ nonusers/light or heavy user etc.
When and where to track - frequency
How to interpret tracking studies – level of cut-off: awareness, how positive is the feelings, actual sources of
equity etc.
1. Formalize company position and philosophy into a Brand Equity Charter to provide relevant guidelines to marketing managers.
- Importance of brands and brand equity
- History of brand
- Brand positioning- Core brand values
- Core brand promise (“brand mantra”)
- POP/POD
- Brand guidelines- Strategic
- Tactical
2.Assemble results of tracking survey and other relevant outcome measures into a Brand Equity Report distributed to managers on regular basis
◦ Provides descriptive information as to what is happening with a brand as well as diagnostic information as to why it is happening.
3. Brand Equity Responsibilities: Establish position of VP or Director of Equity Management to oversee implementation of Brand Equity Charter and Reports
◦ Ensure that, as much as possible, marketing of the brand is done in way that reflects the spirit of the Charter and the substance of the Report
Can Submit within one day after the end-term
Can submit through mail to [email protected]
Assignment:
Find out any real national or international brand measurement done by any agency for any product/services/b-school category
Study the method of brand equity measurement in terms of◦ qualitative or quantitative techniques/methods used
different factors/parameters and its weightages, scales used, questionnaire used etc.
◦ Advantage or criticism of the methods
FAR BETTER AN APPROXIMATE ANSWER TO THE RIGHT QUESTION, WHICH IS OFTEN VAGUE, THAN AN EXACT ANSWER TO THE WRONG QUESTION, WHICH CAN ALWAYS BE MADE PRECISE.
- JOHN TUKEY, STATISTICIAN
Brand equity
measurement
system
Brand equity
sources
Brand equity
outcomes
Brand equity
measurement
system
Brand equity
sources
Brand equity
outcomes
Research
Procedure
Qualitative
Methods
Quantitative
Methods
Sources…◦ Brand awareness
◦ Brand attitudes
◦ Brand image
◦ Brand attachments
◦ Etc.
Outcomes◦ Price elasticity
◦ Brand choice
◦ Preference
◦ Sales
◦ Share value etc.
Free association◦ What comes in the mind when they think of the brand.
Projective Techniques◦ Uncover the opinions and feelings of consumers
(a) Completion and interpretation task
Incomplete or ambigious stimuli to elicit consumer thoughts and feelings – pictures, cartoons, stories, converstaions etc.
(b)Comparison Tasks
Compare brands to people, countries, animals, activities, fabrics, occupations, cars, magazines, vegetables etc.
Zaltman metaphor Elicitation Technique (ZMET)◦ Consumers have subconscious motives
Word construct – abstartion to capture common ideas, concepts or themes
Brand Personalities◦ Human characteristics or traits
◦ Big Five:
Sincerity (down to earth…)
Excitement (daring, spirited…)
Competence (reliable,…)
Sophisticated (uperclass, charming…)
Ruggedness (outdoorsy and tough)
Experiment Methods◦ Watch the consumers behaviours at their home, work
place etc.
Brand awareness◦ Recognition
◦ Recall
Brand image◦ Beliefs
Strength
Favorability
Uniqueness
◦ Multidimensional scaling (MDS)
Assessing the resulting value in some way
Measurement procedures to assess the effects of brand knowledge structures
Measures that capture market peformance of the brand
Outcomes
measurement
Comparative
methods
Holistic
methods
Comparative methods◦ Brand-based comparative
◦ Marketing based comparative
◦ Conjoint analysis
Holistic methods◦ Residual approaches – based on physical
attributes only
◦ Valuation approaches
Historical perspectives
General approaches
Cost approach
Market approach
Income approach