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Measurementand tracking of
brand equity
91
International Marketing ReviewVol 18 No 1 2001 pp 91-96
MCB University Press 0265-1335
Measurement and tracking ofbrand equity in the global
marketplaceThe PepsiCo experiencePaulette Kish and Dwight R Riskey
Innovation and Consumer Insights Frito-Lay IncDallas Texas USA and
Roger A KerinEdwin L Cox School of Business Southern Methodist University
Dallas Texas USA
Keywords International marketing Brand equity Brands National cultures
Abstract The conceptualization and measurement of brand equity including its sources andoutcomes are a challenging task particularly in a global marketplace This paper briefly describeshow PepsiCo Inc conceptualizes and measures brand equity across brands countries and overtime Special attention is given to the EquitrakTMbrand equity model developed by PepsiCo Incand the global brand equity tracking methodology employed by the company in 14 countries Thepaper concludes with managerial insights obtained from this effort
Marketing practitioners and academics alike regard brand equity as a platformupon which to build a competitive advantage future earnings streams andshareholder wealth (Keller 1998 Kerin and Sethuraman 1998) Neverthelessthe conceptualization and measurement of brand equity including its sourcesand outcomes remain a challenge Two key managerial questions must beanswered with respect to conceptualization and measurement
(1) What contributes to my brandrsquos equity and
(2) How can these contributors be used effectively to build or nurture mybrand (Davidson 1998)
Numerous conceptualizations of brand equity have been proposed (egGrapentine 1996) and a variety of measurement approaches have beendeveloped (eg Agarwal and Rao 1996) Each has its strengths and weaknessesand in the final analysis must be evaluated in light of brand managementrsquospurpose Regardless of a particular conceptualization measurement andtracking over time and across international boundaries are essential to manageand control brand equity effectively (Shocker et al 1994)
This paper provides a synoptic overview of the global brand equity modeland measurement system at PepsiCo Inc For the sake of brevity three topicsare addressed First the origin purpose and structure of the PepsiCo brandequity model are described Second the companyrsquos global brand equitymeasurement and global tracking methodology is outlined Finally selected
The research register for this journal is available at
httpwwwm cbupcomresearch_registers
The current issue and full text archive of this journal is available at
httpwwwemerald-library comft
InternationalMarketingReview181
92
managerial insights from brand equity modeling and measurement at PepsiCoare summarized
Brand equity model developmentBrand equity model development initiatives at PepsiCo originated at Frito-Layin the early 1990s After an exhaustive review of the then existingconceptualizations of brand equity and measurement procedures an executivedecision was made to create a proprietary model applicable to all majorPepsiCo brands both domestically and globally that could be used to trackbrands over time Model development focused on PepsiCorsquos three primarybusinesses in the early 1990s namely soft drinks (Pepsi-Cola) snack foods(Frito-Lay) and quick service restaurants (KFC Pizza Hut and Taco Bell)
It was decided early on that model development should focus more on cross-category generalizability at the brand level than on product specificity Thisdecision supported the goal of having a single definition of brand equity toenable benchmarking against so-called ` icon-staturersquorsquo brands Specifically thispermitted comparisons within PepsiCorsquos productbrand portfolio (eg Pepsi-Cola and Doritos) against key competitors (eg Coca-Cola for soft drinksMcDonaldrsquos for quick service restaurants) and relative to high-profile brandsmarketed by other consumer goods companies (eg Gillette and Nike)
A second important goal of the model was to strike a balance betweensensitivity (the ability to detect real equity changes) and stability (the absenceof spurious or short-term fluctuations) Relatedly other tools in place weredesigned to understand short-term peaks and valleys in awareness related tomarketing support timing marketing mix variables and seasonality Thebrand equity model was designed to detect only those changes that are truly` absorbedrsquorsquo by a brand plusmn ie changes that translate to a sustainable impact andinfluence brand equity over a longer (annual) period of time
An extensive examination of prior company quantitative and qualitativebrand and consumer research studies published literature (eg Aaker 1991Winters 1991 Keller 1993) and interviews with PepsiCo product brand andmarketing research management personnel followed The intent was touncover those attributes that contributed to a favorable brand-consumerrelationship across product categories plusmn a key managerial question Twenty-five attributes were developed and pre-tested in a full-scale pilot studyconducted in 1993 Correlation analysis eliminated redundant measures Factoranalysis was used to collapse the remaining attributes into the key factorsdefining the model
Two general factors emerged that contributed to a favorable brand-consumer relationship across product categories
(1) Recognition plusmn How broad and deep is a brandrsquos awareness and
(2) Regard plusmn How do people feel about the brand Both factors exhibitedface validity and had been independently identified by others (Owen1993) Further refinement of the model yielded four regard components plusmn
Measurementand tracking of
brand equity
93
brand reputation affiliation momentum and differentiation plusmn and aname EquitrakTM
Figure 1 displays the structure of PepsiCorsquos EquitrakTM brand equity modelThe four components of regard (each measured by several rated ` attributesrsquorsquo)are weighted and the resulting regard score is then adjusted for a brandrsquosrecognition by multiplying the two measures Subsequent diagnosticsperformed on the model yielded satisfactory results Product usage anddemographics were included in the final instrument and the EquitrakTMbrandequity model was used from 1993 through the present to track PepsiCo brandsin the USA
Global brand equity expansion and applicationPepsiCo deployed the EquitrakTMbrand equity model to track its major brandson a global scale in 1997 following its success in the USA Approximately1500 consumers in each of 14 countries is surveyed twice annually viatelephone interviews or door-to-door when necessary
In addition to PepsiCo brands including the recently introduced Pepsi Maxbrand outside the USA some 40-plus global brands in 12 product categories aretracked with the EquitrakTM brand equity model Up to 30 local brands percountry are regularly tracked as well By late 1999 PepsiCo had created abrand pound country pound time period database consisting of over 6000 EquitrakTM
brand equity ` scoresrsquorsquo in addition to EquitrakTMbrand equity component dataResults from each tracking wave are distilled and formally presented to
senior PepsiCo executives and country managers Comparisons are madebetween PepsiCo brands competitive brands and other global brands by
Figure 1Structure of the
EquitrakTMbrandequity model
InternationalMarketingReview181
94
country over time This presentation supplemented with other competitivedata is used to focus managerial attention on how PepsiCo brands andmarketing programs are performing
Although important for goal-setting by brand and tracking overall progressand liabilities in brand equity development the modelrsquos most important featurefor management guidance is its diagnostic capabilities Detailed analyses canbe conducted to determine the specific nature of a brandrsquos rise or fall in overallequity relative to competitors A sample of such a diagnostic analysis is shownin Figure 2
A simple plot of a brandrsquos regard and recognition scores across timedemonstrates the nature of a brandrsquos progress (or lack of it) in a given marketFigure 2 shows the development of brand equity for a snack brand over a two-year period in four countries This type of analysis provides not only asnapshot of the rate of equity change but also the components of that changeIn the case of Spain for example the brand has grown in overall regard (amongthose aware) as recognition has simultaneously increased Managers view thisbalanced picture of brand equity development as healthy Progress against keycompetitors would be the next item for assessment
In contrast this brandrsquos progress in Australia has been strong in buildingregard but relatively weaker in establishing recognition Specifically unaidedawareness (ie top-of-mind awareness) was found to be lagging in this marketMarketing plans focusing on the communication program to drive broaderbrand awareness were initiated
In a third market Poland progress against regard was slow whilerecognition growth was strong Here further analysis of attribute ratings that
Figure 2Brand equitydevelopment trend for asnack brand over timeby country
Measurementand tracking of
brand equity
95
comprise the overall regard score showed that the brand was viewed byconsumers as not highly differentiated from those of competitors Marketingprograms focused on brand quality value and uniqueness were developed toaddress these issues Finally the brandrsquos stable and favorable recognition andregard position in the UK indicated that prior and continuing marketinginvestments were achieving their intended effect No remedial action wasdeemed necessary
Managerial insights from global brand equity tracking
Development and applications of the EquitrakTM brand equity model haveyielded several managerial insights for global brand management at PepsiCoand Frito-Lay First brand management personnel recognized that equitychanges can be validly measured and reliably tracked over time Furthermorebrand equity changes can be observed among sub-segments of consumers Aninitial insight from the longitudinal results based on EquitrakTM trackingstudies was that most mature brands and notably ` icon-staturersquorsquo brands arenot subject to random volatility on a year-to-year basis
Second brand management recognized that the manner by which brandequity is built and nurtured often differs from country to country In fact theactual sources of brand equity may vary across countries in terms of specificattribute importance This insight is consistent with views expressed by Keller(1998)
Third by benchmarking PepsiCo brands against ` icon-staturersquorsquo brandsfurther insights about and basic principles for effective brand building andbrand management are made possible For example a brand whose perceivedquality is falling while its awareness and differentiation remain high can lookto see how other brands and particularly ` icon-staturersquorsquo brands in the same orsimilar situations addressed the issue
Finally brand management recognized that the amount and quality ofmarketing investments in a brand affect its equity position Findings fromEquitrakTMtracking studies both domestic and global indicate that
The impact of effective equity investments over time can be observed inthe resilience of strong equity brands These brands are able to weatherperiods of low or no marketing investment for a time with nomeasurable damage to equity Eventually however equity does declineeven for strong brands with no or low marketing investment
When brand equity does increase (decline) the change can be dramaticand cumulative over time if continuity of marketing investments ispresent (absent)
Equity increases (decreases) are not solely a function of the dollaramount of marketing investment in a given year The quality of theinvestment influences the dollar investment-brand equity relationship
InternationalMarketingReview181
96
Excessive promotion and price discounting produce sales volumeincreases but these same actions can result in a measurable decrease inbrand equity in the short run
In summary the global brand equity model and measurement system atPepsiCo Inc represents a marriage of theory and practice in marketing Thescholarly literature on brand equity provided a valuable theoretical basis and ameaningful framework for conceptualizing brand equity in a manner that isapplicable to all major PepsiCo brands The description of the PepsiCoexperience amplifies this literature by demonstrating its practical use in aglobal setting
References
Aaker D (1991) Managing Brand Equity Capitalizing on the Value of a Brand Name The FreePress New York NY
Agarwal M and Rao V (1996) `An empirical comparison of consumer-based measures of brandequityrsquorsquo Marketing Letters Vol 7 No 3 pp 237-47
Davidson H (1998) `The next generation of brand measurementrsquorsquo The Journal of BrandManagement Vol 5 No 6 pp 430-39
Grapentine T (1996) ` Demystifying brand equityrsquorsquo Marketing Management Vol 5 No 2pp 25-9
Kerin R and Sethuraman R (1998) ` Exploring the brand value-shareholder value nexus forconsumer goods companiesrsquorsquo Journal of the Academy of Marketing Science Vol 26 No 4pp 260-73
Keller K (1993) ` Conceptualizing measuring and managing customer-based brand equityrsquorsquoJournal of Marketing Vol 57 No 1 pp 1-22
Keller K (1998) Strategic Brand Management Building Measuring and Managing BrandEquity Prentice-Hall Upper Saddle River NJ
Owen S (1993) ` The Landor ImagePower Survey1 a global assessment of brand strengthrsquorsquo inAaker DA and Biel AL (Eds) Brand Equity and Advertising Lawrence ErlbaumAssociates Hillsdale NJ
Shocker A Srivastava R and Ruekert R (1994) ` Challenges and opportunities facing brandmanagement an introduction to the special issuersquorsquo Journal of Marketing Research Vol 31No 2 pp 149-58
Winters L (1991) `Brand equity measures some recent advancesrsquorsquo Marketing Research Vol 3No 3 pp 70-73
InternationalMarketingReview181
92
managerial insights from brand equity modeling and measurement at PepsiCoare summarized
Brand equity model developmentBrand equity model development initiatives at PepsiCo originated at Frito-Layin the early 1990s After an exhaustive review of the then existingconceptualizations of brand equity and measurement procedures an executivedecision was made to create a proprietary model applicable to all majorPepsiCo brands both domestically and globally that could be used to trackbrands over time Model development focused on PepsiCorsquos three primarybusinesses in the early 1990s namely soft drinks (Pepsi-Cola) snack foods(Frito-Lay) and quick service restaurants (KFC Pizza Hut and Taco Bell)
It was decided early on that model development should focus more on cross-category generalizability at the brand level than on product specificity Thisdecision supported the goal of having a single definition of brand equity toenable benchmarking against so-called ` icon-staturersquorsquo brands Specifically thispermitted comparisons within PepsiCorsquos productbrand portfolio (eg Pepsi-Cola and Doritos) against key competitors (eg Coca-Cola for soft drinksMcDonaldrsquos for quick service restaurants) and relative to high-profile brandsmarketed by other consumer goods companies (eg Gillette and Nike)
A second important goal of the model was to strike a balance betweensensitivity (the ability to detect real equity changes) and stability (the absenceof spurious or short-term fluctuations) Relatedly other tools in place weredesigned to understand short-term peaks and valleys in awareness related tomarketing support timing marketing mix variables and seasonality Thebrand equity model was designed to detect only those changes that are truly` absorbedrsquorsquo by a brand plusmn ie changes that translate to a sustainable impact andinfluence brand equity over a longer (annual) period of time
An extensive examination of prior company quantitative and qualitativebrand and consumer research studies published literature (eg Aaker 1991Winters 1991 Keller 1993) and interviews with PepsiCo product brand andmarketing research management personnel followed The intent was touncover those attributes that contributed to a favorable brand-consumerrelationship across product categories plusmn a key managerial question Twenty-five attributes were developed and pre-tested in a full-scale pilot studyconducted in 1993 Correlation analysis eliminated redundant measures Factoranalysis was used to collapse the remaining attributes into the key factorsdefining the model
Two general factors emerged that contributed to a favorable brand-consumer relationship across product categories
(1) Recognition plusmn How broad and deep is a brandrsquos awareness and
(2) Regard plusmn How do people feel about the brand Both factors exhibitedface validity and had been independently identified by others (Owen1993) Further refinement of the model yielded four regard components plusmn
Measurementand tracking of
brand equity
93
brand reputation affiliation momentum and differentiation plusmn and aname EquitrakTM
Figure 1 displays the structure of PepsiCorsquos EquitrakTM brand equity modelThe four components of regard (each measured by several rated ` attributesrsquorsquo)are weighted and the resulting regard score is then adjusted for a brandrsquosrecognition by multiplying the two measures Subsequent diagnosticsperformed on the model yielded satisfactory results Product usage anddemographics were included in the final instrument and the EquitrakTMbrandequity model was used from 1993 through the present to track PepsiCo brandsin the USA
Global brand equity expansion and applicationPepsiCo deployed the EquitrakTMbrand equity model to track its major brandson a global scale in 1997 following its success in the USA Approximately1500 consumers in each of 14 countries is surveyed twice annually viatelephone interviews or door-to-door when necessary
In addition to PepsiCo brands including the recently introduced Pepsi Maxbrand outside the USA some 40-plus global brands in 12 product categories aretracked with the EquitrakTM brand equity model Up to 30 local brands percountry are regularly tracked as well By late 1999 PepsiCo had created abrand pound country pound time period database consisting of over 6000 EquitrakTM
brand equity ` scoresrsquorsquo in addition to EquitrakTMbrand equity component dataResults from each tracking wave are distilled and formally presented to
senior PepsiCo executives and country managers Comparisons are madebetween PepsiCo brands competitive brands and other global brands by
Figure 1Structure of the
EquitrakTMbrandequity model
InternationalMarketingReview181
94
country over time This presentation supplemented with other competitivedata is used to focus managerial attention on how PepsiCo brands andmarketing programs are performing
Although important for goal-setting by brand and tracking overall progressand liabilities in brand equity development the modelrsquos most important featurefor management guidance is its diagnostic capabilities Detailed analyses canbe conducted to determine the specific nature of a brandrsquos rise or fall in overallequity relative to competitors A sample of such a diagnostic analysis is shownin Figure 2
A simple plot of a brandrsquos regard and recognition scores across timedemonstrates the nature of a brandrsquos progress (or lack of it) in a given marketFigure 2 shows the development of brand equity for a snack brand over a two-year period in four countries This type of analysis provides not only asnapshot of the rate of equity change but also the components of that changeIn the case of Spain for example the brand has grown in overall regard (amongthose aware) as recognition has simultaneously increased Managers view thisbalanced picture of brand equity development as healthy Progress against keycompetitors would be the next item for assessment
In contrast this brandrsquos progress in Australia has been strong in buildingregard but relatively weaker in establishing recognition Specifically unaidedawareness (ie top-of-mind awareness) was found to be lagging in this marketMarketing plans focusing on the communication program to drive broaderbrand awareness were initiated
In a third market Poland progress against regard was slow whilerecognition growth was strong Here further analysis of attribute ratings that
Figure 2Brand equitydevelopment trend for asnack brand over timeby country
Measurementand tracking of
brand equity
95
comprise the overall regard score showed that the brand was viewed byconsumers as not highly differentiated from those of competitors Marketingprograms focused on brand quality value and uniqueness were developed toaddress these issues Finally the brandrsquos stable and favorable recognition andregard position in the UK indicated that prior and continuing marketinginvestments were achieving their intended effect No remedial action wasdeemed necessary
Managerial insights from global brand equity tracking
Development and applications of the EquitrakTM brand equity model haveyielded several managerial insights for global brand management at PepsiCoand Frito-Lay First brand management personnel recognized that equitychanges can be validly measured and reliably tracked over time Furthermorebrand equity changes can be observed among sub-segments of consumers Aninitial insight from the longitudinal results based on EquitrakTM trackingstudies was that most mature brands and notably ` icon-staturersquorsquo brands arenot subject to random volatility on a year-to-year basis
Second brand management recognized that the manner by which brandequity is built and nurtured often differs from country to country In fact theactual sources of brand equity may vary across countries in terms of specificattribute importance This insight is consistent with views expressed by Keller(1998)
Third by benchmarking PepsiCo brands against ` icon-staturersquorsquo brandsfurther insights about and basic principles for effective brand building andbrand management are made possible For example a brand whose perceivedquality is falling while its awareness and differentiation remain high can lookto see how other brands and particularly ` icon-staturersquorsquo brands in the same orsimilar situations addressed the issue
Finally brand management recognized that the amount and quality ofmarketing investments in a brand affect its equity position Findings fromEquitrakTMtracking studies both domestic and global indicate that
The impact of effective equity investments over time can be observed inthe resilience of strong equity brands These brands are able to weatherperiods of low or no marketing investment for a time with nomeasurable damage to equity Eventually however equity does declineeven for strong brands with no or low marketing investment
When brand equity does increase (decline) the change can be dramaticand cumulative over time if continuity of marketing investments ispresent (absent)
Equity increases (decreases) are not solely a function of the dollaramount of marketing investment in a given year The quality of theinvestment influences the dollar investment-brand equity relationship
InternationalMarketingReview181
96
Excessive promotion and price discounting produce sales volumeincreases but these same actions can result in a measurable decrease inbrand equity in the short run
In summary the global brand equity model and measurement system atPepsiCo Inc represents a marriage of theory and practice in marketing Thescholarly literature on brand equity provided a valuable theoretical basis and ameaningful framework for conceptualizing brand equity in a manner that isapplicable to all major PepsiCo brands The description of the PepsiCoexperience amplifies this literature by demonstrating its practical use in aglobal setting
References
Aaker D (1991) Managing Brand Equity Capitalizing on the Value of a Brand Name The FreePress New York NY
Agarwal M and Rao V (1996) `An empirical comparison of consumer-based measures of brandequityrsquorsquo Marketing Letters Vol 7 No 3 pp 237-47
Davidson H (1998) `The next generation of brand measurementrsquorsquo The Journal of BrandManagement Vol 5 No 6 pp 430-39
Grapentine T (1996) ` Demystifying brand equityrsquorsquo Marketing Management Vol 5 No 2pp 25-9
Kerin R and Sethuraman R (1998) ` Exploring the brand value-shareholder value nexus forconsumer goods companiesrsquorsquo Journal of the Academy of Marketing Science Vol 26 No 4pp 260-73
Keller K (1993) ` Conceptualizing measuring and managing customer-based brand equityrsquorsquoJournal of Marketing Vol 57 No 1 pp 1-22
Keller K (1998) Strategic Brand Management Building Measuring and Managing BrandEquity Prentice-Hall Upper Saddle River NJ
Owen S (1993) ` The Landor ImagePower Survey1 a global assessment of brand strengthrsquorsquo inAaker DA and Biel AL (Eds) Brand Equity and Advertising Lawrence ErlbaumAssociates Hillsdale NJ
Shocker A Srivastava R and Ruekert R (1994) ` Challenges and opportunities facing brandmanagement an introduction to the special issuersquorsquo Journal of Marketing Research Vol 31No 2 pp 149-58
Winters L (1991) `Brand equity measures some recent advancesrsquorsquo Marketing Research Vol 3No 3 pp 70-73
Measurementand tracking of
brand equity
93
brand reputation affiliation momentum and differentiation plusmn and aname EquitrakTM
Figure 1 displays the structure of PepsiCorsquos EquitrakTM brand equity modelThe four components of regard (each measured by several rated ` attributesrsquorsquo)are weighted and the resulting regard score is then adjusted for a brandrsquosrecognition by multiplying the two measures Subsequent diagnosticsperformed on the model yielded satisfactory results Product usage anddemographics were included in the final instrument and the EquitrakTMbrandequity model was used from 1993 through the present to track PepsiCo brandsin the USA
Global brand equity expansion and applicationPepsiCo deployed the EquitrakTMbrand equity model to track its major brandson a global scale in 1997 following its success in the USA Approximately1500 consumers in each of 14 countries is surveyed twice annually viatelephone interviews or door-to-door when necessary
In addition to PepsiCo brands including the recently introduced Pepsi Maxbrand outside the USA some 40-plus global brands in 12 product categories aretracked with the EquitrakTM brand equity model Up to 30 local brands percountry are regularly tracked as well By late 1999 PepsiCo had created abrand pound country pound time period database consisting of over 6000 EquitrakTM
brand equity ` scoresrsquorsquo in addition to EquitrakTMbrand equity component dataResults from each tracking wave are distilled and formally presented to
senior PepsiCo executives and country managers Comparisons are madebetween PepsiCo brands competitive brands and other global brands by
Figure 1Structure of the
EquitrakTMbrandequity model
InternationalMarketingReview181
94
country over time This presentation supplemented with other competitivedata is used to focus managerial attention on how PepsiCo brands andmarketing programs are performing
Although important for goal-setting by brand and tracking overall progressand liabilities in brand equity development the modelrsquos most important featurefor management guidance is its diagnostic capabilities Detailed analyses canbe conducted to determine the specific nature of a brandrsquos rise or fall in overallequity relative to competitors A sample of such a diagnostic analysis is shownin Figure 2
A simple plot of a brandrsquos regard and recognition scores across timedemonstrates the nature of a brandrsquos progress (or lack of it) in a given marketFigure 2 shows the development of brand equity for a snack brand over a two-year period in four countries This type of analysis provides not only asnapshot of the rate of equity change but also the components of that changeIn the case of Spain for example the brand has grown in overall regard (amongthose aware) as recognition has simultaneously increased Managers view thisbalanced picture of brand equity development as healthy Progress against keycompetitors would be the next item for assessment
In contrast this brandrsquos progress in Australia has been strong in buildingregard but relatively weaker in establishing recognition Specifically unaidedawareness (ie top-of-mind awareness) was found to be lagging in this marketMarketing plans focusing on the communication program to drive broaderbrand awareness were initiated
In a third market Poland progress against regard was slow whilerecognition growth was strong Here further analysis of attribute ratings that
Figure 2Brand equitydevelopment trend for asnack brand over timeby country
Measurementand tracking of
brand equity
95
comprise the overall regard score showed that the brand was viewed byconsumers as not highly differentiated from those of competitors Marketingprograms focused on brand quality value and uniqueness were developed toaddress these issues Finally the brandrsquos stable and favorable recognition andregard position in the UK indicated that prior and continuing marketinginvestments were achieving their intended effect No remedial action wasdeemed necessary
Managerial insights from global brand equity tracking
Development and applications of the EquitrakTM brand equity model haveyielded several managerial insights for global brand management at PepsiCoand Frito-Lay First brand management personnel recognized that equitychanges can be validly measured and reliably tracked over time Furthermorebrand equity changes can be observed among sub-segments of consumers Aninitial insight from the longitudinal results based on EquitrakTM trackingstudies was that most mature brands and notably ` icon-staturersquorsquo brands arenot subject to random volatility on a year-to-year basis
Second brand management recognized that the manner by which brandequity is built and nurtured often differs from country to country In fact theactual sources of brand equity may vary across countries in terms of specificattribute importance This insight is consistent with views expressed by Keller(1998)
Third by benchmarking PepsiCo brands against ` icon-staturersquorsquo brandsfurther insights about and basic principles for effective brand building andbrand management are made possible For example a brand whose perceivedquality is falling while its awareness and differentiation remain high can lookto see how other brands and particularly ` icon-staturersquorsquo brands in the same orsimilar situations addressed the issue
Finally brand management recognized that the amount and quality ofmarketing investments in a brand affect its equity position Findings fromEquitrakTMtracking studies both domestic and global indicate that
The impact of effective equity investments over time can be observed inthe resilience of strong equity brands These brands are able to weatherperiods of low or no marketing investment for a time with nomeasurable damage to equity Eventually however equity does declineeven for strong brands with no or low marketing investment
When brand equity does increase (decline) the change can be dramaticand cumulative over time if continuity of marketing investments ispresent (absent)
Equity increases (decreases) are not solely a function of the dollaramount of marketing investment in a given year The quality of theinvestment influences the dollar investment-brand equity relationship
InternationalMarketingReview181
96
Excessive promotion and price discounting produce sales volumeincreases but these same actions can result in a measurable decrease inbrand equity in the short run
In summary the global brand equity model and measurement system atPepsiCo Inc represents a marriage of theory and practice in marketing Thescholarly literature on brand equity provided a valuable theoretical basis and ameaningful framework for conceptualizing brand equity in a manner that isapplicable to all major PepsiCo brands The description of the PepsiCoexperience amplifies this literature by demonstrating its practical use in aglobal setting
References
Aaker D (1991) Managing Brand Equity Capitalizing on the Value of a Brand Name The FreePress New York NY
Agarwal M and Rao V (1996) `An empirical comparison of consumer-based measures of brandequityrsquorsquo Marketing Letters Vol 7 No 3 pp 237-47
Davidson H (1998) `The next generation of brand measurementrsquorsquo The Journal of BrandManagement Vol 5 No 6 pp 430-39
Grapentine T (1996) ` Demystifying brand equityrsquorsquo Marketing Management Vol 5 No 2pp 25-9
Kerin R and Sethuraman R (1998) ` Exploring the brand value-shareholder value nexus forconsumer goods companiesrsquorsquo Journal of the Academy of Marketing Science Vol 26 No 4pp 260-73
Keller K (1993) ` Conceptualizing measuring and managing customer-based brand equityrsquorsquoJournal of Marketing Vol 57 No 1 pp 1-22
Keller K (1998) Strategic Brand Management Building Measuring and Managing BrandEquity Prentice-Hall Upper Saddle River NJ
Owen S (1993) ` The Landor ImagePower Survey1 a global assessment of brand strengthrsquorsquo inAaker DA and Biel AL (Eds) Brand Equity and Advertising Lawrence ErlbaumAssociates Hillsdale NJ
Shocker A Srivastava R and Ruekert R (1994) ` Challenges and opportunities facing brandmanagement an introduction to the special issuersquorsquo Journal of Marketing Research Vol 31No 2 pp 149-58
Winters L (1991) `Brand equity measures some recent advancesrsquorsquo Marketing Research Vol 3No 3 pp 70-73
InternationalMarketingReview181
94
country over time This presentation supplemented with other competitivedata is used to focus managerial attention on how PepsiCo brands andmarketing programs are performing
Although important for goal-setting by brand and tracking overall progressand liabilities in brand equity development the modelrsquos most important featurefor management guidance is its diagnostic capabilities Detailed analyses canbe conducted to determine the specific nature of a brandrsquos rise or fall in overallequity relative to competitors A sample of such a diagnostic analysis is shownin Figure 2
A simple plot of a brandrsquos regard and recognition scores across timedemonstrates the nature of a brandrsquos progress (or lack of it) in a given marketFigure 2 shows the development of brand equity for a snack brand over a two-year period in four countries This type of analysis provides not only asnapshot of the rate of equity change but also the components of that changeIn the case of Spain for example the brand has grown in overall regard (amongthose aware) as recognition has simultaneously increased Managers view thisbalanced picture of brand equity development as healthy Progress against keycompetitors would be the next item for assessment
In contrast this brandrsquos progress in Australia has been strong in buildingregard but relatively weaker in establishing recognition Specifically unaidedawareness (ie top-of-mind awareness) was found to be lagging in this marketMarketing plans focusing on the communication program to drive broaderbrand awareness were initiated
In a third market Poland progress against regard was slow whilerecognition growth was strong Here further analysis of attribute ratings that
Figure 2Brand equitydevelopment trend for asnack brand over timeby country
Measurementand tracking of
brand equity
95
comprise the overall regard score showed that the brand was viewed byconsumers as not highly differentiated from those of competitors Marketingprograms focused on brand quality value and uniqueness were developed toaddress these issues Finally the brandrsquos stable and favorable recognition andregard position in the UK indicated that prior and continuing marketinginvestments were achieving their intended effect No remedial action wasdeemed necessary
Managerial insights from global brand equity tracking
Development and applications of the EquitrakTM brand equity model haveyielded several managerial insights for global brand management at PepsiCoand Frito-Lay First brand management personnel recognized that equitychanges can be validly measured and reliably tracked over time Furthermorebrand equity changes can be observed among sub-segments of consumers Aninitial insight from the longitudinal results based on EquitrakTM trackingstudies was that most mature brands and notably ` icon-staturersquorsquo brands arenot subject to random volatility on a year-to-year basis
Second brand management recognized that the manner by which brandequity is built and nurtured often differs from country to country In fact theactual sources of brand equity may vary across countries in terms of specificattribute importance This insight is consistent with views expressed by Keller(1998)
Third by benchmarking PepsiCo brands against ` icon-staturersquorsquo brandsfurther insights about and basic principles for effective brand building andbrand management are made possible For example a brand whose perceivedquality is falling while its awareness and differentiation remain high can lookto see how other brands and particularly ` icon-staturersquorsquo brands in the same orsimilar situations addressed the issue
Finally brand management recognized that the amount and quality ofmarketing investments in a brand affect its equity position Findings fromEquitrakTMtracking studies both domestic and global indicate that
The impact of effective equity investments over time can be observed inthe resilience of strong equity brands These brands are able to weatherperiods of low or no marketing investment for a time with nomeasurable damage to equity Eventually however equity does declineeven for strong brands with no or low marketing investment
When brand equity does increase (decline) the change can be dramaticand cumulative over time if continuity of marketing investments ispresent (absent)
Equity increases (decreases) are not solely a function of the dollaramount of marketing investment in a given year The quality of theinvestment influences the dollar investment-brand equity relationship
InternationalMarketingReview181
96
Excessive promotion and price discounting produce sales volumeincreases but these same actions can result in a measurable decrease inbrand equity in the short run
In summary the global brand equity model and measurement system atPepsiCo Inc represents a marriage of theory and practice in marketing Thescholarly literature on brand equity provided a valuable theoretical basis and ameaningful framework for conceptualizing brand equity in a manner that isapplicable to all major PepsiCo brands The description of the PepsiCoexperience amplifies this literature by demonstrating its practical use in aglobal setting
References
Aaker D (1991) Managing Brand Equity Capitalizing on the Value of a Brand Name The FreePress New York NY
Agarwal M and Rao V (1996) `An empirical comparison of consumer-based measures of brandequityrsquorsquo Marketing Letters Vol 7 No 3 pp 237-47
Davidson H (1998) `The next generation of brand measurementrsquorsquo The Journal of BrandManagement Vol 5 No 6 pp 430-39
Grapentine T (1996) ` Demystifying brand equityrsquorsquo Marketing Management Vol 5 No 2pp 25-9
Kerin R and Sethuraman R (1998) ` Exploring the brand value-shareholder value nexus forconsumer goods companiesrsquorsquo Journal of the Academy of Marketing Science Vol 26 No 4pp 260-73
Keller K (1993) ` Conceptualizing measuring and managing customer-based brand equityrsquorsquoJournal of Marketing Vol 57 No 1 pp 1-22
Keller K (1998) Strategic Brand Management Building Measuring and Managing BrandEquity Prentice-Hall Upper Saddle River NJ
Owen S (1993) ` The Landor ImagePower Survey1 a global assessment of brand strengthrsquorsquo inAaker DA and Biel AL (Eds) Brand Equity and Advertising Lawrence ErlbaumAssociates Hillsdale NJ
Shocker A Srivastava R and Ruekert R (1994) ` Challenges and opportunities facing brandmanagement an introduction to the special issuersquorsquo Journal of Marketing Research Vol 31No 2 pp 149-58
Winters L (1991) `Brand equity measures some recent advancesrsquorsquo Marketing Research Vol 3No 3 pp 70-73
Measurementand tracking of
brand equity
95
comprise the overall regard score showed that the brand was viewed byconsumers as not highly differentiated from those of competitors Marketingprograms focused on brand quality value and uniqueness were developed toaddress these issues Finally the brandrsquos stable and favorable recognition andregard position in the UK indicated that prior and continuing marketinginvestments were achieving their intended effect No remedial action wasdeemed necessary
Managerial insights from global brand equity tracking
Development and applications of the EquitrakTM brand equity model haveyielded several managerial insights for global brand management at PepsiCoand Frito-Lay First brand management personnel recognized that equitychanges can be validly measured and reliably tracked over time Furthermorebrand equity changes can be observed among sub-segments of consumers Aninitial insight from the longitudinal results based on EquitrakTM trackingstudies was that most mature brands and notably ` icon-staturersquorsquo brands arenot subject to random volatility on a year-to-year basis
Second brand management recognized that the manner by which brandequity is built and nurtured often differs from country to country In fact theactual sources of brand equity may vary across countries in terms of specificattribute importance This insight is consistent with views expressed by Keller(1998)
Third by benchmarking PepsiCo brands against ` icon-staturersquorsquo brandsfurther insights about and basic principles for effective brand building andbrand management are made possible For example a brand whose perceivedquality is falling while its awareness and differentiation remain high can lookto see how other brands and particularly ` icon-staturersquorsquo brands in the same orsimilar situations addressed the issue
Finally brand management recognized that the amount and quality ofmarketing investments in a brand affect its equity position Findings fromEquitrakTMtracking studies both domestic and global indicate that
The impact of effective equity investments over time can be observed inthe resilience of strong equity brands These brands are able to weatherperiods of low or no marketing investment for a time with nomeasurable damage to equity Eventually however equity does declineeven for strong brands with no or low marketing investment
When brand equity does increase (decline) the change can be dramaticand cumulative over time if continuity of marketing investments ispresent (absent)
Equity increases (decreases) are not solely a function of the dollaramount of marketing investment in a given year The quality of theinvestment influences the dollar investment-brand equity relationship
InternationalMarketingReview181
96
Excessive promotion and price discounting produce sales volumeincreases but these same actions can result in a measurable decrease inbrand equity in the short run
In summary the global brand equity model and measurement system atPepsiCo Inc represents a marriage of theory and practice in marketing Thescholarly literature on brand equity provided a valuable theoretical basis and ameaningful framework for conceptualizing brand equity in a manner that isapplicable to all major PepsiCo brands The description of the PepsiCoexperience amplifies this literature by demonstrating its practical use in aglobal setting
References
Aaker D (1991) Managing Brand Equity Capitalizing on the Value of a Brand Name The FreePress New York NY
Agarwal M and Rao V (1996) `An empirical comparison of consumer-based measures of brandequityrsquorsquo Marketing Letters Vol 7 No 3 pp 237-47
Davidson H (1998) `The next generation of brand measurementrsquorsquo The Journal of BrandManagement Vol 5 No 6 pp 430-39
Grapentine T (1996) ` Demystifying brand equityrsquorsquo Marketing Management Vol 5 No 2pp 25-9
Kerin R and Sethuraman R (1998) ` Exploring the brand value-shareholder value nexus forconsumer goods companiesrsquorsquo Journal of the Academy of Marketing Science Vol 26 No 4pp 260-73
Keller K (1993) ` Conceptualizing measuring and managing customer-based brand equityrsquorsquoJournal of Marketing Vol 57 No 1 pp 1-22
Keller K (1998) Strategic Brand Management Building Measuring and Managing BrandEquity Prentice-Hall Upper Saddle River NJ
Owen S (1993) ` The Landor ImagePower Survey1 a global assessment of brand strengthrsquorsquo inAaker DA and Biel AL (Eds) Brand Equity and Advertising Lawrence ErlbaumAssociates Hillsdale NJ
Shocker A Srivastava R and Ruekert R (1994) ` Challenges and opportunities facing brandmanagement an introduction to the special issuersquorsquo Journal of Marketing Research Vol 31No 2 pp 149-58
Winters L (1991) `Brand equity measures some recent advancesrsquorsquo Marketing Research Vol 3No 3 pp 70-73
InternationalMarketingReview181
96
Excessive promotion and price discounting produce sales volumeincreases but these same actions can result in a measurable decrease inbrand equity in the short run
In summary the global brand equity model and measurement system atPepsiCo Inc represents a marriage of theory and practice in marketing Thescholarly literature on brand equity provided a valuable theoretical basis and ameaningful framework for conceptualizing brand equity in a manner that isapplicable to all major PepsiCo brands The description of the PepsiCoexperience amplifies this literature by demonstrating its practical use in aglobal setting
References
Aaker D (1991) Managing Brand Equity Capitalizing on the Value of a Brand Name The FreePress New York NY
Agarwal M and Rao V (1996) `An empirical comparison of consumer-based measures of brandequityrsquorsquo Marketing Letters Vol 7 No 3 pp 237-47
Davidson H (1998) `The next generation of brand measurementrsquorsquo The Journal of BrandManagement Vol 5 No 6 pp 430-39
Grapentine T (1996) ` Demystifying brand equityrsquorsquo Marketing Management Vol 5 No 2pp 25-9
Kerin R and Sethuraman R (1998) ` Exploring the brand value-shareholder value nexus forconsumer goods companiesrsquorsquo Journal of the Academy of Marketing Science Vol 26 No 4pp 260-73
Keller K (1993) ` Conceptualizing measuring and managing customer-based brand equityrsquorsquoJournal of Marketing Vol 57 No 1 pp 1-22
Keller K (1998) Strategic Brand Management Building Measuring and Managing BrandEquity Prentice-Hall Upper Saddle River NJ
Owen S (1993) ` The Landor ImagePower Survey1 a global assessment of brand strengthrsquorsquo inAaker DA and Biel AL (Eds) Brand Equity and Advertising Lawrence ErlbaumAssociates Hillsdale NJ
Shocker A Srivastava R and Ruekert R (1994) ` Challenges and opportunities facing brandmanagement an introduction to the special issuersquorsquo Journal of Marketing Research Vol 31No 2 pp 149-58
Winters L (1991) `Brand equity measures some recent advancesrsquorsquo Marketing Research Vol 3No 3 pp 70-73