brand evaluation systems

8/11/2019 Brand Evaluation Systems

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Brand Evaluation Systems


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Three Brand Measurement Strategies

Brand Equity brand assets (or liabilities)

linked to a brands name and symbol thatadd to (or subtract from) a product orservices*

Brand Valuation Assigning a dollar valueto the brand

The Brand Report Card

Brand Leadership, Aaker and Joachimsthaler


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Essentials of Brand Measurement

Use a consumer

response model

Use pretestsand posttests

Use multiplemeasures

Understand andimplement proper

research

Establishcommunications

objectivesBrand

Measurement


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Brand Equity Dimensions & Constructs

Awareness Perceived

Quality

Association/

Differen-tiation

Loyalty Market

Behavior

BrandAwareness

PerceivedQuality

PerceivedValue

PricePremium

MarketShare

Leadership Brand

Personality

Satisfaction Price Indices

OrganizationalAssociations

DistributionIndices

Aakers, David Measuring Brand Equity Across Products and Markets


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Brand Equity Assessment Criteria

Tap the full scope of brand equity

Focus on sustainable advantages not easilyduplicated by competitors

Reflect the constructs that truly drive the market;are associated with future sales & profits

Movement on a measure will move price levels, sales orprofits

Measures should be sensitive when equitychanges the measures reflect those changes

Applicable across brands, product categories &markets

Tested proven measures provide structure for developing aset of individual brand measures


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Brand Awareness

The level of brand recognition thatconsumers have of a particular brand andits specific product category

Reflects the salience of the brand

Awareness levels Recognition: Has heard of the brand

Recall: Brands that can be named

Top-of Mind: The first-named brand

Brand Dominance: The only brand recalled

Brand Knowledge: Knowing what the brandstands for

Brand Opinion: A value judgment of the brand


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Perceived Quality

Special associations that occur in many

contexts; empirically shown to affect ROI Associated with price elasticities and brand

usage

Associated with specific function benefitvariables

Measured as a scale in comparison toalternative brands

High vs. average vs. inferior

The best vs. one of the best vs. one of the worstvs. the worst

Consistent vs. inconsistent quality


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Brand Association - Value

Focuses on the brand value proposition

Brand value involves

a functional benefit

is usually basic to most brands in its class

Brand value can be measured by

Provides good value for the money

Whether there are reasons to buy a brand overcompetitors


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Brand Loyalty

A consumers commitment to repurchase orotherwise continue using the brand

When consumers like and consistently buy a

specific brand in a product category Creates a barrier to entry

Brand equitys core dimension


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Market Behavior Precautions

Market Share

Price/Distribution Indices


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After The Break

Divide into your teams Apply Aakers Brand Equity

Measurement System to Apple six

months after the antenna crisis (asyou best recall)

Provide an analysis for

each dimension and give yourrational for your directional score


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Pros and Cons of Brand Measurement

Measure the wrong things

Evaluate alternativestrategies

Avoid costly mistakes

Increase efficiency ingeneral

Disagreement onwhat to test

Research problems

Cost of measurement

Determine if objectives areachieved

Time

Advantages Disadvantages


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Brand Awareness Precautions

Awareness is not equally important acrosscategories

Recognition is important for new companies

Recall and top-of-mind important to mature

categories/companies On its own provides an incomplete picture


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Perceived Quality Precautions

Perceived quality involves a competitorframe of reference

Need to compare apples to apples sub-compacts vs. luxury brands

Segmentation issues perception variesacross customers vs. switchers vs.competitive loyalists

It may not be the key driver It may not be sensitive to relevant events


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Brand Loyalty Precautions

Defined with respect to only one set of

competitors

Might miss an emerging competitor or anemerging variable

Does not apply to non-customers Do not measure brand equity beyond the

customer base


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Market Behavior Precautions

Market Share More elements than brand go into market share

Often responsive to short-term strategies

Price/Distribution Indices

Different channels

Complex competitive set


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Where to From Here?

Develop a set of 4-8 constructs from thefive dimension

Establish a weighting system to

accommodate relative importance

Match the weighing system to perceived

values of the target market


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Kellers Brand Report Card

The simplest of the three Measuresbrand equity as a creative asset

Identifies 10 traits shared by strong

brands Grades performance of each trait

Objective is to identify

Areas for improvementStrengths


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Kellers 10 Brand Traits

Trait Definition Example

Superior CustomerBenefits

An attractive whole Starbucks Coffee BarCommunity

Relevant Tangible +Imagery +Feelings + Relations

Gillette Advance Razors

Price=Value(Perceived)

Quality, features, cost & price

P&G EDPMercedes

Proper Positioning Parity & Differentiation Harley Performanceplus image

Consistent Continuity + Freshness GEICO?

Rational Brand Portfolio Hierarchy creates equityvalue

GM: Chevy Buick -Cadillac

IMC Ads, web, events, pr Coke-a-Cola

Mgt. understands themeanings

Grasp the experience;holistic decisions

Bic=disposableBic For Men cologn?

Adequate Support Shell the 80s leader

Monitors Equity Sources Active audits & tracking Period Equity Reports


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Brand Valuation


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History

Driven by the increase in premium above stock

market values in 80s consumer companyacquisitions

Since the 1990s the need to establish a dollar

valuation for Intellectual Capital Assets has thedevelopment of valuation methodologies

These methods are nearing formal recognition by

the Financial Accounting Standards Board (FASB)

Headed for inclusion in the standard repertoire ofthe Generally Accepted Accounting Principles (GAA)


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Brand Valuation Today

The average brand accounts for more than1/3 of shareholder value

McDonalds brand accounts for more than70% of shareholder value

Coca-Cola brand accounts for 51% of theCoca-Cola Companys stock market price

Samsung spends 7.5% on R&D and 5% on

communications

BusinessWeek, Interbrand,/JP Morgan 2002


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Four Brand Valuation Approaches

Approach Strengths Weakness

Cost From an accounting/financial perspectiveComplies with standard acct.practicesIs conservative

Assumes the asset declinesin valueNot well-suited tointangible valuesOverlooks new brand

contributionsNo future replacement costallowance

Market What the brand could be soldforAddressed through market

capitalization (Market Cap Book Value = Brand valueAssumes future brandbenefits

Difficult to separate fromGoodwillOverly simplified


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Four Brand Valuation Approaches

Approach Strengths Weakness

Income Identifies Brand after-taxoperating incomeAssumes the brandsability to generate after taxincome

Premium price overunbranded competitors

Does not take intoaccount other IP (mgt.,patents, etc.)

Brand StrengthAssessment

The most comprehensiveWorks from a set offactorsMeasures future results

Includes an attitudevariable


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So Which is Better?

All have their strengths & weakness Increasingly, the trend is toward

Brand Strength Assessments because

of its comprehensiveness


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Brand Strength Assessment Approach

Assigns a financial value to brand equity.

Brand Value measures the current andfuture earnings due to the brand asset ofa company; the net present value ofexpected future earnings.


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Two Brand Valuation Methodologies

Customer BrandValuation

Focuses on customersas a the target

audiences A key role of brand

component is customersatisfaction

Shareholder BrandValuation

Focuses on theinvestment community

as the target market A key role of brand

component is shareprice

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