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The most important assets of any business are intangible including its base of loyal customers, brands, symbols & slogans and the brands underlying image, personality, identity, attitudes, familiarity, associations and name awareness. These assets along with patents, trademarks, and channel relationships comprise brand equity, and are a primary source of competitive advantage and future earnings
Brand Equity
Brand equity is initially built by laying a foundation of brand awareness eventually forming positive brand images and is ultimately maximized by high levels of brand loyalty.
Brand Equity
Factors that Influences Brand Equity The following are the five major factors said by Aaker to influence the Brand Equity as Brand Equity (like company equity) is the set of brand assets and liabilities linked to a brand that adds or subtract from the brand value.
Aaker originally outlined five components of brand equity: 1. Name Awareness: Share of mind
Brand Equity
2. Perceived Quality: Seen as better / best fit for me (functionality, trust, long lasting) 3. Brand Loyalty: Enduring preference 4. Positive Associations: Sponsorships, admired people using the product, corporate citizenship. 5. Other Assets: Trade marks, exclusive channels, merchandising systems
Brand Equity
Brand Equity
Brand Awareness
Brand awareness refers to the strength of a brands presence in the consumers mind It is a measure of the percentage of the target market that is aware of a brand name. Marketers can create awareness among their target audience through repetitive advertising and publicity. Brand awareness can provide a host of competitive advantages for the marketer. These include the following Brand awareness renders the brand with a sense of familiarity. Name awareness can be a sign of presence, commitment and substance. The salience of a brand will decide if it is recalled at a key time in the purchasing process.
Brand Equity
Brand Awareness
Brand recognition: It related to consumers ability to confirm prior exposure to that brand when given the brand a cue. It requires that consumers can correctly discriminate the brand as having been previously seen or heard. Brand recall: Brand recall relates to consumers aptitude to retrieve the brand from memory given the product category, the needs fulfilled by the category or a purchase or usage situation as a cue. It requires consumers to correctly generate the brand from memory when given a relevant cue. Top-of-mind brand: This is the brand name that first comes to mind when a consumer is presented with the name of a product classification. Dominant Brand: The ultimate awareness level is brand name dominance, where in a recall task; most consumers can only provide the name of a single brand..
Brand Equity
Brand Loyalty
The Types of Loyalties are: Passive Loyal : buying out of habit Fence Sitters: Indifferent to two or more brands Committed: truly loyal to a brand
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There are many ways to measure a brand. Some measurements approaches are at the firm level, some at the product level, and still others are at the consumer level.
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Possibly the best example of the value contained within a company's brand is the Coca-Cola company, which in the first quarter of 2006 had a 21 percent brand equity as a percentage of market capital. In dollar value, this amounted to $20bn. PepsiCo is not far behind, with a 19 percent brand equity, amounting to $19bn of its market capital The Chairman of Sony put it well when he said : Our biggest assets is four letters: SONY
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PROTECTING core equity elements- those that are driving Market Share FIXING negative equity elements- which represent lost share ATTACKING competitors positive equity elementthat is neutralizing their Brand Advantages LEVERAGING competitors negative equity elementtaking full advantage of their weaknesses.
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If an equity element affects consumer perception of the product/ service, then customers belief should be altered by new product advertising or change in product design. If it is company perception affecting the customer, then corporate communication and improvement in service should impact the change.
Consumers feeling about themselves can be altered thro image advertising or product repositioning.
Cost-based approaches Market-based approaches Economic use or income-based approaches Formulary approaches Special situation approaches
The accumulated cost approach will determine the value of the brand as the sum of accumulated costs expended on the brand to date.
Formulary approaches consider multiple criteria to determine the value of a brand. While similar in certain respects to income-based or economic use approaches, they are included as a separate category due to their extensive commercial usage by consulting and other organizations.
Special situation approaches recognize that brand valuation can be related to particular circumstances that are not necessarily consistent with external or internal valuations. A strategic buyer is often willing to pay a premium above the market value . This may be a result of synergies that they are able to develop which other buyers may not be able to achieve. Each case has to be evaluated on individual merit, based on how much value the strategic buyer can extract from the market as a result of this purchase, and how much of this value the seller will be able to obtain from this strategic buyer.
Brand equity
you can measure performance in three core brand equity drivers: financial, strength, and consumer. Financial Brand Equity Metrics While financial metrics are always the first thing that executives want to see to confirm that a brand is profitable and should live to see another day, financial metrics should actually be the last part of the brand equity measurement process.
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Brand Equity
Thats because financial metrics result from the brand strength and consumer metrics described below. With that said, your financial brand equity metrics should gather the following data: Market share Price sensitivity Profitability Revenues Marketing investments Growth rate Cost to acquire new customers Cost to retain customers
Brand equity
Measuring brand strength should also be done on an ongoing basis. Following are some of the factors to track: Accessibility Awareness and knowledge of the brand Loyalty Licensing potential Retention Aided and unaided recall
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Brand Equity
Consumer Brand Equity Metrics Consumers build brands, not Companies. Therefore, its essential that you track consumer sentiment and behaviors related to your brand to get a complete understanding of brand equity. If consumers believe in a brand, it has far more equity than a brand that consumers dont care about or believe in. Use the following factors to track and measure consumer sentiment and behavior related to your brand: Relevance Emotional connections Differentiators Value Perceptions
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Interbrand determines the earnings from the brand and capitalizes them after making suitable adjustments. Interbrand takes the forcast profit and deducts a capital charge in order to determine the economic profit (EVA). Interbrand then attempts to determine the brands earnings by using the brand index. The brand index is based on seven factors. The factors as well as their weights are:
Market (10%) Whether the market is stable, growing and has strong barriers to entry. Stability (15%) Brands that have been established for a long time that constantly command customer loyalty. Leadership (25%) A brand that leads the sector that it competes in. Trend (10%) Gives an indication where the brand is moving. Support (10%) The support that the brand has received. Internationalization/Geography (25%) The strength of the brand in the international arena . Protection (5%) The ability of the company to protect the brand.
Differentiation (Point of difference , How is the brand different from the rest of the world, What does it offer which others are not offering) Relevance (Is it relevant to significant segment, does it attract a large customer base , house hold penetration,is it personally appropriate) Esteem (Quality perception, is it held in high regard ) Knowledge (What brand stands for, awareness , recognition , recall) Differentiator x relevance = brand strength Esteem x knowledge = brand stature
Brand Architecture
The brand architecture is the process of devising a plan that optimally accommodates all product brands within an organization. It is a way in which various products or sub brands in a company's portfolio can be differentiated and/or related to support one and other. Through the architecture, you can ensure that diverse products reflect the core brand image of the business or company. Example: The company Virgin, offers several services from transportation to cellular network all under the umbrella of the company brand name. In the above virgin example one of the core brand traits is reliability whether you are taking a Virgin train or using their cellular network.
Brand Architecture
Brand Architecture
Brand Architecture
Brand Architecture
Brand Architecture
Brand Architecture
Brand Architecture
There are 3 types of brand architecture:
Unitary/ Corporate: All the brands are marketed by the parent company bearing its corporate name Hybrid/endorsed: where all the brands are linked to the parent company thro visual or verbal endorsements
Diversified/Individual: Each brand is marketed individually with no reference to its parent company
Audience Diversity What are the target segments for your brand? Is the brand focused on just one audience or must it appeal to many? Brand Elasticity How far can each of the brands stretch to cover different products and markets? Harley Davidson made a classic blunder applying their brand to wine coolers. Product/Service Offerings How are other brands in the portfolio positioned and targeted? Are some of your brands complementary, competitive or incongruent? Competitive Context What are competitive branding practices? How do customers view the marketplace? Do your brands help you stand out and grab market share? Brand Equities Do you have brands with a particular following or a unique heritage or equity must be carried forward? Geographic Needs How consistent are needs/preferences across cultures and markets? Strong local brands might not work in other countries. Not every brand can travel.
Organizational Structures Who is accountable for branding practices and standards? What are the political realities behind brands in your portfolio? Ownership Does the organization have legal control over its brand? Youll have less leeway with licensed brands. Sources of Growth What businesses and brands are expected to drive future growth for your company? Are they helping you pursue your strategy? Purchase Criteria How do people buy your products? Do they ask for products by brand name or do they ask for a generic name or your company brand name? Do your brands make buying easier? How much do people want or need your brands? Brand Performance How do brands perform against desired attributes? Is their positioning clear and effective? Brand Role What is role of brand in fulfilling the business model? How important is the brand in driving awareness or creating loyalty? Channels What channels and distribution methods are available and how are they used across the brand portfolio?
Corporate Branding
Corporate branding is the practice of using a company's name as a product brand name. It is an attempt to use corporate brand equity to create product brand recognition. It is a type of family branding or umbrella brand. Corporate branding can result in significant economies of scope since one advertising campaign can be used for several products. It also facilitates new product acceptance because potential buyers are already familiar with the name. New products share the awareness of the established brand identity. However, this strategy may hinder the creation of distinct brand images or identities for different products: an overarching corporate brand reduces the ability to position a brand with an individual identity, and may conceal different products' unique characteristics.
Corporate Branding
Thanks to the digital revolution , as never before, people care about the corporation behind the product. They do not separate their opinions about the company from their opinions of that company's products or services. This blending of corporate and product/service opinions is due to increasing corporate transparency, which gives stakeholders a deeper, clearer view into a corporation's actual behavior and actual performance. EXAMPLES:BMW precedes the model number of each car to build every name (BMW X3, BMW Z4, BMW M5). The Virgin Group companies have Virgin at the beginning of every name (Virgin Atlantic, Virgin Balloon Flights, Virgin Megastore USA). SONY
Corporate Branding
Thanks to the digital revolution , as never before, people care about the corporation behind the product. They do not separate their opinions about the company from their opinions of that company's products or services. This blending of corporate and product/service opinions is due to increasing corporate transparency, which gives stakeholders a deeper, clearer view into a corporation's actual behavior and actual performance. EXAMPLES:BMW precedes the model number of each car to build every name (BMW X3, BMW Z4, BMW M5). The Virgin Group companies have Virgin at the beginning of every name (Virgin Atlantic, Virgin Balloon Flights, Virgin Megastore USA). SONY, PHILLIPS, SAMSUNG, LG
Corporate Branding
Corporate branding can be summed up as being driven by the organization of the fact that the organization itself, rather than its products, was playing an ever increasing role in the organisations differentiation and its relationship with its various stakeholders. Corporate branding : Louis vuitton, IBM , FEDEX express ( orange), FEDEX ground ( green), FEDEX freight ( red),, Disney, coca-cola, McDonalds,Nike , Bang n Olufsen
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The construction of names symbols and experiences which are perceived as unique o the organization and facilitate recognition and repetition. Central ideas belonging to the organization that reach out to all stakeholders- internal and external. One organization that stands for all products, services and other behaviours. The expression of promises of distinct quality,substance, emotion, style or experience which follow from interaction with the organization. The creation and re-creation of meaningful distinction towards OTHERS in the eye of the stakeholders.
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