Measuring Brand Equity

Defining Brand Equity

What is the final definition of Brand Equity?
*Brand equity has been defined as the differential effect that
consumer brand knowledge has on their response to brand
marketing activity

Methods of evaluating BE
*Measuring Sources of Brand Equity
*Qualitative Research Techniques
*Free Association
*Projective Technique
*Completion & interpretation tasks
*Comparison tasks.
*Brand Personality and Relationships
*Ethnographic and Observational Approaches
*Quantitative Research Techniques
*Awareness
*Recognition
*Recall
*Image
–
*Specific, Lower-level Brand Associations
*Brand Performance
*Primary characteristics & supplementary features
*Product reliability, durability, & serviceability
*Service effectiveness, efficiency, and empathy
*Style and design
*Price
*Brand Imagery
*User profiles
*Purchase situations
*Usage situations
*Personality and values
*History, heritage, and experiences

–
*General, Higher-order Brand Associations
*Brand Judgments
*Brand quality
*Brand credibility
*Brand consideration
*Brand superiority
*Brand Feelings
*Warmth
*Fun
*Excitement
*Security
 *Social approval
*Self-respect

•
*Measuring outcomes of Brand Equity
*Comparative Approach
*Brand-based Comparative Approaches
*Marketing-based Comparative Approaches
*Conjoint Analysis
*Holistic Approach :
*Residual Approach
*Valuation Approach
*Cost Approach
*Market Approach
*Income Approach
*Interbrand Methodology

Methods of evaluating BE
Absolutebrand.
AC Nielsen: Brand Balance Sheet and Brand Performance.
AUS Consultants.
BBDO.
Brandient.
Brandeconomics.
Brand Finance.
Brandmetrics.
Consor.
Damodaran’s Valuation Model.
Financial World.
Futurebrand.
GFK - PWC -Sattler: Advanced Brand Valuation Model.
Herp’s Model.
Hirose Model (2002).
Houlihan Advisors.
Icon Brand Navigation’s Brand Rating.
Intangible Business.

Interbrand.
Kern’s X-Times Model.
Baruch Lev’S Intangibles Scoreboard.
Millward Brown Optimor.
Motameni and Shahrokhi’s Global Brand Equity Valuation Model.
Prophet.
System Repenn.
Sander’s Hedonic Brand Valuation Method.
Sattler’s Model.
Semion.
Simon and Sullivan’s Stock Price Movements Model.
Villafañe & Associates’ Competitive Equilibrium Model.
Trout & Partners.

Measuring Sources of Brand Equity

 Qualitative Research Techniques
Free Association

Free Association
*To find out about brand association
*Tell me what comes to mind when think of little hearts biscuits?
Free Association
*Direct follow-up questions to test uniqueness
1) What do you like best about the brand?
What are its positive aspects?
What do you dislike?
What are its disadvantages?

2) What do you find unique about the brand?

How is it different from other brands?
In what ways is it the same?

These simple, direct measures can be extremely valuable at determining core

aspects of a brand image
Free Association
*Laddering techniques or means-ends chain analysis
*Attributes (descriptive features that characterize a product) lead to
à benefits (the personal value and meaning attached to product
attributes) which, in turn, lead to à values (stable and enduring
personal goals or motivations).
Free Association
*A consumer chooses a product that: 1) delivers attribute (A) that 2)
provides benefits or has certain consequences (B/C) that 3)
satisfies values (V).
*For example, in a study of salty-snacks, one respondent noted that a
flavored chip (A) with a strong taste (A) would mean that she
would eat less (B/C), not get fat (B/C), and have a better figure
(B/C), all of which would enhance her self esteem (V).

*Laddering looks for implications of attribute or benefit for the

customer by asking “why” type of questions
Projective Technique
Completion & interpretation tasks
Comparison tasks.

Projective Technique
When researching
*Consumers sometimes don’t give correct answers – especially
express social or personal feelings
*Give answers acceptable or expected by interviewer
*Example – Why did people buy LCD TV ?
*Better picture
*Flatness
*Space saving
*Very few say social status
Projective Technique
*Projective techniques are diagnostic tools to uncover the true
opinions and feelings of consumers.
Projective Technique
*Completion & interpretation tasks
*“Bubble exercises" based on cartoons or photos where different
people are depicted buying or using certain products, services, or
brands
*Consumers are then asked to figuratively "fill in the bubble" by
indicating what they believed was happening or being said in the
scene.

Projective Technique
*Comparison tasks
*comparing brands to people, countries, animals, activities, fabrics,
occupations, cars, magazines, vegetables, nationalities, or even
other brands.
Projective Technique
*Comparison tasks
*Looking at the people depicted in the pictures on the next slide,
which ones do you think would be most likely to wear Nike shoes?"

Quantitative Research Techniques

Awareness
Recognition
Recall
Image

Awareness
*Brand awareness is related to the strength of the brand in memory
*Consumers' ability to identify various brand elements (i.e., the brand
name, logo, symbol, character, packaging, and slogan) under
different conditions.
*Different situations – Research says
*Customer decisions at POP then brand recognition – brand name, logo,
packaging important
*Customer decision away from shop à Brand element not present à Brand
Recall more important
Recognition
*Identification of any of the brand elements
*1) Measure recognition - Show a set of single items visually or orally
and asks them if they thought that they had previously seen or
heard these items
*2) Add decoys that customer could not have seen
*3) Brand element may be visually masked or distorted in some way
or shown for extremely brief duration

Recall
*Consumers must retrieve the actual brand element from memory
*One possible sequence of aided recall might use progressively
narrowly defined cues -- such as product class, product category,
and product type labels . Example :
*"When you think of chocolate, which brands come to mind?
*"If you were thinking of having a cold drink, which brands will come
to mind?“
*For Diwali which brand of clothes will you buy?
Image
*Measure the meaning or image of the brand
*Image = Associations
Specific, Lower-level Brand Associations
*Brand Performance
*Primary characteristics & supplementary features
 *What is the level of satisfaction derived from product operation?
*Product reliability, durability, & serviceability
*Reliability : consistency of performance over time
*Durability : expected economic life of the product
*Serviceability : ease of servicing the product if it needs repair
*Service effectiveness, efficiency, and empathy
*Service effectiveness : how completely the brand satisfies customers’ service requirements
*Service efficiency : speed, responsiveness of these services.
*Service empathy : service providers are seen as trusting, caring, and with customer’s
interests in mind.
*Style and design
*size, shape, materials, color, sounds or smells
*Price
*Status of product : Premium or Common
Specific, Lower-level Brand Associations
*Brand Imagery
*User profiles
*The type of person or organization (B2B) who uses the brand
*Purchase situations
*In which type of store the brand is available – Premium, General
*Usage situations
*At what time of day or Location the brand may be used
*Kellogg's for breakfast and Scorpio for off-road location
*Personality and values
*What kind of personality does the brand have?
*History, heritage, and experiences
*Heritage - like oldWines - Indage Reserve, Chantilli, Riviera
*History – Lifebuoy
*Experience – Nivea Cream v/s Pond Winter care lotion
General, Higher-order Brand Associations
*Brand Judgments
*Brand quality
*Quality pertain to perception of satisfaction
*Brand credibility
*company making the product is seen as being:
*1) Competent, innovative, and a market leader (brand expertise);
*2) Dependable and keeping customer interests in mind (brand trustworthiness);
*and 3) Fun, interesting, and worth spending time with (brand likeability).
*Brand consideration
*Brand lies in the consideration set of customers
*Brand superiority
*Customers view the brand as unique and offering better advantage than other brands

General, Higher-order Brand Associations

*Brand Feelings
*Warmth
*brand makes consumers feel a sense of calm or peacefulness, sentimental, warmhearted, or
affectionate about the brand
*Dabur Chyvanprash, Hajmola, Moov, Taj mahal Tea
*Fun
*brand makes consumers feel amused, light-hearted, joyous, playful, cheerful – Disney
*Excitement
*brand makes consumers feel energized, upbeat, cool - MTV

Measuring outcomes of Brand Equity

Comparative
*Self Reports
*Dollarmetric Scales
*Conjoint Analysis
Holistic
*Interbrand’s evaluation

Self Reports
Measuring Brand Equity
*Self-reports
*Overall brand evaluation (also known as attitude toward the
brand):
*What do you think of ___?
*Unappealing 1 2 3 4 5 6 7 Appealing
*Low-quality 1 2 3 4 5 6 7 High-quality
*Unpleasant 1 2 3 4 5 6 7 Pleasant

Measuring Brand Equity

*Purchase behavior:
*I am extremely loyal to ________
*Disagree 1 2 3 4 5 6 7 Agree

*I buy _________
*At every purchase occasion ----from time to time ---never
*(check most appropriate answer)
Dollarmetric Scale:
*Conventional scales--often used to assess willingness to pay for a
product (1-7 scale)
*limited information and value. Should a “6”be counted as a likely
buyer or only 7s?
*Alternative scale is to put responses in dollar or other currency
terms.
*The following example analyzes a dollarmetric scale for soft drinks.
*How much more (or less) would you pay for a Coke than a Dr Pepper?

Dollarmetric Scale:
*What should be the relative prices of the four brands?
*–Respondent first chooses which of two brands he or she prefers
*Next, the respondent indicates in Rupees (and paise) how much
extra she would be willing to pay to get a unit of the preferred
brand.
*Analyze the data by summing the differences, positive and negative,
between each brand compared to each of the others.
Dollarmetric Scale:
Dollarmetric Example: One Respondent

*Pair of Brands Willing to Pay Extra Amount

(more preferred in yellow) in Rupees
*Coke, Pepsi 2
*Coke, 7 Up 5
*Coke, Frooti 6
*Coke, Real juice 7
*Pepsi, 7 Up 6
*Pepsi, Frooti 3
*Pepsi, Real juice 8
*7Up, Frooti 5
*7Up, Real juice 4
*Frooti, Real juice 2
Dollarmetric Scale:
Dollarmetric Example: One Respondent
*Coke (2+5+6+7) 20
*Pepsi (-2+6+3+8) 15
*Frooti (-6 -3-5+2) -12
*7 Up (-5 + -6 +5+4) -2
*Real Juice (-7-8-4-2) -21

Conjoint Analysis
*Conjoint Analysis tries to understand how people make choices
between products or services
*So that businesses can design new products or services that better
meet customers’ underlying needs.
Conjoint Analysis
*Academics were looking to understand how people made decisions.
*People tend to say what was top-of-mind, or what they thought the
interviewers wanted to hear
*Untrue results of research
*Far better results (Choice-based conjoint question)
Conjoint Analysis
*All choices involve compromises and trade-offs as the ideal is rarely
attainable

*Buying a car
*Average, price, spaciousness, looks

*Prediction of what people will choose now possible

Conjoint Analysis
*Product should be described in terms of attributes and levels

*An attribute is a general feature of a product or service – say size,

colour, speed, delivery time.

*Each attribute is then made up of specific levels.

*So for the attribute colour, levels might be red, green, blue and so
on.
Conjoint Analysis
*Mobile Phone
*Attributes – Talktime, Screen, Camera, 3G
*Levels –
*Apple I phone : 5 hours, 480 x 320 px, 3 MPx, 3G
*Samsung star 3G: 3 hours, 240x320, 3.2 Mpx, 3G
* Nokia N97 : 8hours, 640 x 360, 5 Mpx, 3G

Conjoint Analysis
Would you choose phone A or phone B?
Talktime, Screen, Camera, Price
A 6 hours 320 x 240 2 MPx 15000
B 2 hours 480 x 240 3 Mpx 20000

Phone A has higher TT, smaller screen, smaller camera but is

cheaper than phone B
*Talktime versus larger screen and camera
Conjoint Analysis
*How valuable each of the levels is relative to the others around it –
this value is known as the utility of the level.
*At the end of the conjoint exercise we can plot the utility for each of
the levels on a graph.
Conjoint Analysis
Ours Theirs
*Talktime 6 (50) 2 (20)
*Screen 320x240 (30) 480x240 (40)
*Camera 2 (40) 3 (50)
*Price 15000 (20) 20000 (10)
Total Utility 140 120

*Competition could either increase talktime or reduce price to

increase their utility
*Cost impact of investing money in developing higher talktime or
reducing profit margin
Conjoint Analysis and Brand Equity
*In the above example if we introduce names then we can see weight
age can change

Conjoint Analysis
Ours Theirs
*Talktime 6 (50) 2 (20)
*Screen 320x240 (30) 480x240 (40)
*Camera 2 (40) 3 (50)
*Price 15000 (20) 20000 (10)
*Company Nokia (70) SE (30)
Total Utility 210 150

The change is weightage is due to equity of brand

Factors List
*Bluetooth,
*Colour Screen,
*3G,
*GPRS,
*Java enabled,
*MMS enabled,
*MP3 Player,
*Polyphonic ringtones,
*Streaming video,
*USB,
*Vibration
*Camera : Autofocus, Video Recording, Resolution
*Internet
*FM
*Weight
*Size
*Screen Size
*Color
*GPS
*Accessories
*Battery
*Headphones
*OS
*Security
*Tri band/ Quad Band

Conjoint Analysis
Example 2
Conjoint Analysis:Notebook Computers
Assume 3 attributes of laptop computer choice:

*–Weight (2 Kg or 3.5 Kg)

*–Brand (Compaq or Acer)
*–Size of hard disk (120 GB or 200 GB)

Conjoint Analysis
Task: Rank order the following combinations from 1=Most Preferred
to 8=Least Preferred
*2 Kg, Compaq, 200 GB 1
*2 Kg, Acer, 200 GB 2
*2 Kg, Compaq, 120 GB 3
*2 Kg, Acer, 120 GB 4
*3.5 Kg, Compaq, 200 GB 5
*3.5 Kg, Acer, 200 GB 6
*3.5 Kg, Compaq, 120 GB 7
*3.5 Kg, Acer, 120 GB 8
Conjoint Analysis
Least Preferred : 3.5 Kg, Acer, 120 GB
Most Preferred : 2 Kg, Compaq, 200 GB

Trade-offs --Average rank for the

*2 Kg option : (1+2+3+4 / 4) 2.5
*3.5 Kg option: (5+6+7+8 / 4) 6.5
*Acer : (2+4+ 6+8/4) 5.0
*Compaq: (1+3+5+7/4) 4.0
*120 GB : (3+4+7+8/4) 5.5
*200 GB : (1+2+5+6/4) 3.5

Conjoint Analysis
Most important characteristics (looking at differences in average
ranks):
*Weight (6.5 -2.5 = 4)
*Hard Drive (5.5-3.5= 2)
*Brand (5.0-4.0= 1)

Conjoint Analysis
Conjoint Analysis:
Notebook Computers (lower is better)
Attribute Level Utility

Weight 2 Kg 2.5
3.5 Kg 6.5
Hard Drive 120 GB 5.5
200 GB 3.5
Brand Acer 5.0
Compaq 4.0

Holistic – Valuation Approach

Interbrand Evaluation

Interbrand follows a methodology that is largely based on an income approach,

the factors are
Interbrand Evaluation
Financial Analysis
*We begin by forecasting the current and future revenue specifically
attributable to the branded products.
*We subtract operating costs from this revenue to calculate branded
operating profit.
*We then apply a charge to the branded profit that is based on the
capital a business spends, versus the money it makes.