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DEVELOPING A BRAND EQUITY MEASUREMENT AND

MANAGEMENT SYSTEM

Hunny Goyal (14)

Nilay Thakkar (51)

Parth Shah (44)

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The Brand Value Chain

Broader perspective than just theCBBE model

The brand value chain is a structured

approach to assessing the sourcesand outcomes of brand equity and the

manner by which marketing activities

create brand value.

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The Brand Value Chain

The brand value chain has severalbasic premises. Fundamentally, it

assumes that the value of a brand

ultimately resides with customers.

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The Brand Value Chain Based on this insight, the model next assumes that the brand

value creation process begins when the firm invests in a

marketing program targeting actual or potential customers. The marketing activity associated with the program then affects

the customer mindset with respect to the brandwhatcustomers know and feel about the brand.

This mindset, across a broad group of customers, then resultsin certain outcomes for the brand in terms of how it performs inthe marketplacethe collective impact of individual customeractions regarding how much and when they purchase, the pricethat they pay, and so forth.

Finally, the investment community considers this marketperformance and other factors such as replacement cost andpurchase price in acquisitions to arrive at an assessment ofshareholder value in general and a value of the brand inparticular.

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The Brand Value Chain The model also assumes that a number of linking factors

intervene between these stages.

These linking factors determine the extent to which value

created at one stage transfers or multipliesto the next stage.

Three sets of multipliers moderate the transfer between the

marketing program and the subsequent three value stages: the

program quality multiplier, the marketplace conditions multiplier,

and the investor sentiment multiplier.

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Brand Value Chain

Program

Multiplier

Marketing

Program

Investment

CustomerMindset

MarketPerformance

ShareholderValueVALUE

STAGES

- Product

- Communications

-Trade-Employee

- Other

- Awareness

- Associations

- Attitudes- Attachment

- Activity

- Price premiums

- Price elasticity

- Market share

- Expansion success

- Cost structure

- Profitability

- Stock price

- P/E ratio

- Market capitalization

Consumer

MultiplierFILTERS

-Clarity

-Relevance

- Distinctiveness

- Consistency

- Channel support

-Consumer size and profile

-Competitive reactions

-Market dynamics

-Growth potential

-Risk profile

-Brand contribution

Market

Multiplier

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Value Stages

Marketing program investmentAny 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

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Multipliers Program quality multiplier

The ability of the marketing program to affect customermindset

Must be clear, relevant, distinct, and consistent

Customer multiplier

The extent to which value created in the minds ofcustomers 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, growthpotential, risk profile, and brand contribution

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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 tacticaldecisions in the short run and strategic

decisions in the long run

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Brand Equity Measurement System

Conducting brand audits

Developing tracking procedures

Designing a brand equity management

system

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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

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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

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How to Conduct Tracking Studies

Who to track (target market)

When and where to track (how frequently)

How to interpret brand tracking

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Brand Equity Management System

A brand equity management systemis aset 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

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Brand Equity Charter

Provides general guidelines to marketingmanagers within the company as well as

key marketing partners outside the

company Should be updated annually

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Brand Equity Charter Components

Define the firms 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

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Brand Equity Report

Assembles the results of the trackingsurvey and other relevant performance

measures

To be developed monthly, quarterly, orannually

Provides descriptive information as to

what is happening with the brand as wellas diagnostic information on why it is

happening

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Brand Equity Report

In particular, one section of the reportshould summarize consumer perceptions

on key attribute or benefit associations,

preferences, and reported behavior asrevealed by the tracking study. Another

section of the report should include more

descriptive market level information suchas:

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Brand Equity Report

1) Product shipments and movementthrough channels of distribution.

2) Relevant cost breakdowns.

3) Price and discount schedules whereappropriate.

4) Sales and market share information

broken down by relevant factors, e.g.,geographic region, type of retail account

or customer, etc.

5) Profit assessments. 8.19

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Brand Equity Responsibilities

Organizational responsibilities andprocesses that aim to maximize long-term

brand equity

Establish position of VP or Director of EquityManagement 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 report8.20

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Internal Branding

Internal brand management makes sure that employees and

partners appreciate and understand basic branding notions and

how these can affect the equity of the brands that they are

working with. The ultimate goal is to make everyone in the

organization, from the CEO to the trainees, to become

passionate brand advocates. This can be achieved, according

to Davis, by following a threestep course: Hear It, Believe It,Live It. To get employees to live the brand.

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Brand Assimilation Process-Scott Davis

Principle 1: Make the Brand Relevant

Principle 2: Make the Brand AccessiblePrinciple 3: Reinforce the Brand Continuously

Principle 4: Make Brand Education an Ongoing Program

Principle 5: Reward On-Brand Behaviors

Principle 6: Align Hiring Practices

8.22