CHAPTER 8: DEVELOPING A BRAND EQUITY MEASUREMENT AND MANAGEMENT SYSTEM Lecturer: Md Shahedur Rahman
The New Accountability • Virtually every marketing dollar spent today must be justified as both effective and efficient in terms of “return of marketing investment” (ROMI).
Truth !! • Hardly any marketing professional who is not worried about what return will a specific campaign bring about. • Some observers believe that up to 70% (or even more) of marketing expenditures may be devoted to programs and activities that cannot be linked to short-term incremental profits, but yet can be seen as improving brand equity.
The Brand Value Chain • Broader perspective than just the CBBE model • The brand value chain is a structured approach to assessing the sources and outcomes of brand equity • Which marketing activities create brand value?
Value Stages • Marketing program investment • Any 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?
Value Stages • Market performance • How do customers respond in the marketplace? • Shareholder value
Multipliers • Program quality multiplier • The ability of the marketing program to affect customer mindset • Must be clear, relevant, distinct, and consistent
Program quality multiplier • Clarity • Did consumers understand the marketing program? • Do consumers properly interpret and evaluate its meaning? • Relevance • Is the marketing program meaningful to the consumer? • Do consumers feel the brand is one they should seriously consider? • Distinctiveness • How unique is the marketing program? • How creative or differentiating it is? • Consistency • How well integrated is the marketing program? Is the brand evolving in the right direction?
Multipliers • Customer multiplier • The extent to which value created in the minds of customers affects market performance • It depends on factors such as competitive superiority, channel support, and customer size and profile
Competitive superiority • How effective are the marketing investments of competing brands? (Juivs Parachute) • How strongly have competitors affected customer mindset? • Are their brand equity stronger? • Channel and other intermediary support • How much selling effort is being put forth by various channel partners? • Are retailers helping to sell your brand? • Are distributors motivated to lift your product? Channel conflict? • Customer size and profile • How many and what types of customers are attracted to the brand? • Are they profitable? (toothpaste being launched under magic when only 2% of the consumers every year shift from toothpowder category to toothpaste).
Multipliers • 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, growth potential, risk profile, and brand contribution
Market dynamics • Dynamics of financial market (Investors sentiment) • Growth potential • Prospect of the brand, prospect of the industry, Analyze the micro/micro environment. (External Opportunities). • Risk profile • Risk profile for the brand? (External threats). • Brand contribution • How important is the brand as part of the firms brand portfolio?
Brand Equity Measurement System • A set of research procedures that is designed • To provide timely, accurate, and actionable information for marketers • We need to make the best possible tactical decisions in the short run and strategic decisions in the long run
Brand Equity Measurement System • Conducting brand audits • Developing tracking procedures • Designing a brand equity management system
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
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
How to Conduct Tracking Studies • Who to track (target market) • When and where to track (how frequently) • How to interpret brand tracking
Brand Equity Management System • A brand equity management system is a set 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
Brand Equity Charter • Provides general guidelines to marketing managers within the company as well as key marketing partners outside the company • Company view of brand equity into a formal document. • Should be updated annually
Brand Equity Charter Components • Define the firm’s 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
Brand Equity Charter with Kool History of the brand/key events: how the brand has evolved; how it was repositioned, and key events?
Brand Equity Charter with Kool • The brand vision • The “complete male grooming solution” that gives the leap to an “attractive man” and • Be a entry barrier for other companies in the male grooming category.
Brand Kool in next 3 years DNA Get Noticed Manly Fragrance Shaving line After Shave Line Hygiene Line Beard Softner Manly Fragrance Manly Fragrance • Kool Shaving Cream • Monsoon • Frosty • Saloon • Kool Shaving Foam • Ultra Glide • Extreme Comfort • Kool Shaving Gel • Kool After Shave Lotion • Antiseptic • Kool After Shave Moisture Gel • Moisture • Kool After Shave Fairness Cream • Fairness • Kool Deo Body Spray • Blue, Citrus, Saint, Original • Kool Deo Talc - Original • Kool Deo Soap • Blue, Citrus, Saint, Original
Brand Equity Report • Assembles the results of the tracking survey and other relevant performance measures • To be developed monthly, quarterly, or annually • Provides descriptive information as to what is happening with the brand as well as diagnostic information on why it is happening
Brand Equity Responsibilities • Organizational responsibilities and processes that aim to maximize long-term brand equity • Establish position of Director of Equity Management 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 report