MFM II FBM IX-X

8/2/2019 MFM II FBM IX-X

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What is Brand Equity?Brand equity is a set of assets (and liabilities) linked to a

brand that adds to (or subtracts from) the value provided

by a product or service to a firms customers.

Components of Brand Equity are :Awareness

Perceived Quality

Brand Associations

Brand Loyalty

Proprietary Brand Assets like trademarks , patents ,

channel relationships


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Brand Equity Theories

1.Young and Rubicam Brand Assets

Valuator (Y& R BAV)2.Brand Equity Ten by David Aaker

3.Interbrand

4.CBBE


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Young and Rubicam Brand

Assets Valuator Differentiation (Point of difference , How is the brand

different from the rest of the world, What does it offerwhich others are not offering)

Relevance (Is it relevant to significant segment, does itattract a large customer base , house hold penetration)

Esteem (Quality perception )

Knowledge (What brand stands for, awareness ,recognition , recall)


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Differentiation

Shoppers Stop :Experience

Inorbit Mall: Multi Anchor Stores

Ferrari : Sports Car

Pearsons :Low price edition

Aaj Tak , India TV : Masala News

NDTV : Intellectual News

Bose : Audio quality


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Relevance

Medicine Brands (Band-Aid, Crocin , Glycodin ,etc)

Apparel Brands (Arrow , Peter England , etc)

Consumer Durable Brands (LG , Videocon , etc)

FMCG Brands (Brands of HLL, P&G , etc)

Food and Grocery (Kissan , Annapurna , etc)


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Esteem and Knowledge

High esteem and Low knowledge( LuxuryBrands, The Pioneer , The Statesman ,etc)

Low Esteem and High Knowledge (Masala NewsChannel , Mumbai Mirror , etc )

High Esteem and High Knowledge (Maruti ,Santro , Financial Newspaper , etc)

Low Esteem and Low Knowledge :Local Brand


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Brand Strength and Stature Brand Strength=Differentiation*Relevance

Brand Stature =Esteem *Knowledge


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Brand Equity

Brand Equity= Brand Strength +Brand Stature Assuming 100 consumers were interviewed on these 4

parameters to measure Brand equity of Lifebuoy Brand ofPersonal wash Soap

40 people said this Brand is same as other Germ fighting

Brand and 60 said its different from other competingBrands (differentiation =0.6) 90 people said this Brand has high relevance

(relevance=0.9) 80 people said they know what this Brand stands for

(Knowledge=0.8) 90 people considered it a high quality Brand

(Esteem=0.9) Brand Strength=0.6*0.9=.54 Brand Stature=0.8*0.9=.72 Brand Equity=1.26


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The Brand Equity Ten(David Aaker)

1. Loyalty Measures

2. Perceived Quality /

Leadership Measures

3. Associations /

Differentiation

Measures4. Awareness Measure

5. Market Behavior

Measures

1. Price Premium

2. Satisfaction

3. Perceived Quality

4. Leadership / Popularity

5. Differentiation

6. Brand Personality association

7. Organizational Associations

8. Brand Awareness

9. Market Share

10. Market Price &

Distribution Coverage


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Price Premiums How much more or less customers are willing to pay for X

Brand in comparison with another brand of similar productcategory.

This amount of money (+ or -)is called price premiumassociated .

Price premiums are of two types -:positive and negative.

Positive : Extra amount that a customer is willing to pay toavail a brand compare to another Brand

Negative : How much less for a brand is available compareto another brand before one switches brand.


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Satisfaction Perceptual gap (Dissatisfied, satisfied,

delighted)

Repeat Customer Loyal Customer

Advocacy

The brand is the only , one of the brands,among the available brands that customerbuys and uses


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Perceived quality /Leadership

Quality perception

Consistent high quality

The best , one of the best , one of the worst ,the worst

In comparison to other brands this brand is growing in popularity

Leader / Challenger / follower/Niche

Respected for Innovation


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Association /Differentiation

Perceived value :The brand is good Valuefor money ,Reason to buy this brand overothers.

Personality: Interesting , Image , History ,Culture

Organization: Which organization is thisbrand attached (Trust , Proud , admire ,

pleased) Differentiation


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Awareness Recall ( What brands of Mobile can you

recall)

Recognition(Have you heard of Kar LoDuniya Muthi Mein)

Top of mind(the first named brand inrecall list)

Brand dominance (the only brandrecalled)

Graveyard statistics (recall level of thosewho recognized it)

Brand salience ( you have an opinion

about the brand)


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Market Behaviour

Market Share Relative Market Price

Percent of stores carrying the Brand

Percent of people who have access tobrands


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Interbrands Interbrand, a UK based consulting co.

Criteria includes business prospects and

brands market environment, as well as

consumer perceptions

Brands evaluated on 7 criteria: Leadership (25%)

Stability (15%)

Market (10%) International (25%)

Trend (10%)

Support (10%)

Protection (05%)


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Brand Strength:This is calculated on the basis ofseven weighted factors:

FACTOR WEIGHT IMPLICATION

Leadership 25% Is the brand a market leader in market share?

Stability 15% Does the brand have stable market share?

Market 10% Is the market in which brand operates stable?

Geographic

spread

25% Is the brand an international brand?

Trend 10% What is the long-term future of the brand?

Support 10% Is the brand actively promoted and supported by the

company?

Protection 5% Is it adequately protected by trademarks?


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Interbrands A consultancy firm was given a task to derive

brand equity of three competiting brands using

Interbrands .The data collected for three brands

is as follows:

Calculate Brand equity of all three brands

Brand LS STB MKT INTL TREND SUPPORT

PROT

A MLeader STB VM MNC EXcell HighS PROTN

B MC STB VM MNC EX MedS PROTN

C MFollower USTB VM DM EX LowS PROTN


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CBBE

Consumer Based Brand Equity


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The 4 Fundamental Questions Who are you? (Brand Awareness)

What do you do? (Brand Knowledge)

What do I think about you? (Brand Attitude)

What about you and me? (Brand Relationship)


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Brand Attitude

Brand Judgments

Quality: Smirnoff

Credibility: Apple

Consideration: Sony

Superiority: Intel


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Brand Attitude

Brand Feelings

Warmth: Archies

Fun: Disney

Excitement: MTV

Security: SBI

Social Approval: Mercedes Self-Respect: RbK


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Customer Based Brand EquityPyramid

Identity -Who

are You

Meaning-What

are YouPOP, POD

Brand

Consumer

Resonance

Consumer

Judgement

Consumer

Feeling

Brand

Salience

BrandPerformance

BrandImagery

Response- What

about You

Relationship- What

about You and me


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CBBE for Amazon

Books, Music & VideosBRAND AWARENESS Books, Music & Videos

Conv., Variety, Low Prices

For Every Internet User

Conv., Variety, Low Prices

BRAND

KNOWLEDGE

For EveryInternet User

Good Value / Credibility

Smart ShopperBRAND ATTITUDE Smart Shopper

good Value /Credibility

Loyalty, Community,Engagement

BRAND RELATION Loyalty, Community,Engagement


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Brand Valuation

Cost-based approaches consider the costs associated withcreating the brand including research and development of theproduct concept, market testing, promotion, and product

improvement. The accumulated cost approach will determine thevalue of the brand as the sum of accumulated costs expended onthe brand to date. This method is the easiest to perform, as all thedata should be readily available.

Market-based approaches are based on the amount for which a

brand can be sold. The open market valuation is the highest valuethat a willing buyer and willing seller is prepared to pay for theasset.

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Book to Market The book-to-market approach is used to estimate the

value of a brand by subtracting its book value from itsmarket value.

Book value is calculated by adding a companys totalassets and subtracting liabilities and intangible assets.

Market value is open market valuation

Brand valuation using book to Market can be calculatedas follows:

bv = mb

Where, bv is brand value

m is market value, and

b is book value


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Gross-profit Differential Method In this method the value of a branded product is

obtained by calculating the difference betweenthe price of that product and the average priceof similar non-branded products.

It tries to identify the value that is added by thebrand to the product.

However this is only a measure of the brandsstrength in the market.

bv = (pn) x

Where, bv is Brand Value

p is the avg. price of a branded unit

n is the avg price of similar non-branded product

Documents

MFM II FBM IX-X