Defining Brand Equity

Defining BRAND EQUITY FG - Brand Management – Chapter 2

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Learning Objectives

1. Defining Brand Equity

2. Measuring Brand Equity

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Brand Equity

Brand equity principles

Brand equity describes the value of having a well-known brand name.

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Brand Equity

Principles of brand equity

The value premium that a company realizes from a

product with a recognizable name as compared to its

generic equivalent.

Companies can create brand equity for their products

By making them memorable, easily recognizable and superior in

quality and reliability.

By developing values and emotions attached to their products

By developing Mass marketing campaigns

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Brand Equity

Principles of brand equity

The value premium that a company realizes from a

product with a recognizable name as compared to its

generic equivalent.

Companies can create brand equity for their products

By making them memorable, easily recognizable and superior in

quality and reliability.

By developing values and emotions attached to their products

By developing Mass marketing campaigns

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Brand Equity

Negative brand equity

If consumers are willing to pay more for a generic product than for a branded one, the brand is said to have negative brand equity.

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Brand Equity

Negative brand equity

Negative brand equity might happen if a company had a major product recall or caused a widely publicized environmental disaster.

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Brand Equity

Importance of brand equity Financial results

Sales predictability

Price premium

Attract investors

Umbrella effect:

When a company wants to expand its product line, if the brand's equity is positive, customers will more likely buy the new product by associating it with the existing successful brand.

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Brand Equity Measurement

Brand Equity can be measured at the

Firm level

Product level

Consumer level

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Firm Level Measurement Firm level approaches measure the brand as a financial

asset.

In short, a calculation is made regarding how much the brand is worth as an intangible asset.

Cf. Interbrand annual ranking

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Strong Brands 11


Product Level Measurement

The classic product level brand measurement example is to compare the price of a no-name (generic) or private label product to an "equivalent" branded product.

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Product Level Measurement

The difference in price, assuming all things equal, is due to the brand.

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Consumer Level Measurement

This approach seeks to measure 3 dimensions of brand equity:

1. Awareness

2. brand image

3. Customer loyalty

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Awareness the extent to which a brand is recognized by potential

customers, and is correctly associated with a particular product category.

Brand image This approach seeks to map the mind of the consumer to find

out what associations with the brand the consumer has.

Brand loyalty A consumer's commitment to repurchase or otherwise

continue using the brand, or other positive behaviors such as word of mouth advocacy.

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Measures of Brand Awareness Aided Awareness - When asked about a product category,

if the consumer is aided with a list of company names and he recognizes the company from the given set it is categorized as aided awareness.

Spontaneous awareness - When asked about a product category, the consumers are asked to list brands they know without any cues.

Top of the mind Awareness - It’s the first brand name listed by the consumers when asked to name brands they know without any cues.

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Brand Image

Brand image is the consumers’ perception about the brand.

It can be defined as a unique bundle of associations within the minds of target customers.

It signifies what the brand presently stands for.

It is a set of beliefs held about a specific brand.

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Brand Image

Definition: A unique set of associations in the minds of customers concerning what a brand stands for and the implied promises the brand makes.

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Brand Image Components

Visual associations: What customer see about the brand

Mental associations: What customers think about the brand

Product and attributes: (design, functionalities, quality, category, industry, etc.)

Usage imagery: when, where, how we use the product (e.g. it evoke sports, holidays, week-ends, etc.)

Personality of the brand (e.g. sophisticated (Chanel), rugged (The North Face), etc.

Emotional associations: What customers feels when in contact with the brand

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Brand Image Components

Visual associations:

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Round shaped spectacles and a stick Golden Arches & Ronald


Positive Emotions and moods

Good

Safe

Trust

Inspired

Belonging

Admired

Superior

Belonging

Self-confident

Express my personality

Aesthetic

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Trendy

“First” in things

Influential over others

Efficient

Comfortable

Generous

Gratified

Pride

Smart

Imaginative

Enchantment

Etc.

Brand Equity Measurement 22


Brand image

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Brands with high levels of awareness and strong, favorable and unique associations are high equity brands.

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Importance of brand image

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Brand Management

How to Measure Brand Equity 30


1. Measuring Brand AWARENESS

Can a customer spontaneously recall your brand?

Awareness is measured for a Category of product

Product category: A product category is all the products offering the same general functionality

Unaided Awareness

Aided Awareness

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Unaided awareness is captured via an open-ended question.

Example of unaided awareness:

Please Name all the brands of [Category of Product] you can think of.

E.g. General category: bags; Sub-categories women bags, men bags, children bags, outdoor bags, city bags, school bags, etc., fashion clothes, shoes, cars, beverages, etc.

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Example Top of Mind awareness:

What is the first brand that comes to your mind when you think of [Product category] women bags?

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Aided Awareness

Aided awareness provides a pick list from which respondents can choose the brands they are aware of.

This list must be randomized and be in a multiple response format where they can select any or all brands they have awareness of.

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Example Aided Awareness

Which of the following bottled water brands have you heard of? (Select all that apply)

Aquafina

Dasani

SmartWater

My Brand

Fiji

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Example Aided Awareness

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2. Measuring Brand ASSOCIATIONS

Example 1- Brand Associations

The following question can be open or aided (with a list of attributes proposed to respondent)

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Questions can start with the general perception of the brand:

When you think of Nike, What comes to your mind?

What does Nike means to you?


…and continue with more focus questions:

Product attributes

What does the air pocket evoke to you?

Usage imagery

When would you use Nike? (ask for occasions and moods)

Brand personality

If Nike were a person, what would its personality be like?

Feelings and experience

If I say Nike, what kind of feeling does it evoke?


2. Measuring Brand Association

Example 2 – Brand Associations

Which of the following attributes do you associate with [brand]?

Affordable

Fun

Safe

Dependable

Modern

Stylish

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Easy to Use

Essential

Powerful

Other Popular

None of these


Brand Personality The Five Dimensions of Brand Personality by Jennifer Aaker (1997) is a

framework to describe and measure the “personality” of a brand in five core dimensions, each divided into a set of facets. It is a model to describe the profile of a brand by using an analogy with a human being.

Sincerity (down-to-earth, honest, wholesome, cheerful)

Excitement (daring, spirited, imaginative, up-to-date)

Competence (reliable, intelligent, successful)

Sophistication (upper class, charming)

Ruggedness (outdoorsy, tough)

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Brand Personality

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Example of question used for Brand Personality

Overall, I think that Nike is down to earth

Disagree 1 2 3 4 5 6 7 Agree

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3. Measuring Brand LOYALTY

Customer loyalty is made up of 3 components

① Intention to purchase and repurchase

② Recommendation

③ Satisfaction

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Intention to purchase and repurchase

How likely are you to buy brand X?

Very likely – Rather Likely – Don’t know – Rather not likely - not likely at all

When is the last time you bought brand X?

Last week- 1 month ago – 3 month ago – 6 months ago – 1 year ago

Are you willing to buy again? When?

Very likely – Rather Likely – Don’t know – Rather not likely - not likely at all

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Recommendation

Are you willing to recommend brand X to relatives, friends and colleagues?

Very likely to not likely at all

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Satisfaction

Overall, how satisfied are you with brand X?

Extremely satisfied to not satisfied

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3. Satisfaction

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Only very satisfied

customers (delighted) are

LOYAL

Marketing

Defining Brand Equity