Presentation On

Brand Management
MKT 460
Course Instructor:
Mohammed Saiful Islam
School Of Business,
ADUST.

Prepared by :
Nazmul Haque
Id # 073-023-
431
Nasimul Haque (Sunny)
Id # 091-073-
431
Ahsan Kabir
Id # 091-072-
431
Shahinur Islam
Id # 073-008-431
Anwarul Kabir
 Chapter:10
Measuring Outcomes of Brand Equity:
Capturing Market Performance
 Measuring Brand Equity

 Multi-dimensional concept.
 Many different measures required.
 The ultimate value of a brand depends on the
underlying components of brand knowledge
and sources of brand equity.
 Comparative Methods

Comparative methods involve experiments

that examine consumer attitudes and behavior
towards a brand to more directly estimate the
benefits arising from having a high awareness
and a positive brand image.
 Comparative Methods

There are two types of comparative methods.

 Brand-based comparative approaches.
 Marketing-based comparative approaches.
Conjoint analysis:
conjoint analysis is a technique that, in effect
combines the two approaches.
 Brand-Based Approaches
 The marketing element under consideration is fixed.
 Consumer response is examined based on changes in
brand identification.
 Application example: Blind testing.
 Advantage: Isolates the value of the brand.
 Disadvantage: The totality of what is learned
depends on how many applications are examined.
 Marketing-Based Approaches

 The brand is held fixed and consumer response is

examined based on changes in marketing
programs.
 Applications: Explore price premiums’ effect on
switching, consumer evaluations of marketing
activities, brand extensions, etc.
 Advantage: Ease of implementation.
 Disadvantage: Difficult to determine whether
consumer responses are caused by brand
knowledge or generic product knowledge.
 Conjoint Analysis
 A survey-based multivariate technique that enables
marketers to profile the consumer decision process
with respect to products and brands.
 Applications: Assess advertising effectiveness and
brand value; analyze brand/price trade-off.
 Advantage: Allows for different brands or different
aspects of the product to be analyzed
simultaneously.
 Disadvantage: May violate consumers’ expectations
based on what they already
know about brands.
 Holistic Methods

 Attempt to place an overall value on the brand in

either abstract utility terms or concrete financial
terms.
 Net out various considerations to determine the
unique contribution of the brand.
 There are two approach of Holistic methods.
 Residual approaches.
 Valuation approaches.
 Residual Approaches

 Examine the value of the brand by subtracting

consumers’ preferences based on physical product
attributes alone from their overall brand preferences.
 Advantage: Useful benchmark for interpreting brand
equity, especially from a financially oriented
perspective.
 Disadvantage: Static view. Limited diagnostic value
for strategic decision making.
 Valuation Approaches

 Attempt to place a financial value on brand equity for

accounting purposes.

 The ability to put a specific price tag on a brands

value may be useful for a number of reasons.
 Mergers and acquisitions: Both to evaluate possible
purchases as well as to facilitate disposal.
 Valuation Approaches
 Brand licensing: Internally for tax reasons and to
third parties.

 Fund raising: As collateral on loans or for sale or

leaseback arrangements.

 Brand management decisions: To allocate resources,

develop brand strategy, or prepare financial reports.
 Valuation Approaches

Financial Value of a brand

 Accounting background.
 Historical perspectives.
 General approaches.
 Inter-brand’s brand valuation methodology.
 Accounting Background

 Intangible assets are typically lumped under the

heading of goodwill and include things such as
patents, trademarks, and licensing agreements, as
well as “softer” considerations such as the skill of
the management and customer relations.
 In an acquisition, the goodwill item often includes a
premium paid to gain control, which, in certain
instances, may even exceed the value of tangible
and intangible assets.
 Historical Perspectives
 In Australia Rupert Murdoch’s News Corporation
included a valuation of some of its magazines on
its balance sheets in 1984.
 British firms used brand values primarily to boost
their balance sheets.
 In the United States, generally accepted
accounting principles (blanket amortization
principles) mean that placing a brand on the
balance sheet would require amortization of that
asset for up to 40 years. Such a charge would
severely hamper firm profitability; as a result,
firms avoid such accounting maneuvers.
 General Approaches

 In determining the value of a brand in an

acquisition or merger, firms can choose from three
main approaches.
 Cost approach: Brand equity is the amount of
money that would be required to reproduce or
replace the brand.
 Market approach: The present value of the future
economic benefits to be derived by the owner of
the asset.
 Income approach: The discounted future cash flow
from the future earnings stream for the brand.
 Brand valuation Model
Market Segments

Financial Demand Competitive

Analysis Drivers Benchmarking

Intangible Role of Brand

Earning Branding Strength

Brand Brand
Earnings Discount Rate

Brand value
 Inter-brand’s Brand Valuation

 Assumes that brand value is the present worth of

the benefits of future ownership.

 Follows five valuation steps:

 Market segmentation.
 Financial (role of branding) analysis.
 Demand (brand strength) analysis.
 Competitive benchmarking.
 Brand value calculation.
 Inter-brand’s Brand Valuation
 Market segmentation: Split the consumer market for the
brand into no overlapping and homogenous groups of
consumers according to applicable.

 Financial (role of branding) analysis: Identify and forecast

revenues and earnings from intangibles generated by the
brand for each of the distinct segments determined in step.

 Demand (brand strength) analysis: Assess the role that the

brand plays in driving demand for products and services in
the markets in which it operates.
 Inter-brand’s Brand Valuation
 Competitive benchmarking: Determine the competitive
strengths and weaknesses of the brand. A specific brand
discount Rate that reflects the risk profile of its expected
future earning is derived via a ‘Brand Strengths Score’.

 Brand value calculation : Calculate the brand value as the

net present value (NPV) of the forecast brand earnings,
discounted by the brand discount rate.