Brand equity and its measurement

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BRAND EQUITY AND ITS MEASUREMENT

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“A brand that captures your mind gains behavior. A brand that captures your heart gains commitment.” - Scott Talgo, Brand Strategist “Brand equity is the sum of all the hearts and minds of every single person that comes into contact with your brand." - Christopher Betzter, Brand Strategist .

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What is a brand? A brand is a distinguishing name and /or symbol such as logo, trade mark or package design, intended to identify the goods or services of one seller and to differentiate those goods or services from those of competitors.

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A unique neural network encoding an individual’s knowledge and experience of a product or service ,including the individual’s emotional associations with the brand. The ease of a access, richness and intensity of the network measures the strength and value of that brand to the individual.

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Brand Equity is a set of brand assets and liabilities linked to a brand , its name and symbol that add or subtract from the value provided by a product or service to the firm’s customers. Brand Equity, simply, means - the value of the brand.

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Hence , Brand equity means the difference in value perceived while the name of an established brand is mentioned against an unnamed /fictitiously named product to the customer or potential customer. Eg. The difference that is perceived by a house wife at the mention of a pressure cooker Hawkins pressure cooker .

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Approaches to measuring Brand Equity/value (a) Inside out approach-From the company angle . Brand Equity as a reflection of: Average sales and or profit over a period of time. Profit as a % of sales over a period of time and comparing with industry standards.

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Marketing cost incurred from the time of the brand’s introduction in the market. Price premiums which can be charged by a brand in comparison to competitors . (b)Stock market - share holder angle Stock price of a single brand firm. Market capitalization. Market capitalization - Replacement cost (Plant &Equipment, Inventory and cash) = Intangible assets. © Customer based approach- customer as value assessor

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Measuring Brand Equity Methods Cost based Historical cost method Replacement cost method. c. Discounting cash flow method. d. Inter brand method.

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2. Price based method Price premium method. Market share equalisation method. Price premium at indifference method . 3. Customer based method.

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Brand Price Mkt. share Rev. Equal. Value Value Colgate 48 30 1440 20 72 29 Pepsodent 50 35 1750 20 88 37 Close up 52 20 1040 20 52 21 Promise 40 5 200 20 10 4.5 Anchor 42 10 420 20 21 9

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Customer based brand equity involves the consumer’s reaction to an element of the marketing mix for the brand in comparison with their reactions to the same marketing mix attributed to a fictitiously named or unnamed version of the product or service.

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Brand Equity provide value to the customer by enhancing the customer’s : Interpretation /Processing of information. Confidence in purchase decision. Use satisfaction.

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Brand Equity provide value to the firm by enhancing: Efficiency and effectiveness of marketing programs Increasing brand loyalty Increasing price and price margins. Brand extension. Trade leverage.

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TOP 10 INDIAN BRANDS Colgate Vicks Lux Nokia Britannia Dettol Lifebuoy Pepsodent Pond’s Tata Tea

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A model for measuring Customer based Brand Equity?

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Brand awareness Perceived quality Brand Loyalty Brand Association Other Proprietary Brand assets Brand Equity Fig. Brand equity dimensions – model by David Aker

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Brand Awareness Brand Equity/Brand Knowledge Brand recognition Non Product related Attributes Product related Benefits Functional Experiential Symbolic Brand associations Favorability of brand association Strength of brand association Uniqueness of brand associations Brand Image Brand recall Attitude Fig: Dimensions of brand equity/ Brand Knowledge – model of Kevin Lane Keller .

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DIMENSIONS OF MEASURING BRAND EQUITY BRAND AWARENESS BRAND LOYALTY PERCEIVED QUALITY BRAND ASSOCIATIONS OTHE PROPRIETARY BRAND ASSETS .

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1. BRAND AWARENESS Awareness refers to the strength of a brand’s presence in the consumer’s mind. Brand awareness is the ability of the potential buyer to recognize or recall that a brand is a member of a certain product category.

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Levels of brand awareness Top Of the Mind (TOM) Brand recall Brand recognition. Unaware of the brand .

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Top of the mind Brand Recall Brand recognition Unaware of brand Fig. Pyramid of brand awareness

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Ricoh. Sony Canon Panasonic Lumix Pentax Philips Polaroid Casio Cobra Hitachi Kodak Kyocera Nikon Rollei Leica

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Brand/Dimension Canon Nikon Kodak Polaroid 1. Brand Awareness a. Top of the mind (10) 60 10 100 30 b. Unaided recall (7) 140 84 140 105 c. Aided recall – recognition (4) Unaware 80 80 80 80 Total score 280 174 320 215

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2. BRAND LOYALTY It is the tendency of the customer to buy the same brand again and again, by asking by its brand name.

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5 levels of loyalty Price sensitive,no brand loyalty Switchers/habitual buyers. Satisfied buyers- switching cost. Likes the brand. Commitment.

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Committed buyers Likes the brand/ considers it as a friend Satisfied buyer with switching costs Reasonably Satisfied/Habitual buyer Searching for reasons to change Heavy Switchers/price sensitive/ indifferent – No brand loyalty Fig. Pyramid of brand loyalty.

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Measuring Brand loyalty Behaviour measures Repurchase rate frequency of purchase over a period. % of purchase -what % of all the brand bought over a period was Pepsodent tooth paste. No. of brands purchased - how many other brands were bought during the above period.

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(b) Other measures . Finding switching costs. Measuring satisfaction. Liking of the brand. Commitment.

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3. PERCEIVED QUALITY Perceived quality can be defined as the customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose relative to alternatives.

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Perceived Quality dimensions Performance- Whirlpool semi automatic washing machine washes clothes whitest, rinses and dries clothes quickest. Features -The Sony VCR has one knob which has got both rewind and forward function. Conformance to specifications- Mitsubishi Lancer was voted in India as the car with least defects in 2000.

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Reliability - Kelvinator refrigerators are extermely reliable ones. Durability - Ambassador car/baja scooters are known for its durability. Serviceability - easy to service as well as the service system is easily accessible.- bajaj scooters, Maruti car. Fit and finish - Lady bird is a sleek lady’s bicycle.

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How will you measure Perceived Quality for the below given brands ? Fans - Polar, Khaitan, Usha, Orient, Padmini, Crompton Greaves . Tea - Kannan Devan, Mountain mist, Red label, Lipton, Tata tetley, 3 roses . Non stick pan - Prestiege,Hawkins, Nirlep, Nirala .

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4. BRAND ASSOCIATION Association (s) of a brand is/are ‘things’ elements/ factors/ events/ people, with which the brand is associated most.

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Associations of the brand can be most with Benefits Attributes Package Accessories Other brand elements- slogan,symbol, brand character,after sales service, guarantee etc.

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There can be other secondary associations like customers celebrity/personality Price Company Country of origin. Product class

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Some associations- Maggi - 2 minute Dettol - antisceptic, sword . Little heart biscuit – heart shaped, vaccum filled pack. Pepsi –blue, youth. Onida - devil Santro - Sharukh Khan, Zip drive. Surf- Lalithaji, High quality Toyota - Japan.

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How can associations be measured ? Identify the most important association ( Projective techniques) Word association Picture interpretation. Sentence completion. Experience sharing

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(B) Measuring the intensity of association Measure for : (a) Strength of association (b) Uniqueness of association © Favorability of association.

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(C) Humanizing the brand - Profiling the personality of the brand. BRAND PERSONALITY describes the brand as a human being in terms of: Physical characteristics Demographic characteristics. Personality traits .

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5. OTHER PROPRIETARY ASSETS David Aker feels that the 3 most important proprietary assets of a brand are: A. Name B. Slogan C. Symbol Measured for Attractiveness. Fit/effectiveness

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BPL - Believe in the best Videocon - The Indian Multinational. LG – Life’s good Samsung - Pioneering the digital path Philips – Let’s make things better Onida - Nothing but the truth. Sansui – Born in Japan. Entertaining the world.

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Brand/Dimension Cuticura Yardley Ponds Spinz 1. Brand Awareness a. Top of the mind 65 60 75 45 b. Unaided recall 55 40 60 30 c. Aided recall 45 40 45 25 2.Brand Loyalty a. Switching cost 75 55 70 45 b. Liking 80 65 75 55 c. Satisfaction 70 70 75 45 d. Commitment 65 80 80 55 3.Perceived Quality a. Performance 65 60 70 45 b. Features 70 70 75 50 c. Conformance with specifications 65 70 70 55 d. Reliability 70 80 65 50 e. Durability 65 70 60 45 f. Fit and finish 70 60 75 65 4. Brand Association a. Strength of association 70 65 80 50 b. Uniqueness of association 60 60 70 45 c. Favourability of association 75 65 70 50 5.Other Proprietary Assets a. Name 70 65 80 50 b. Logo 70 50 75 35 c. Slogan 60 55 65 40 Total score 1265 1180 1335 880 Note : All the dimensions except aided and unaided recall are allotted a maximum of 100 points. Unaided is allotted 70 points while aided recall is allotted 50 points. The detailed explanation regarding the computation of the points for each brand for its brand equity is beyond the scope of this study. Table 2: Customer-based Brand Equity Scores of a Few Brands of talcum powder

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Thank You .