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CHAPTER 8:DEVELOPING A BRAND EQUITY

MEASUREMENT AND MANAGEMENT

SYSTEM

8.1

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8.2

The New Accountability

Virtually every marketing dollar spent today must be justified as both effective and efficientin terms of return of marketing investment

(ROMI).Some observers believe that up to 70% (or evenmore) of marketing expenditures may bedevoted to programs and activities that cannotbe linked to short-term incremental profits, butyet can be seen as improving brand equity.

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8.3

The Brand Value Chain

Broader perspective than just the CBBE model The brand value chain is a structured approachto assessing the sources and outcomes of brandequity and the manner by which marketing activities create brand value.

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Brand Value Chain

ProgramMultiplier

MarketingProgram

Investment

Customer Mindset

MarketPerformance

Shareholder ValueVALUE

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 Multiplier FILTERS

- Clarity- Relevance- Distinctiveness- Consistency

- Channel support- Consumer size and profile- Competitive reactions

- Market dynamics- Growth potential- Risk profile- Brand contribution

MarketMultiplier

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8.5

Value Stages

Marketing program investment Any marketing program that can be attributed tobrand value development

Customer mindsetIn what way have customers been changed as a resultof the marketing program?

Market performanceHow do customers respond in the marketplace?

Shareholder value

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8.6

MultipliersProgram quality multiplier

The ability of the marketing program to affect customermindsetMust be clear, relevant, distinct, and consistent

Customer multiplier The extent to which value created in the minds of customersaffects market performanceIt depends on factors such as competitive superiority, channelsupport, and customer size and profile

Market multiplier The extent to which the value generated through brand marketperformance is manifested in shareholder valueIt depends on factors such as market dynamics, growthpotential, risk profile, and brand contribution

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8.7

Brand Equity Measurement System

A set of research procedures that is designedto provide timely, accurate, and actionableinformation for marketers so that they can makethe best possible tactical decisions in the shortrun and strategic decisions in the long run

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8.8

Brand Equity Measurement System

Conducting brand auditsDeveloping tracking proceduresDesigning a brand equity management system

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8.9

Designing Brand Tracking Studies

Tracking studies involve information collectedfrom consumers on a routine basis over time

Often done on a continuous basis Provide descriptive and diagnostic information

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8.10

What to Track

Customize tracking surveys to address thespecific issues faced by the brandProduct-brand tracking Corporate or family brand tracking Global tracking

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8.11

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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8.12

Brand Equity Management System

A brand equity management system is a set of organizational processes designed to improvethe understanding and use of the brand equity

concept within a firm:Brand equity charterBrand equity report

Brand equity responsibilities

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8.13

Brand Equity Charter

Provides general guidelines to marketing managers within the company as well as key marketing partners outside the company

Should be updated annually

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8.14

Brand Equity Charter Components

Define the firms view of the brand equity Describe the scope of the key brandsSpecify actual and desired equity for the brand

Explain how brand equity is measuredSuggest how brand equity should be measuredOutline 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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8.15

Brand Equity Report

Assembles the results of the tracking survey andother relevant performance measures

To be developed monthly, quarterly, or annually Provides descriptive information as to what ishappening with the brand as well as diagnosticinformation on why it is happening

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8.16

Brand Equity Responsibilities

Organizational responsibilities and processesthat aim to maximize long-term brand equity Establish position of VP or Director of Equity

Management to oversee implementation of BrandEquity Charter and Reports

Ensure that, as much as possible, marketing of

the brand is done in a way that reflects the spiritof the charter and the substance of the report