STRATEGIC BRAND MANAGEMENT

MODULE-5
Measuring Brand Equity

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MODULE 5
Measuring Brand Equity:
Methods for measuring Brand EquityQualitative Techniques & Quantitative
Techniques, Comparative methods-Brand
based comparisons, Marketing based
comparisons-Conjoint Analysis, Holistic
methods.

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MEASURING SOURCES OF BRAND

EQUITY

There are 2 sources of Measuring

Brand equity
1. Qualitative research techniques.
2. Quantitative Research Techniques.

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Qualitative research techniques

Qualitative research techniques often identify

possible brand association & sources of brand
equity .
Qualitative research techniques are relatively
instructed measurement approaches that
permit a range of possible consumer
responses, because of the freedom afforded
both researchers in their probes and consumers
in their responses, qualitative research can
often be a useful first step in exploring
consumer brand and product perceptions.

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Types of Qualitative research

techniques

Free associations
Projective techniques
Zaltman Metaphor Elicitation Techniques
Brand personality & values
Experimental methods

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1. Free associations
Marketers use free associations tasks mainly to
identify the range of possible brand associations in
consumers minds but free association may also
provide some rough indication of the relative
strength, favorability and uniqueness of brand
associations.
It involves some questions

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?
The two main issues to consider in conducting free
association tasks are what types of probes to give data.

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2. Projective techniques

Indirect form of data collection.

Consumers might feel that it would be socially unacceptable to
express their true feelings
Diagnostic (problem solving , analytical ) tools to uncover
the true opinions and feelings of consumers when they are
unwilling or otherwise unable to express themselves on
these matters.
Marketers present consumers with an incomplete stimulus
and ask them to complete it, or they give consumers an
ambiguous stimulus and ask them to make sense of it. The
idea is that in the process consumers will reveal some of
their true beliefs and feelings, thus projective techniques
can be especially useful when deeply rooted personal
motivations or personally or socially sensitive subjects are
at issue.
Types of PT: Completion and interpretation tasks
Comparison tasks

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3. ZMET

Zaltman Metaphor Elicitation Technique (ZMET)

ZMET is a technique for eliciting(producing)
interconnected constructs that influence thought
and behavior.
One interesting new approach to better understand
how consumers view brands is the ZMET it is based
on a belief that consumers often have subconscious
motives for their purchasing behavior.
A ZMET study starts with a group of participants who are asked in
advance to think about the research topic at hand and select a minimum
of 12 images from their own sources that represent their thoughts and
feelings about the research topic.

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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
Vignette
ZMET is useful in understanding consumer images of
brands, products, companies , brand equity, product
concepts & design, product usage & purchase
experiences, life experience consumption context
and attitudes towards business

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4. Brand Personality and

Values
Brand personality refers to the human characteristics

1.
2.
3.
4.
5.

or traits that can be attributed to a brand.

The Big Five
Sincerity (down-to-earth, wholesome, and cheerful)
Excitement (daring, spirited, imaginative, and up-todate)
Competence (reliable, intelligent, and successful)
Sophistication (style, superiority ) (upper class and
charming)
Ruggedness (roughness, gentleness) (outdoorsy and
tough)

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5. 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 theyre doing when they are paged.

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Drawbacks of Qualitative
Techniques
The in-depth insight that emerge have to be
tempered by the realization that the sample are
often very small & may not necessarily generalize
the broader population.
It leads to obtain different conclusions.

Qualitative research techniques are a creative

means of ascertaining consumer perceptions that
may otherwise be difficult to uncover, the range of
possible qualitative research techniques is limited
only by the creativity of the marketing researcher.

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2. Quantitative Research
Techniques
QR typically employs various types of scale
question form which researcher can draw
numerical representation an summaries.
Types of QRT
1. Awareness
2. Image
3. Brand responses
4. Brand relationships

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Awareness
Recognition
Ability of consumers to identify the brand (and its elements) under
various circumstances
Brand recognition is especially important for packaging and some
marketing researchers have used creative means to assess the
visibility of package design
Recall
Ability of consumers to retrieve (get back, regain) the actual brand
elements from memory
Unaided vs. aided recall
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 mindsas reflected by brand recall performancecan
have profound implications for consumer choice and marketing
strategy.

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Image
One vitally important aspect of the brand is its image, as
reflected by the associations that consumers hold for it.
Ask open-ended questions to tap into the strength,
favorability, and uniqueness of brand associations. It
involves 2 considerations.
1. These associations should be rated on scales for
quantitative analysis.
2. Other approaches: a more complicated quantitative
techniques to assess overall brand uniqueness is
multidimensional scaling, or perceptual maps, MDS is a
procedure for determining the perceived relative images
of a set of objects such as product or brands, MDS
transforms consumer judgment of similarity or preference
into distance represented in perceptual space.

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Brand Responses
The purpose of measuring more general higher-level
considerations is to find out how consumer combine
all the more specific lower-level consideration about
the brand in their minds to form different types of
brand responses and evaluation.
To measuring brand equity with a combination of
four key brand response constructs:
1) Relative barrier or brand price
2) Brand quality perceptions
3) Brand purchase loyalty
4) Self-report future brand purchase trend

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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)

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Brand Relationships

1.
2.
3.
4.
5.
6.

Behavioral loyalty
Brand substitutability:
Other brand resonance dimensions: although
attitudinal attachment may require a fairly
straightforward set of question both sense of
community and active engagement could call for
more varied measures because of their more
diverse set of issues.
Fourniers Brand relationship Research: 6 facets of
Brand relationship quality
Interdependence
Self concept connection
Commitment
Love/ passion
Intimacy
Brand partner quality

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Comprehensive Models of CustomerBased Brand Equity

1.

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

2. Equity engines: This model delineates three key dimensions of brand

affinitythe emotional and intangible benefits of a brandas 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.

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MEASURING OUTCOMES OF BRAND

EQUITY

2 methods
1.Comparative Methods
2.Holistic Methods

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1. Comparative Methods

Comparative Methods are research studies

or experiments that examine consumer
attitudes and behavior toward a brand to
directly estimate the benefits arising form
having a high level of awareness and strong
favorable and unique brand associations.
It involves 3 techniques:
1. Brand-based comparative approaches
2. Marketing-based comparative approaches
3. Conjoint analysis

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Brand-Based Approaches
Competitive brand can be useful benchmarks in
brand-based comparative approaches, although
consumers may interpret marketing activity for a
fictitiously named or unnamed version of the product
or service in terms of their general product category
knowledge they may also have a particular brand.

The marketing element under consideration is fixed.

Consumer response is examined based on changes in brand
identification.
Example: Blind testing
Advantage: Isolates the value of the brand
Disadvantage: The totality of what is learned depends on how
many applications are examined.

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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

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Conjoint Analysis

A survey-based multivariate technique that enables

marketers to profile the consumer decision process
with respect to products and brands
Helps researchers determine the trade-offs
consumers make between brand attributes
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

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2. Holistic Methods
We use comparative methods to approximate
specific benefits of brand equity, holistic methods
place an overall value on the brand in either
abstract utility terms or concrete financial terms.
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
Holistic methods:
Residual approaches
Valuation approaches

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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..
2 types of RA:
1. Attribute perception Biased component
2. Non Attribute preference Biased component

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Valuation Approaches
Attempt to place a financial value on brand
equity for accounting purposes
Useful in cases of mergers and acquisitions,
brand licensing, fund raising, and brand
management decisions
Valuation approaches types:
Accounting background
Historical perspectives
General approaches
Interbrands brand valuation methodology

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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

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Historical Perspectives
In
Australia
Rupert
Murdochs
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.

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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

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Interbrands 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

Brand value calculation : Calculate the brand

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

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