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Chapter 8
Developing a Brand Equity Measurement & Management System
Chapter Objectives
Overview
A brand audit is a consumer-focused exercise to assess the health of the brand, uncover its
sources of brand equity, and suggest ways to improve and leverage its equity. The brand
audit consists of two steps: the brand inventory and the brand exploratory.
Tracking studies measure consumer attitudes toward the brand on a consistent basis over
time and provide a contemporary picture of the state of the brand. Five key measures can be
used to capture the consumer mindset: brand awareness, brand associations, brand attitudes,
brand attachment, and brand activity or experience.
Brand equity management systems consist of three components: a Brand Equity Charter, a
Brand Equity Report, and the creation of senior-level executive positions charged with
overseeing the implementation of the Brand Equity Charter and Brand Equity Report. The
Brand Equity Charter should accomplish the following: define the firm’s view of the brand
equity concept and why it is important; describe the scope of key brands; specify the actual
and desired brand equity for all brands in the brand hierarchy; explain how brand equity is
measured by tracking studies and the Brand Equity Report; provide strategic guidelines for
brand equity management; provide specific tactical guidelines for marketing programs;
specify proper treatment of brands in terms of trademark usage, packaging, and
communications.
The Brand Equity Report should provide description as to what is happening with a brand
as well as to why it is happening. It should also include all relevant internal and external
measures of brand performance as well as sources and outcomes of brand equity. To
provide adequate management, it is important for companies to establish a position of Vice
President or Director of Strategic Brand Management to oversee the implementation of the
Charter and Report and provide central coordination for all branding activities.
Brand Focus 8.0 illustrates a sample brand audit using the Rolex brand as an example.
Science of Branding
Personas are detailed profiles of one, or perhaps a few, target market consumers. They are
often defined in terms of demographic, psychographic, geographic, or other descriptive
attitudinal or behavioral information. The rationale behind personas is to provide exemplars
or archetypes of how the target customer looks, acts, and feels that are as true-to-life as
possible, to ensure marketers within the organization fully understand and appreciate their
target market and therefore incorporate a nuanced target customer point of view in all their
marketing decision-making. Personas are fundamentally designed to bring the target
consumer to life.
A good brand persona can guide all marketing activities. Although personas can provide a
very detailed and accessible perspective on the target market, it can come at a cost. The more
heterogeneity in the target market, the more problematic the use of personas can be. To
overcome the potential problem of overgeneralization, some firms are creating multiple
personas to provide a richer tapestry of the target market.
There can also be varying levels of personas, such as primary (target consumer), secondary
(target consumer with differing needs, targets, goals), and negative (false stereotypes of
users).
Internal branding creates a positive and more productive work environment. It can also be a
platform for change and help foster an organization’s identity. According to branding expert
Scott Davis, for employees to become passionate brand advocates, they must understand
what a brand is, how it is built, what their organization’s brand stands for, and what their
role is in delivering on the brand promise. Formally, he sees the process of helping an
organization’s employees assimilate the brand as three stages:
• Hear It: How do we best get it into their hands?
• Believe It: How do we best get it into their heads?
• Live It: How do we best get it into their hearts?
Davis also argues that six key principles should guide the brand assimilation process within
an organization:
• Make the brand relevant—Each employee must understand and embrace the brand
meaning.
• Make the brand accessible—Employees must know where they can get brand
knowledge and answers to their brand-related questions.
• Reinforce the brand continuously—Management must reinforce the brand meaning
with employees beyond the initial rollout of an internal branding program.
• Make brand education an ongoing program—Provide new employees with inspiring
and informative training.
• Reward on-brand behaviors—An incentive system to reward employees for
exceptional support of the brand strategy should coincide with the roll-out of an
internal branding program.
• Align hiring practices—HR and marketing must work together to develop criteria
and screening procedures to ensure that new hires are good fits for the company’s
brand culture.
Davis also emphasizes the role of senior management in driving internal branding, noting
that the CEO ultimately sets the tone and compliance with a brand-based culture and
determines whether proper resources and procedures are put into place.
Branding Briefs
Introduction: We’re conducting a short online survey to gather consumer opinions about
quick-service or “fast-food” restaurant chains.
Brand Judgments
We now want to ask you some questions about McDonald’s as a company. Please indicate
your agreement with the following statements.
McDonald’s is . . .
a. Innovative
b. Knowledgeable
c. Trustworthy
d. Likable
e. Concerned about their customers
f. Concerned about society as a whole
g. Likable
h. Admirable
Brand Performance
We now would like to ask some specific questions about McDonald’s. Please indicate your
agreement with the following statements.
McDonald’s . . .
a. Is convenient to eat at
b. Provides quick, efficient service
c. Has clean facilities
d. Is ideal for the whole family
e. Has delicious food
f. Has healthy food
g. Has a varied menu
h. Has friendly, courteous staff
i. Offers fun promotions
j. Has a stylish and attractive look and design
k. Has high-quality food
Brand Imagery
Brand Feelings
a. Warmth?
b. Fun?
c. Excitement?
d. Sense of security or confidence?
e. Social approval?
f. Self-respect?
Brand Resonance
Mayo Clinic grew to be a worldwide leader in patient care, research, and education and
became renowned for its world-class specialty care and medical research. In 1996, Mayo
undertook its first brand equity study and since then has conducted regular, national
qualitative and quantitative studies. Mayo’s research identifies seven key brand attributes or
values, including (1) integration, (2) integrity, (3) longevity, (4) exclusivity, (5) leadership, (6)
wisdom, and (7) dedication.
In terms of integration, respondents described Mayo as bringing together a wealth of
resources to provide the best possible care. For integrity, respondents placed great value on
the fact that Mayo is noncommercial and committed to health and healing over profit.
In a more recent quantitative study, overall awareness of Mayo Clinic in the United States
was 90.2 percent, and a remarkable one-third knew at least one Mayo patient. From its
research, Mayo Clinic understands that its brand “is precious and powerful.” Mayo realized
that while it had an overwhelmingly positive image, it was vital to develop guidelines to
protect the brand. In 1999, the clinic created a brand management infrastructure to be the
“institutional clearinghouse for ongoing knowledge about external perceptions of Mayo
Clinic and its related activities.” Mayo Clinic also established guidelines for applying the
brand to products and services. Its brand management measures work to ensure that the
clinic preserves its brand equity.
To help companies evaluate if their marketing assessment system is good enough, Tim
Ambler suggests that they ask the following 10 questions—the higher the score, the better
the assessment system.
1. Does the senior executive team regularly and formally assess marketing performance?
a. Yearly—10
b. Six-monthly—10
c. Quarterly—5
d. More often—0
e. Rarely—0
f. Never—0
3. How much time does the senior executive team give to marketing issues?
a. >30%—10
b. 20–30%—6
c. 10–20%—4;
d. <10%—0
4. Does the business/marketing plan show the nonfinancial corporate goals and link them to
market goals?
a. No/no plan—0
b. Corporate no, market yes—5
c. Yes to both—10
5. Does the plan show the comparison of your marketing performance with competitors or
the market as a whole?
a. No/no plan—0
b. Yes, clearly—10
c. In between—5
a. Brand equity—10
b. Reputation—10
c. Other term—5
d. We have no term—0
7. Does the senior executive team’s performance review involve a quantified view of the
main marketing asset and how it has changed?
a. Yes to both—10
b. Yes but only financially (brand valuation)—5
c. Not really—0
8. Has the senior executive team quantified what “success” would look like 5 or 10 years
from now?
a. No—0
b. Yes—10
c. Don’t know—0
9. Does your strategy have quantified milestones to indicate progress toward that success?
a. No—0
b. Yes—10
c. What strategy?—0
10. Are the marketing performance indicators seen by the senior executive team aligned with
these milestones?
a. No—0
b. Yes, external (customers and competitors)—7
c. Yes, internal (employees and innovativeness)—5
d. Yes, both—10
Brand Focus
Rolex has remained one of the most recognized and sought-after luxury brands in the world.
A thorough audit can help pinpoint opportunities and challenges for Rolex, whose brand
equity has been historically strong, as much is at stake.
Background
History—Rolex was founded in 1905 by a German named Hans Wilsdorf and his brother-
in-law, William Davis, as a watch-making company, Wilsdorf & Davis, with headquarters in
London, England. In 1912, Rolex moved its headquarters to Geneva, Switzerland, and
started working on improving the reliability of its watches. Twelve years later, Wilsdorf
developed and patented the now famous Oyster waterproof case and screw crown. Over the
years, Rolex has pushed innovation in watches to new levels. For decades, Swiss-made
watches owned the middle and high-end markets, remaining virtually unrivaled until the
invention of the quartz watch in 1969. In order to survive, Rolex was forced to move into
the high-end market exclusively—leaving the middle to the quartz people—and create a
strategy to defend and build its position there.
Private Ownership—Rolex is a privately owned company and has been controlled by only
three people in its 100-year history. By staying an independent entity, Rolex has remained
focused on its core business.
Brand Inventory
Rolex not only produces extremely high-quality timepieces, but also tightly controls how its
watches are sold, ensuring high demand and premium prices. Its sophisticated marketing
strategy has created an exclusive and premium brand that many aspire to own.
Brand Elements—Rolex’s most distinguishable brand element is its Crown logo. Many Rolex
watches also have a distinct look, including a big round face and wide wrist band.
Product—Throughout the years, Rolex timepieces have maintained the high quality,
durability, and prestige on which the company built its name. The company does not license
its brand or produce any other product besides watches. Its product portfolio is clear,
concise, and focused.
Sports and Culture—Rolex sponsors a variety of elite athletic and cultural events to reinforce
the same messages, values, and associations as it does through its ambassador endorsements.
These include a quest for excellence, pursuit of perfection, teamwork, and ruggedness.
Philanthropy—Rolex gives back through three established philanthropic programs, viz. the
Awards for Enterprise program, the Young Laureates Programme, and the Rolex Mentor
and Protégé Arts Initiative.
Brand Exploratory
Brand Resonance Pyramid—The functional and emotional benefits Rolex strives to deliver
are in harmony with consumers’ imagery and feelings about the brand. Rolex also enjoys the
highest brand awareness of any luxury brand as well as high repeat purchase rates and high
customer loyalty. Rolex has successfully focused on both the superior product attributes and
the imagery associated with owning and wearing a Rolex.
Competitive Analysis—Through its pricing and distribution strategies, Rolex has positioned
itself as a high-end luxury watch brand. On the lower end of the spectrum it competes with
companies such as TAG Heuer and OMEGA, and on the higher end with brands such as
Patek Philippe, maker of the world’s most expensive wristwatch.
TAG Heuer—A leader in the luxury watch industry, the Swiss firm TAG Heuer
distinguishes itself by focusing on extreme chronograph precision in its watches, and on
sports and auto-racing sponsorship in its advertising. TAG ’s image and positioning is
inextricably connected to chronograph precision. TAG Heuer uses officially licensed
retailers to sell its watches both in stores and online. The watchmaker generates brand
awareness through brand ambassadors and sponsoring sporting events and advertises
extensively in magazines.
OMEGA—OMEGA has long prided itself on the precision of its watches and timing
devices. OMEGA was the time equipment selected for the 1936 Winter Olympics, which
saw the first use of synchronized chronographs. OMEGA employs ambassadors to generate
brand awareness, including athletes Michael Phelps, Alexander Popov, Ernie Els, and race
car driver Michael Schumacher as well as Hollywood stars Nicole Kidman and Cindy
Crawford. OMEGA watches are offered in both women’s and men’s styles in four different
collections: Constellation, Seamaster, Speedmaster, and De Ville. Prices vary greatly even
within individual collections.
Patek Philippe— The innovator of many technologies found in today’s high-end watch,
Patek Philippe represents the absolute pinnacle of luxury timepieces. In particular, the firm
prides itself on creating many of the world’s most complicated watches through innovations
with split-second chronograph and perpetual date technology. Patek Philippe does not rely
on event sponsorship or brand ambassadors to generate name recognition. Patek Philippe
evaluates every authorized dealer’s storefront to ensure that it meets the watchmaker’s
quality standards. It also separates itself from other watchmakers on price, with its least
expensive noncustomized watch retailing.
Strategic Recommendations
Positioning
Points-of-Parity—Rolex is similar to other watchmakers in the high-end luxury watch
market on several levels. All pride themselves on their attention to detail and ongoing
innovation in the watch industry.
Brand Mantra—Rolex has been extremely successful in building a global name through
clever marketing and communications, without compromising the integrity of the brand.
Tactical Recommendations
The Rolex brand audit proved that Rolex is a very strong brand with significant brand
equity. It also identified a few opportunities and challenges:
Discussion questions
1. What do you see as the biggest challenges in conducting a brand audit? What steps would you take to
overcome them?
Page: 267
Learning Objective: Outline the two steps in conducting a brand audit.
AACSB: Analytic Skills
2. Pick a brand. See if you can assemble a brand inventory for it.
Answers will vary depending on current brand performance. The purpose of the brand
inventory is to provide a current, comprehensive profile of how all the products and
services sold by a company are marketed and branded.
Page: 268
Learning Objective: Outline the two steps in conducting a brand audit.
AACSB: Analytic Skills
3. Consider the McDonald’s tracking survey presented in Branding Brief 8-1. What might you do
differently? What questions would you change or drop? What questions might you add? How might this
tracking survey differ from those used for other products?
Answers will vary. Students may be divided into groups of 3-4 to weigh and assess the
tracking survey provided in the branding brief. They may then be asked to opine on the
survey and differentiate it from a survey for another product such as Wal-Mart.
Page: 275
Learning Objective: Describe how to design, conduct, and interpret a tracking study.
AACSB: Analytic Skills
4. Can you develop a tracking survey for the Mayo Clinic? How might it differ from the McDonald’s
tracking survey?
A tracking study for the Mayo Clinic would probably need to be designed for two
different groups of consumers, those who had received care at the Mayo Clinic and
those who had not. Those who had received care at the Mayo Clinic would be much
more informed about the type and quality of care available, and would be able to give
more detailed responses to more specific questions. The sample set that had not received
care from the Mayo Clinic would be equally valuable, because it would provide insight
into public perception of the brand. The questions on the Mayo Clinic tracking survey
would differ dramatically from the McDonald’s survey, but would still cover the six
elements of the customer-based brand equity pyramid.
Page: 274
Learning Objective: Describe how to design, conduct, and interpret a tracking study.
AACSB: Analytic Skills
5. Critique the Rolex brand audit in Brand Focus 8.0. How do you think it could be improved?
Page: 289
Learning Objective: Outline the two steps in conducting a brand audit.
AACSB: Analytic Skills
1. Have students discuss how they would go about conducting a brand audit for a brand of
their choice. This activity will help them understand better the concepts of brand
inventory and brand exploratory.
Page: 267
Learning Objective: Outline the two steps in conducting a brand audit.
AACSB: Analytic Skills
Question type: Individual/Group
Time to complete the exercise: 15 minutes
This activity may be carried out after the class is introduced to the concept of brand
audits.
2. Have groups of students design a brand tracking survey for the same brand. The groups
may then assess the similarities and differences between the surveys.
Page: 274
Learning Objective: Describe how to design, conduct, and interpret a tracking study.
AACSB: Analytic Skills
Question type: Group
Time to complete the exercise: 12-15 minutes
This activity may be carried out after the class is introduced to the concept of brand
tracking studies.
3. Have students choose a well-known brand and develop a Brand Equity Charter. Students
may then identify current branding issues facing the chosen company and use the Brand
Equity Charter to develop responses to these issues.
Page: 281
Learning Objective: Identify the steps in implementing a brand equity management
system.
AACSB: Analytic Skills
Question type: Individual/Group
Time to complete the exercise: 10-12 minutes
This activity may be carried out after the class is introduced to the concept of brand
charter.
4. Have several different groups of students create a Brand Equity Report for the same
brand. Have them evaluate the differences and similarities in the reports’ designs and
their findings.
Page: 282
Learning Objective: Identify the steps in implementing a brand equity management
system.
AACSB: Analytic Skills
Question type: Group
Time to complete the exercise: 10-12 minutes
This activity may be carried out after the class is introduced to the concept of Brand
Equity Report.
1. Understanding what consumers believe, think, know and infer about a brand is critical to
building and managing brand equity.
2. The purpose of a brand equity measurement system is to provide timely, accurate and
actionable information that marketers can use in their tactical and strategic decision-
making.
3. To learn how consumers think, feel, and act toward brands and products so the
company can make informed strategic positioning decisions, marketers should first
conduct a brand audit.
4. The purpose of the brand inventory is to provide a current, comprehensive profile of
how all the products and services sold by a company are marketed and branded.
5. The brand exploratory is research directed to understanding what consumers think and
feel about the brand and act toward it in order to better understand sources of brand
equity as well as any possible barriers.
6. Brand tracking studies collect information from consumers on a routine basis over time,
usually through quantitative measures of brand performance on a number of key
dimensions that marketers can identify in the brand audit or other means.
7. Brand equity management systems involve the creation of a Brand Equity Charter and
Brand Equity Report, plus the development of senior management to oversee the
implementation of these tools.
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pysyvät melkein aina niissä maissa, jotka Jumala on heille
asuinpaikoiksi osoittanut. Ne, jotka aina lapsuudesta pitäin ovat
asuneet hyvin kylmässä maassa, eivät näet hevin voisi kestää sitä
kovaa kuumuutta, mikä vallitsee kääntöpiirien välillä, kun taas toiset,
jotka ovat syntyneet kääntöpiirien välillä, kammovat pakkasta vielä
enemmän.
»Niin, mutta rakas lapsi, eikö talvessa ole paljon sellaistakin, mikä
on kaunista ja hupaista?» kysyi isä. »Etkö esim. mielelläsi aja reellä?
Ja eikö ole ihanaa, kun lumi valkoisen kimmeltävänä ketoja
verhoo?»
»Ei, lapseni, sitä ei heillä ole», vastasi isä. »Kevät voi esiintyä
ainoastaan niissä maissa, joissa on talvi, ja joissa talven aikana puut
lakastuvat eli nukkuvat. Sitten, keväällä, saavat ne uutta mehua eli
mäihää, kuten sitä nimitetään, alkavat uudelleen kostua, ja kaikki
ympärillämme peittyy nyt nuoreen vihannuuteen. Me pidämme
keväästä niin paljon sen vuoksi, että kaikki silloin herää jälleen
eloon, ja sen vuoksi, että muuttolinnut, jotka jättivät meidät syksyllä,
silloin palaavat takaisin. Emme ole nähneet niitä koko pitkän talven
aikana; ne ovat meille sen vuoksi kahta vertaa rakkaammat, ja me
oikein ikävöimme sitä päivää, jolloin saamme ne takaisin. Jos ne
aina pysyisivät meidän luonamme, niin että ne aina olisivat
silmiemme edessä, niin vähät me niistä välittäisimme. Katso vaan
varpusia. Jos katselet varpusta tarkoin, niin huomaat, että sekin on
pienoinen, hyvin soma lintu; mutta me emme siitä välitä, syystä että
aina näemme sen läheisyydessämme kaiken vuotta. Pääskysistä
sitä vastoin iloitsemme.
»Miksi niin on, sitä en voi selittää teille; te olette vielä liian nuoret
voidaksenne oikein ymmärtää tämän asian. Sen kuitenkin tahdon
teille sanoa, ett’ei hyvin ohuessa ilmassa koskaan voi olla lämmin.
Sen vuoksi pysyy lumi sangen korkeilla vuorilla keskellä kuuminta
kesääkin. Siellä ei näet koskaan tule niin lämmin, että se voisi sulaa.
Niinpä esim. on maa, joka on Euroopassa, kaukana meistä, nimittäin
Sveitsi. Tässä maassa on tavattoman korkeita vuoria, joita
nimitetään Alpeiksi. Monella näistä vuorista pysyy lumi kaiken kesää
korkeimmilla huipuilla; ovatpa monet paikat kokonaan jään peitossa
ja nimitetään jäätiköiksi. Paistakoonpa nyt aurinko miten kuumasti
tahansa alhaalla laaksoissa, niin pysyy lumi kuitenkin edelleen noilla
korkeilla vuorilla juuri sen vuoksi, että ilma on niin ohutta, että vain
pieni osa lumesta sulaa suvella.»
»Siellä ulettuu siis, kuten äsken sanoin, lumiraja aina maahan asti.
Täällä tarvitsisi meidän, jos se muuten olisi mahdollista, nousta kaksi
tai kolmetuhatta jalkaa korkealle, ennen kun tulisimme paikkoihin,
joissa lumi pysyy suvellakin sulamatta. Kääntöpiirien välillä taas
täytyy vuoren olla vähintään viiden- tai kuudentoista tuhannen jalan
korkuisen, siis hyvin korkean, jotta lumi voi sillä pysyä sulamatta.
Frits empi vastata ja katsoi isään. Tämä oli jotakin, jota hän ei ollut
tullut ajatelleeksi.
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