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Defining BRAND EQUITY

FG - Brand Management – Chapter 2
 Learning
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Objectives
 1. Defining Brand Equity
 2. Measuring Brand Equity
 Brand
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Equity

 Brand equity principles

 Brandequity describes the value of having a well-known

brand name.
 Brand
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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
 Brand
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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
 Brand
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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.
 Brand
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Equity
 Negative brand equity
 Negativebrand equity might
happen if a company had a
major product recall or
caused a widely publicized
environmental disaster.
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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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Measurement

 Brand Equity can be measured at the

 Firm level
 Product level
 Consumer level
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Measurement
 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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Brands
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Measurement
 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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Measurement
 Product Level Measurement
 The difference in price, assuming all things equal, is due to
the brand.
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Measurement
 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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Measurement
 Consumer Level Measurement
 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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Measurement
 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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Measurement
 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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Measurement

 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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Measurement
 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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Measurement
 Brand Image Components
 Visual associations:

Golden Arches & Round shaped spectacles and a

Ronald stick
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Measurement
Positive Emotions and moods  Trendy
 Good
 “First” in things
 Safe
 Influential over
 Trust others
 Inspired  Efficient
 Belonging  Comfortable
 Admired  Generous
 Superior  Gratified
 Belonging  Pride
 Self-confident  Smart
 Express my personality  Imaginative
 Aesthetic  Enchantment
 Etc.
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Measurement
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Measurement
 Brand image
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Measurement
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Measurement
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Measurement
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Measurement
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Measurement
 Consumer Level Measurement

 Brandswith high levels of awareness and strong,

favorable and unique associations are high equity
brands.
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Measurement
 Importance of brand image
30 How to Measure Brand Equity
Brand Management
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Measurement
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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Measurement
 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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Measurement
 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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Measurement
 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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Measurement
 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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Measurement
 Example Aided Awareness
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Measurement
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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Measurement

 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?
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Measurement

 …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?
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Measurement
 2. Measuring Brand Association

 Example 2 – Brand Associations

 Which of the following attributes do you associate with [brand]?
 Affordable  Easy to Use
 Fun  Essential
 Safe  Powerful
 Dependable  Other Popular
 Modern  None of these
 Stylish
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Measurement
 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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Measurement
 Brand Personality
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Measurement
 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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Measurement
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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Measurement

1 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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Measurement
2 Recommendation

Are you willing to recommend brand X to relatives, friends

and colleagues?
 Very likely to not likely at all
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Measurement
3 Satisfaction

 Overall, how satisfied are you with brand X?

 Extremely satisfied to not satisfied
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Measurement
3. Satisfaction

Only very satisfied

customers (delighted)
are LOYAL