Module 6: Developing Brand Equity Measurement and Management PDF

MODULE 6 Developing Brand Equity Measurement and Management System and Measuring Sources of Brand Equity – Part 1 LEARNING OBJECTIVES: At the end of the unit, the student should be able to: 1. Describe the new accountability 2. Define the brand value chain diagram and its components 3. Explain br...

MODULE 6 Developing Brand Equity Measurement and Management System and Measuring Sources of Brand Equity – Part 1 LEARNING OBJECTIVES: At the end of the unit, the student should be able to: 1. Describe the new accountability 2. Define the brand value chain diagram and its components 3. Explain brand equity measurement system 4. Expound the brand equity management system and its components Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 2 DISCUSSION: Why is there a need to communicate your product? How do you communicate? What channel are you going to use? What should be included in your message?  THE NEW ACCOUNTABILITY Virtually every marketing dollar spent today must be justified as both effective and efficient in terms of “return of marketing investment” (ROMI). Some observers believe that up to 70% (or even more) of marketing expenditures may be devoted to programs and activities that cannot be linked to short-term incremental profits, but yet can be seen as improving brand equity Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 4  THE BRAND VALUE CHAIN Broader perspective than just the CBBE model The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value. Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 5  THE BRAND VALUE CHAIN Marketing Customer Market Shareholder VALUE Program Mindset Performance Value STAGES Investment - Price premiums - Product - Awareness - Stock price - Price elasticity - Communications - Associations - P/E ratio - Market share - Trade - Attitudes - Market capitalization - Expansion success - Employee - Attachment - Cost structure - Other - Activity - Profitability Program Consumer Market FILTERS Multiplier Multiplier Multiplier - Clarity - Channel support - Market dynamics - Relevance - Consumer size and profile - Growth potential - Distinctiveness - Competitive reactions - Risk profile Ian Jade E. Lozada, MBA College of Business and Accountancy - Consistency - Brand contribution Central Philippine University 6  VALUE STAGES Marketing program investment Any marketing program that can be attributed to brand value development Customer mindset In what way have customers been changed as a result of the marketing program? Market performance How do customers respond in the marketplace? Shareholder value Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 7  MULTIPLIERS Program quality multiplier The ability of the marketing program to affect customer mindset Must be clear, relevant, distinct, and consistent Customer multiplier The extent to which value created in the minds of customers affects market performance It depends on factors such as competitive superiority, channel support, and customer size and profile Market multiplier The extent to which the value generated through brand market performance is manifested in shareholder value It depends on factors such as market dynamics, growth potential, risk profile, and brand contribution Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 8  BRAND EQUITY MEASUREMENT SYSTEM A set of research procedures that is designed to provide timely, accurate, and actionable information for marketers so that they can make the best possible tactical decisions in the short run and strategic decisions in the long run Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 9  BRAND EQUITY MEASUREMENT SYSTEM Conducting brand audits Developing tracking procedures Designing a brand equity management system Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 10  BRAND AUDIT Externally, consumer-focused assessment A comprehensive examination of a brand involving activities to assess the health of the brand, uncover its sources of equity, and suggest ways to improve and leverage that equity It includes brand vision, mission, promise, values, position, personality, and performance Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 11  IMPORTANCE OF BRAND AUDITS Understand sources of brand equity Firm perspective Consumer perspective Set strategic direction for the brand Recommend marketing programs to maximize long-term brand equity Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 12  BRAND AUDIT STEPS a. Brand inventory (supply side) b. Brand exploratory (demand side) Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 13  A. BRAND INVENTORY A current comprehensive profile of how all the products and services sold by a company are branded and marketed: Brand elements Supporting marketing programs Profile of competitive brands POPs and PODs Brand mantra Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 14  A. BRAND INVENTORY (CONT.) Suggests the bases for positioning the brand Offers insights to how brand equity may be better managed Assesses consistency in message among activities, brand extensions, and sub-brands in order to avoid redundancies, overlaps, and consumer confusion Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 15  B. BRAND EXPLORATORY Provides detailed information as to how consumers perceive the brand: Awareness Favorability Uniqueness of associations Helps identify sources of customer-based brand equity Uncovers knowledge structures for the core brand as well as its competitors Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 16  SUGGESTED BRAND AUDIT OUTLINE Brand audit objectives, scope, and approach Background about the brand (self-analysis) Background about the industries Consumer analysis (trends, motivation, perceptions, needs, segmentation, behavior) Brand inventory Elements, current marketing programs, POPs, PODs Branding strategies (extensions, sub-brands, etc.) Brand portfolio analysis Competitors’ brand inventory Ian Jade E. Lozada, MBA Strengths and weaknesses College of Business and Accountancy Central Philippine University 17  SUGGESTED BRAND AUDIT OUTLINE (CONT) Brand exploratory Brand associations Brand positioning analysis Consumer perceptions analysis (vs. competition) Summary of competitor analysis SWOT analysis Brand equity evaluation Ian Jade E. Lozada, MBA Strategic brand management recommendations College of Business and Accountancy Central Philippine University 18  DESIGNING BRAND TRACKING STUDIES Tracking studies involve information collected from consumers on a routine basis over time Often done on a “continuous” basis Provide descriptive and diagnostic information Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 19  WHAT TO TRACK? Customize tracking surveys to address the specific issues faced by the brand Product-brand tracking Corporate or family brand tracking Global tracking Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 20  HOW TO CONDUCT TRACKING STUDIES Who to track (target market) When and where to track (how frequently) How to interpret brand tracking Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 21  BRAND EQUITY MANAGEMENT SYSTEM A brand equity management system is a set of organizational processes designed to improve the understanding and use of the brand equity concept within a firm: Brand equity charter Brand equity report Brand equity responsibilities Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 22  BRAND EQUITY CHARTER Provides general guidelines to marketing managers within the company as well as key marketing partners outside the company Should be updated annually Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 23  BRAND EQUITY CHARTER COMPONENTS Define the firm’s view of the brand equity Describe the scope of the key brands Specify actual and desired equity for the brand Explain how brand equity is measured Suggest how brand equity should be measured Outline how marketing programs should be devised Specify the proper treatment for the brand in terms of trademark usage, packaging, and communication Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 24  THE KNICKS BRAND CHARTER The Knicks The Fans Emotional Bond Sensory fulfillment Uniquely authentic An intensely passionate, –Looks, feels, and sounds professional, unparalleled New Visceral thrill An incomparable event, scene and York City experience energy – Eager anticipation/excitement Relentless, resourceful, and tough – War: winning/losing Psychological benefits Championship caliber – Personal identification (with heroes) A vital part of New York City – Social currency/belonging Unlimited in its possibilities Emotional awards – Intense experience – Childhood Ian Jade E. Lozada, MBA – Sustaining College of Business and Accountancy Central Philippine University – Exceeds 25  BRAND EQUITY REPORT Assembles the results of the tracking survey and other relevant performance measures To be developed monthly, quarterly, or annually Provides descriptive information as to what is happening with the brand as well as diagnostic information on why it is happening Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 26  BRAND EQUITY RESPONSIBILITIES Organizational responsibilities and processes that aim to maximize long-term brand equity Establish position of VP or Director of Equity Management to oversee implementation of Brand Equity Charter and Reports Ensure that, as much as possible, marketing of the brand is done in a way that reflects the spirit of the charter and the substance of the report Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 27  QUALITATIVE RESEARCH TECHNIQUES Free association What do you like best about the brand? What are its positive aspects? What do you dislike? What are its disadvantages? What do you find unique about the brand? How is it different from other brands? In what ways is it the same? Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 28  FREE ASSOCIATIONS ATTRIBUTES User Imagery Usage Imagery Western, American, Product-Related blue collar, hard-working, Appropriate for outdoor Blue denim, shrink-to-fit traditional, strong, work and casual social cotton fabric, button-fly, rugged, and masculine situations two-horse patch, Brand Personality and small red pocket tag Honest, classic, LEVI’S Contemporary, approachable, independent, and universal 501 High quality, long lasting, and durable Feelings of self-confidence and self-assurance Functional Comfortable fitting and relaxing to wear Symbolic Experiential Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University BENEFITS 29  QUALITATIVE RESEARCH TECHNIQUES Projective techniques Diagnostic tools to uncover the true opinions and feelings of consumers when they are unwilling or otherwise unable to express themselves on these matters Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 30  PROJECTIVE TECHNIQUES Consumers might feel that it would be socially unacceptable to express their true feelings Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers Examples: Completion and interpretation tasks Comparison tasks Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 31  NEW APPROACH: ZMET Zaltman Metaphor Elicitation Technique (ZMET) ZMET is “a technique for eliciting interconnected constructs that influence thought and behavior.” Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 32  ZMET The guided conversation consists of a series of steps that includes some or all of the following: Story telling Missed images Sorting task Construct elicitation The most representative picture Opposite images Sensory images Mental map Summary image Ian Jade E. Lozada, MBA Vignette College of Business and Accountancy Central Philippine University 33  IDENTIFYING KEY BRAND PERSONALITY ASSOCIATIONS BUSH KERRY Coffee Dunkin’ Donuts Starbucks Technology IBM Apple Auto Ford BMW Retail Kmart Target Fast Food McDonald’s Subway 2004 U.S. presidential election, random sample of undecided voters Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 34  EXPERIENTIAL METHODS By tapping more directly into their actual home, work, or shopping behaviors, researchers might be able to elicit more meaningful responses from consumers. Advocates of the experiential approach have sent researchers to consumers’ homes in the morning to see how they approach their days, given business travelers Polaroid cameras and diaries to capture their feelings when in hotel rooms, and conducted “beeper studies” in which participants are instructed to write down what they’re doing Ian Jade E. Lozada, MBA when they are paged. College of Business and Accountancy Central Philippine University 35  QUANTITATIVE RESEARCH TECHNIQUES Awareness Image Brand responses Brand relationships Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 36  AWARENESS Recognition Ability of consumers to identify the brand (and its elements) under various circumstances Recall Ability of consumers to retrieve the actual brand elements from memory Unaided vs. aided recall Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 37  AWARENESS Corrections for guessing Any research measure must consider the issue of consumers making up responses or guessing. Strategic implications The advantage of aided recall measures is that they yield insight into how brand knowledge is organized in memory and what kind of cues or reminders may be necessary for consumers to be able to retrieve the brand from memory. The important point to note is that the category structure that exists in consumers’ minds—as reflected by brand recall performance—can have profound implications for consumer choice and marketing Ian Jade E. Lozada, MBA strategy. College of Business and Accountancy Central Philippine University 38  IMAGE Ask open-ended questions to tap into the strength, favorability, and uniqueness of brand associations. These associations should be rated on scales for quantitative analysis. Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 39  BRAND RESPONSES Research in psychology suggests that purchase intentions are most likely to be predictive of actual purchase when there is correspondence between the two in the following categories: Purchase Intentions Action (buying for own use or to give as a gift) Target (specific type of product and brand) Context (in what type of store based on what prices and other conditions) Time (within a week, month, or year) Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 40  BRAND RELATIONSHIPS Behavioral loyalty Brand substitutability Other brand resonance dimensions For example, in terms of engagement, measures could explore word-of-mouth behavior, online behavior, and so forth in depth Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 41  COMPREHENSIVE MODELS OF CUSTOMER-BASED BRAND EQUITY Brand dynamics Equity engines Young & Rubicam’s Brand Asset Valuator (BAV) Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 42  BRAND DYNAMICS The Brand Dynamics model adopts a hierarchical approach to determine the strength of relationship a consumer has with a brand. The five levels of the model are: Presence Relevance Performance Advantage Bonding Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 43  EQUITY ENGINES This model delineates three key dimensions of brand affinity—the emotional and intangible benefits of a brand—as follows: Authority: The reputation of a brand, whether as a long-standing leader or as a pioneer in innovation Identification: The closeness customers feel for a brand and how well they feel the brand matches their personal needs Approval: The way a brand fits into the wider social matrix and the intangible status it holds for experts and friends Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 44  YOUNG & RUBICAM’S BRAND ASSET VALUATOR (BAV) There are five key components of brand health in BAV—the five pillars. Each pillar is derived from various measures that relate to different aspects of consumers’ brand perceptions and that together trace the progression of a brand’s development. a. Differentiation b. Energy c. Relevance d. Esteem Ian Jade E. Lozada, MBA e. Knowledge College of Business and Accountancy Central Philippine University 45  BRAND ASSET VALUATOR (BAV) 240,000+ consumers Up to 181 categories 137 studies 40 countries 8 years 56 different brand metrics Common methodology Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 46  HOW BRANDS ARE BUILT Four Primary Aspects Knowledge The culmination of brand building efforts; acquisition of consumer experience Esteem Consumer respect, regard, reputation; a fulfillment of perceived consumer promise Relevance Relates to usage and subsumes the five Ps of marketing; relates to sale Differentiation The basis for consumer choice; the essence of the brand, source of margin Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 47  HEALTHY BRANDS HAVE GREATER DIFFERENTIATION THAN RELEVANCE 100 D>R 90 80 Examples: 70 60 Harley Davidson 50 Yahoo! 40 AOL 30 Williams-Sonoma 20 Ikea 10 Bloomberg Business News 0 Differentiation Relevance Room to grow... Ian Jade E. Lozada, MBA College of Business and Accountancy Brand has power to build relevance. Central Philippine University 48  BRANDS WITH GREATER RELEVANCE THAN DIFFERENTIATION ARE IN DANGER OF BECOMING COMMODITIES 100 R>D 90 80 Examples: 70 60 Exxon 50 Mott’s 40 McDonald’s 30 Crest 20 Minute Maid 10 Fruit of the Loom 0 Peter Pan (peanut butter) Differentiation Relevance Uniqueness has faded; price becomes dominant reason to Ian Jade E. Lozada, MBA College of Business and Accountancy buy. Central Philippine University 49  MORE ESTEEM THAN KNOWLEDGE MEANS, “I’D LIKE TO GET TO KNOW YOU BETTER” 100 E>K 90 80 Examples: 70 60 Coach leatherwear 50 Tag Heuer 40 Calphalon 30 Movado 20 Blaupunkt 10 Pella Windows 0 Palm Pilot Esteem Knowledge Technics Ian Jade E. Lozada, MBA Brand is better liked than known. College of Business and Accountancy Central Philippine University 50  TOO MUCH KNOWLEDGE CAN BE DANGEROUS: “I KNOW YOU AND YOU’RE NOTHING SPECIAL” 100 K>E 90 80 Examples: 70 Plymouth 60 TV Guide 50 Spam 40 Woolworths 30 Chrysler 20 Maxwell House 10 National Enquirer 0 Sanka Esteem Knowledge Ian Jade E. Lozada, MBA Brand is better known than liked. College of Business and Accountancy Central Philippine University 51  A TWO-DIMENSIONAL FRAMEWORK FOR DIAGNOSING BRANDS: THE POWER GRID BrandAsset® Valuator Brand Strength Brand Stature Differentiation Relevance Esteem Knowledge Leading Lagging Ian Jade E. Lozada, MBA College of Business and Accountancy Central Philippine University 52  COMMONALTY BETWEEN THE BASIC BAV MODEL AND THE CBBE FRAMEWORK BAV’s knowledge relates to CBBE’s brand awareness and familiarity. BAV’s esteem relates to CBBE’s favorability of brand associations. BAV’s relevance relates to CBBE’s strength of brand associations (as well as perhaps favorability). BAV’s energy relates to CBBE’s favorability of associations. BAV’s differentiation relates to CBBE’s uniqueness Ian Jade E. Lozada, MBA College of Business and Accountancy of brand associations. Central Philippine University 53  ASSIGNMENT: Activity 1. DEFINITION OF TERMS (20 points). Define the following business terms in one to three sentences. You may use the Module 4 PPT or reliable websites from the internet as your basis in providing their respective definitions and remember to paraphrase. 1. Marketing Communications 2.Current brand knowledge 3. Integrated Marketing Communications 4. Advertising 5. Event Marketing 6. Ideal Ad Campaign 7. Personal selling 8. Public relations and publicity 9. Promotions 10. Place 54