DEVELOPING A BRAND EQUITY MEASUREMENT AND MANAGEMENT SYSTEM

Hunny Goyal (14) Nilay Thakkar (51) Parth Shah (44)

8.1

The Brand Value Chain

Broader perspective than just the CBBE model 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.

8.2

The Brand Value Chain

The brand value chain has several basic premises. Fundamentally, it assumes that the value of a brand ultimately resides with customers.

8.3

The Brand Value Chain

Based on this insight, the model next assumes that the brand value creation process begins when the firm invests in a marketing program targeting actual or potential customers. The marketing activity associated with the program then affects the customer mindset with respect to the brand what customers know and feel about the brand. This mindset, across a broad group of customers, then results in certain outcomes for the brand in terms of how it performs in the marketplace the collective impact of individual customer actions regarding how much and when they purchase, the price that they pay, and so forth. Finally, the investment community considers this market performance and other factors such as replacement cost and purchase price in acquisitions to arrive at an assessment of shareholder value in general and a value of the brand in particular.
8.4

The Brand Value Chain

The model also assumes that a number of linking factors intervene between these stages.

These linking factors determine the extent to which value created at one stage transfers or multiplies to the next stage.
Three sets of multipliers moderate the transfer between the marketing program and the subsequent three value stages: the program quality multiplier, the marketplace conditions multiplier, and the investor sentiment multiplier.

8.5

Brand Value Chain

VALUE STAGES

Marketing Program Investment

- Product - Communications - Trade - Employee - Other

Customer Mindset
- Awareness - Associations - Attitudes - Attachment - Activity

Market Performance
- Price premiums - Price elasticity - Market share - Expansion success - Cost structure - Profitability

Shareholder Value
- Stock price - P/E ratio - Market capitalization

FILTERS

Program Multiplier
- Clarity - Relevance - Distinctiveness - Consistency

Consumer Multiplier

Market Multiplier

- Channel support - Market dynamics - Consumer size and profile - Growth potential - Competitive reactions - Risk profile - Brand contribution

Value Stages

Marketing program investment

Any marketing program that can be attributed to brand value development

Customer mindset
In what way have customers been changed as a result of the marketing program?

Market performance
How do customers respond in the marketplace?

Shareholder value
8.7

Multipliers

Program quality multiplier

The ability of the marketing program to affect customer mindset Must be clear, relevant, distinct, and consistent

Customer multiplier
The extent to which value created in the minds of customers affects market performance It depends on factors such as competitive superiority, channel support, and customer size and profile

Market multiplier
The extent to which the value generated through brand market performance is manifested in shareholder value It depends on factors such as market dynamics, growth potential, risk profile, and brand contribution
8.8

Brand Equity Measurement System

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

8.9

Brand Equity Measurement System

Conducting brand audits Developing tracking procedures Designing a brand equity management system

8.1 0

Designing Brand Tracking Studies

Tracking studies involve information collected from consumers on a routine basis over time
Often done on a continuous basis

Provide descriptive and diagnostic information

8.1 1

What to Track
Customize tracking surveys to address the specific issues faced by the brand Product-brand tracking Corporate or family brand tracking Global tracking

8.1 2

How to Conduct Tracking Studies

Who to track (target market) When and where to track (how frequently) How to interpret brand tracking

8.1 3

Brand Equity Management System

A brand equity management system is a set of organizational processes designed to improve the understanding and use of the brand equity concept within a firm:
Brand equity charter Brand equity report Brand equity responsibilities

8.1 4

Brand Equity Charter

Provides general guidelines to marketing managers within the company as well as key marketing partners outside the company Should be updated annually

8.1 5

Brand Equity Charter Components

Define the firms view of the brand equity Describe the scope of the key brands Specify actual and desired equity for the brand Explain how brand equity is measured Suggest how brand equity should be measured Outline how marketing programs should be devised Specify the proper treatment for the brand in terms of trademark usage, packaging, and communication
8.1 6

Brand Equity Report

Assembles the results of the tracking survey and other relevant performance measures To be developed monthly, quarterly, or annually Provides descriptive information as to what is happening with the brand as well as diagnostic information on why it is happening

8.1 7

Brand Equity Report

In particular, one section of the report should summarize consumer perceptions on key attribute or benefit associations, preferences, and reported behavior as revealed by the tracking study. Another section of the report should include more descriptive market level information such as:

8.1 8

Brand Equity Report

1) Product shipments and movement through channels of distribution. 2) Relevant cost breakdowns. 3) Price and discount schedules where appropriate. 4) Sales and market share information broken down by relevant factors, e.g., geographic region, type of retail account or customer, etc. 5) Profit assessments.

8.1 9

Brand Equity Responsibilities

Organizational responsibilities and processes that aim to maximize long-term brand equity
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 a way that reflects the spirit of the charter and the substance of the report
8.2 0

Internal Branding

Internal brand management makes sure that employees and partners appreciate and understand basic branding notions and how these can affect the equity of the brands that they are working with. The ultimate goal is to make everyone in the organization, from the CEO to the trainees, to become passionate brand advocates. This can be achieved, according to Davis, by following a threestep course: Hear It, Believe It, Live It. To get employees to live the brand.

8.2 1

Brand Assimilation Process-Scott Davis

Principle 1: Make the Brand Relevant Principle 2: Make the Brand Accessible Principle 3: Reinforce the Brand Continuously Principle 4: Make Brand Education an Ongoing Program Principle 5: Reward On-Brand Behaviors Principle 6: Align Hiring Practices

8.2 2