enhancing brand equity and accountability

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Enhancing Brand Equity and

Accountability

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter Objectives

After reading this chapter you should be able to:1. Explain the concept of brand equity from both the

company’s and the customer’s perspectives.2. What are some of the positive outcomes that result

from enhancing brand equity?3. Describe the different models of brand equity from

the customer’s perspective.4. Understand how marcom efforts must influence

behavior and achieve financial accountability.


Are There Too Many Social Media Brands?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Which Brand Is “Best”?(Measures are important!)

1. Harris Interactive Poll (2400 adults)• “Which three brands do you consider to be the best?”• [2007 – Coca-Cola, Sony, Toyota]

2. Harris Interactive Brand Equity (EquiTrend) Study (25,000 adults)• Familiarity, quality, purchase considerations, brand expectations, distinctiveness,

trust• [2008 – Heinz, M&Ms, Hershey’s; 2010 – Target, Nintendo, M&Ms]

3. Interbrand’s “Best Global Brands”• Brand sales as a % of total company sales• Earnings (profits) for a brand• NPV of the brand earnings, discounted by interest rates, risk, market leadership,

stability and global reach• [2007 – Coca-Cola, Microsoft, IBM; 2010 – IMB #2]

4. Young & Rubicam’s Brand Asset Valuator (200,000 adults)• Brand strength: differentiation, relevance• Brand stature: esteem, knowledge 4


Brand Defined

Brand

A name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of

sellers and to differentiate them from those of the competition.

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Definition of Brand Equity

Brand Equity

the goodwill (equity) that an established brand has built

up over its existence.

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As Brand Equity Increases…

• A higher market share is achieved• Brand loyalty increases • Premium prices can be charged • The brand earns a revenue premium

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Revenue Premium

•The revenue differential between a branded item and a corresponding private-labeled item.

Revenue premium= (volumeb)(priceb)-(volumepl)(pricepl)


Children’s Taste Preferences

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Young & Rubicam’s “Brand Asset Valuator” and Creating Strong Brands

• Methodology: • Interviews with over 200,000 consumers• 40 countries• 19,000 brands• 40 measurement scales

• “DREK” sequence (measures of brand equity):

• differentiation -> relevance -> esteem -> knowledge• Power Grid:

• brand strength (differentiation, relevance)• brand stature (esteem, knowledge)

• Brand Development Cycle10


Figure 2.1: Power Grid and Brand Development Cycle

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Figure: 2.2: A Customer-Based Perspective on Brand Equity

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Figure 2.3: Brands and Their Management

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The Brand Concept and Brand Concept Management• Brand concept: the specific meaning that brand

managers create and communicate to the target market.• this is accomplished by appeals to functional, symbolic,

and experiential needs• Brand concept management: the analysis, planning,

implementation, and control of a brand concept throughout the life of a brand.

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How Brand Concepts Can Be Developed

• Functional needs (solving problems): products that attempt to fulfill the consumer’s consumption-related problems

• Symbolic needs (associating the brand with symbolic objects): directed at consumers’ desire for self-enhancement, role position, group membership, and belongingness

• Experiential needs (sensory pleasures, personal experience): products that provide sensory pleasure, variety, and/or cognitive stimulation.

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Dimensions of Brand Personalities

•Sincerity (e.g., Disney)

•Excitement (e.g., Hummer)

•Competence (e.g., Toyota)

•Sophistication (e.g., Rolex, Cartier)

•Ruggedness (e.g., Timberland boots)

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Illustration of a Sincere Brand--Disney


Illustration of a Sophisticated Brand


Illustration of a Rugged Brand

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Three General Ways Brand Equity is Enhanced

•Allow brand to speak-for-itself•Create message-driven associations•Leveraging current meanings or

associations

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Figure 2.5: Leveraging Brand Meaning from Various Sources

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Co-branding and Ingredient Branding

• Co-branding• A partnership between two brands

• Ingredient branding• Inclusion of one brand within the other

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What Benefits Result from Enhancing Brand Equity?

•Increased consumer loyalty•Long-term growth and profitability for

the brand•Maintain brand differentiation from

competitive offerings•Insulate brand from price competition

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Measuring World-Class Brands

Quality Salience Equity

Evaluating World-Class Brands

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Measuring World-Class Brands

• Quality: score ranging from 0 to 10 (unacceptable/ poor to outstanding/ extraordinary)

• Salience: score ranging from 0 to 100 (percentage of people who feel sufficiently well informed about a brand to rate it)

• Equity: score ranging from 0 to 100 (determined by multiplying the quality and salience scores and dividing the product by 10)

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Equitrend’s Top-Ten World-Class Brands Overall (2009)

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Interbrand’s Top 20 Global Brands (2010)

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Affecting Behavior and Achieving Marcom Accountability

•Creating brand awareness and boosting brand image serve little positive effect unless individuals make purchases or engage in some other form of desired behavior.

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ROMI

•The effect of marcom, or of its specific elements such as advertising, can be gauged in terms of whether it generates a reasonable revenue return on the marcom investment.

•In marketing, return on investment is called return on marketing investment (ROMI)

•(In accounting, ROI = net income/avg. O.E.)

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Difficulty of Measuring Marcom Effectiveness

• Choosing a Metric• Gaining Agreement • Collecting Accurate Data • Calibrating Special Effects

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Choosing a Metric

•Change in brand awareness •Improved consumer attitude toward the

brand •Increased purchase intentions •Larger sales volume (e.g., via scanner

data; marketing mix models)

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Gaining Agreement

Finance Departments’ Measures of Success:

• Discounted cash flows • Net present values of

investment decisions

Marketing Departments’

Measures of Success:

• Measures of brand awareness, image, equity, sales, …

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Collecting Accurate Data and Calibrating Special Effects •What exact sales figures should be used

to calculate sales?•How much relative effect does each

program element have on sales volume compared to the effect of other elements?

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Marketing-Mix Modeling – Example

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enhancing brand equity and accountability

Documents

accessible website

concept of brand equity

brand expectations

established brand

brand definedbrand

brand earnings

goodwill equity

global reach2007 cocacola