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. Firm level approaches measure the brand as a financial asset. In short, a calculation is made regarding how much the brand is worth as an intangible asset. For example, if you were to take the value of the firm, as derived by its market capitalization—and then subtract tangible assets and "measurable" intangible assets—the residual would be the brand equity.
To do its calculation, Interbrand estimates brand value on the basis of projected profits discounted to a present value. The discount rate is a subjective rate determined by Interbrand and Wall Street equity specialists and reflects the risk profile, market leadership, stability and global reach of the brand.
Brand valuation models typically combine a brand equity measure e. The classic product level brand measurement example is to compare the price of a no-name or private label product to an "equivalent" branded product.
The difference in price, assuming all things equal, is due to the brand. More sophisticated marketing mix models have a floating base that can capture changes in underlying brand equity for a product over time. This approach seeks to map the mind of the consumer to find out what associations with the brand the consumer has. This approach seeks to measure the awareness recall and recognition and brand image the overall associations that the brand has.
Free association tests and projective techniques are commonly used to uncover the tangible and intangible attributes, attitudes, and intentions about a brand. All of these calculations are, at best, approximations. A more complete understanding of the brand can occur if multiple measures are used.
Brand equity is the positive effect of the brand on the difference between the prices that the consumer accepts to pay when the brand is known compared to the value of the benefit received. There are two schools of thought regarding the existence of negative brand equity. One perspective states brand equity cannot be negative, hypothesizing only positive brand equity is created by marketing activities such as advertising, PR, and promotion.
A second perspective is that negative equity can exist, due to catastrophic events to the brand, such as a wide product recall or continued negative press attention Blackwater or Halliburton , for example. Colloquially, the term "negative brand equity" may be used to describe a product or service where a brand has a negligible effect on a product level when compared to a no-name or private label product.
The greater a company's brand equity, the greater the probability that the company will use a family branding strategy rather than an individual branding strategy. This is because family branding allows them to leverage the equity accumulated in the core brand. Aspects of brand equity include: One of Oldsmobile best known brands was " Cutlass ".
First used in , by the s it was confusingly used on three different platforms, with the Oldsmobile Cutlass Ciera becoming Oldsmobile's best selling model which at different times would be sold alongside the smaller Cutlass Calais , and a newer Cutlass Supreme. The Aurora-inspired Intrigue introduced in retired the aging Cutlass nameplate with the intention to recast Oldsmobile into a future as in import fighter and its stodgy past as existing model names which had served in the past including Cutlass were phased out.
But sales would continue to decline, as Cutlass briefly re-appeared as a rebadged Malibu in To reduce costs at General Motors by consolidating a profusion of divisions, the Oldsmobile division was entirely phased out in Rival GM division Chevrolet re-entered the midsize market when the company resurrected the Malibu nameplate in and later the Impala in as their answer to imports e.
As of the model year, both nameplates are still in production. The Malibu, originally part of the mid-size Chevelle lineup until as the top trim level, GM promoted its trim level to full model status at the time the Chevelle nameplate was retired and has remained dormant since because of its association with the musclecar era its trim level had brand recognition and better known , a practice first demonstrated in when the Chevy II lineup was rebadged the Nova was the top trim level; it was one of the finalists for the official model name dating back to but Chevrolet management wanted its car nameplates beginning with a "C" - the promotion of the Nova from trim level to official model status broke the tradition of using C-word names by Chevrolet.
The Lincoln-Mercury division of the Ford Motor Company best known brand throughout the late s to was the Mercury Cougar - first used as a twin to the Ford Mustang and later a personal luxury coupe sharing its platform with its midsize Torino lineup until when its entire midsize lineup at the time branded as the Montego was rebadged as part of the Cougar lineup which went viral from a base coupe to a station wagon until the early s when L-M repositioned its midsized lineup by rebadging the Cougar under the Marquis nameplate.
In the early s in North America, the Ford Motor Company made a strategic decision to brand all new or redesigned cars with names starting with "F. The aging Taurus , which became one of the most significant cars in American auto history, would be abandoned in favor of three entirely new names, all starting with "F," the Five Hundred , Freestar , and Fusion.
By , the Freestar was discontinued without a replacement. The Five Hundred name was thrown out and Taurus was brought back for the next generation of that car in a surprise move by Alan Mulally. In practice, brand equity is difficult to measure.
Because brands are crucial assets, however, both marketers and academic researchers have devised means to contemplate their value. David Aaker , a marketing professor and brand consultant, highlights ten attributes of a brand that can be used to assess its strength. Aaker doesn't weight the attributes or combine them in an overall score, as he believes any weighting would be arbitrary and would vary among brands and categories. Rather he recommends tracking each attribute separately. Brand Performance The product itself is at the heart of brand equity, as it is the primary influence of what consumers experience with a brand, what they hear about a brand from others, and what the firm can tell customers about the brand in their communications.
Designing and delivering a product that fully satisfies consumer needs and wants is a prerequisite for successful marketing, regardless of whether the product is a tangible good, service, organization, etc. Numerous studies have shown that high quality brands tend to perform better financially, e.
Thus, brand performance refers to the intrinsic properties of the brand in terms of inherent product or service characteristics. How well does the brand rate on objective assessments of quality? To what extent does the brand satisfy utilitarian, aesthetic, and economic customer needs and wants in the product or service category? The specific performance attributes and benefits making up functionality will vary widely by category.
Nevertheless, there are five important types of attributes and benefits that often underlie brand performance, as follows: Customers often have beliefs about the levels at which the primary characteristics of the product operate e. Additionally, they may also may have beliefs as to special, perhaps even patented, features or secondary elements of a product that complement these primary characteristics.
As noted above, customers can view the performance of products or services in a broader manner. Reliability refers to the consistency of performance over time and from purchase to purchase. Durability refers to the expected economic life of the product. Serviceability refers to the ease of servicing the product if it needs repair.
Thus, perceptions of product performance are impacted by factors such as the speed, accuracy, and care of product delivery and installation; the promptness, courtesy, and helpfulness of customer service and training; the quality of repair service and the time involved; and so on. Customers often have performance-related associations that relate to the service interactions they have with brands. Service efficiency refers to the manner by which these services are delivered in terms of speed, responsiveness, etc.
Consumers may have associations to the product that go beyond its functional aspects to more aesthetic considerations such as its size, shape, materials, and color involved. Thus, performance may also depend on sensory aspects as to how a product looks and feels and perhaps even what it sounds or smells like.
In other words, the pricing strategy adopted for a brand can dictate how consumers categorize the price of the brand e. Any of these different performance dimensions can serve as a means by which the brand is differentiated.
Often, the strongest brand positioning involves performance advantages of some kind, and it is rare that a brand can overcome severe deficiencies on these dimensions.
Brand Imagery The other main type of brand meaning involves brand imagery. Brand imagery is how people think about a brand abstractly rather than what they think the brand actually does. Thus, imagery refers to more intangible aspects of the brand. All different kinds of intangibles can be linked to a brand, but four categories can be highlighted:.
One set of brand imagery associations is the type of person or organization who uses the brand. This imagery may result in a profile or mental image by customers of actual users or more aspirational, idealized users. Associations of a typical or idealized brand user may be based on descriptive demographic factors or more abstract psychographic factors. Demographic factors might include gender, age, race, income, and marital status. Psychographic factors might include attitudes toward life, careers, possessions, social issues, or political institutions.
In a business-to-business setting, user imagery might relate to the size or type of organization. User imagery may focus on more than characteristics of just one type of individual and center on broader issues in terms of perceptions of a group as a whole.
A second set of associations is under what conditions or situations the brand could or should be bought and used. Associations of a typical purchase situation may be based on a number of different considerations, such as: Similarly, associations of a typical usage situation may be based on a number of different considerations, such as: Brands may also take on personality traits and values similar to people. Brand personality is often related to the more descriptive usage imagery but involves much richer, more contextual information.
Five dimensions of brand personality with corresponding sub-dimensions which have been identified are: Finally, brands may take on associations to their past and certain noteworthy events in the brand history. These types of associations may involve distinctly personal experiences and episodes or be related to past behaviors and experiences of friends, family, or others. Consequently, these types of associations may be fairly idiosyncratic across people, although sometimes exhibiting certain commonalties.
Alternatively, these associations may be more public and broad-based and therefore be shared to a larger degree across people. In either case, associations to history, heritage, and experiences involve more specific, concrete examples that transcend the generalizations that make up the usage imagery.
Key Criteria for Brand Meaning Thus, a number of different types of associations related to either performance and imagery may become linked to the brand. Regardless of the type involved, the brand associations making up the brand image and meaning can be characterized and profiled according to three important dimensions that provide the key to building brand equity: Successful results on these three dimensions produce the most positive brand responses, the underpinning of intense and active brand loyalty.
To create brand equity, it is important that the brand have some strong, favorable, and unique brand associations in that order. At the same time, it should be recognized that not all strong associations are favorable and not all favorable associations are unique. Creating strong, favorable, and unique associations are a real challenge to marketers, but essential in terms of building customer-based brand equity.
Strong brands typically have firmly established strong, favorable, and unique brand associations with consumers, e. Brand responses can be distinguished according to brand judgments and brand feelings, i. Brand judgments involve how customers put together all the different performance and imagery associations for the brand to form different kinds of opinions.
Customers may make all types of judgments with respect to a brand, but in terms of creating a strong brand, four types of summary brand judgments are particularly important in ascending order of importance: There are a host of attitudes that customers may hold towards brands, but among the most important relate in various ways to the perceived quality of the brand.
Other notable attitudes related to quality pertain to perceptions of value and satisfaction. Customers may form judgments that transcend more specific brand quality concerns to consider broader issues related to the company or organization making the product or providing the service associated with the brand.
In other words, customers may form judgments with respect to the company or organization behind the brand. Brand credibility refers to the extent to which the brand as a whole is seen as credible in terms of three dimensions — perceived expertise, trustworthiness, and likability. In other words, to what extent is the brand seen as being: Eliciting favorable brand attitudes and perceptions of credibility are important but may be insufficient if customers do not actually seriously consider the brand for possible purchase or usage.
Consideration is more than mere awareness and deals with the likelihood that customers will actually include the brand in the set of possible options of brands they might buy or use. Consideration depends in part on how personally relevant customers find the brand, i. Thus, customers often make an overall appraisal as to whether or not they have any personal interest in a brand and whether they would or should ever buy a brand. Brand consideration is a crucial filter in terms of building brand equity.
No matter how highly regarded or credible a brand may be, unless the brand also receives serious consideration and is deemed relevant too, customers will always keep a brand at a distance and never closely embrace it. Brand consideration will depend in large part on the extent to which strong and favorable brand associations can be created as part of the brand image.
Finally, superiority relates to the extent to which customers view the brand as unique and better than other brands. This can provide great insight and marketing value to help steer a business in a direction its paying customers may better respond to — a more connected customer experience that can show up on the bottom line.
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Thank you for helping to improve wiseGEEK! Watch the Did-You-Know slideshow. Mal Baxter Edited By: Daniel Lindley Last Modified Date: This Day in History. The Star Spangled Banner poem was written. You might also Like. What Is Brand Language?
What is Brand Loyalty? Discuss this Article sadams Post 1 As customers become more and more savvy, it may be increasingly difficult to interact with them in a meaningful way.
Building customer-based brand equity doesn’t happen overnight, which is why Keller’s model is so succinct. By starting at the bottom and letting customers get to know your business little by little, you create a trustworthy, likeable, and ultimately successful brand.
Customer-Based Brand Equity Model Consumer- Brand Resonance Brand Salience Consumer Judgments Consumer Feelings Brand Performance Brand Imagery INTENSE, ACTIVE LOYALTY .
Customer Based Brand Equity Imagine walking in aisle of a typical super market (Shaw’s, Costco etc) to purchase salt, there are many offerings but choice is “Morton”. It is a simple example but a great situation to understand brand and brand equity. Professor Nader Tavassoli of London Business School contrasts traditional approaches to branding - where brands are a visual identity and a promise to customers - to brands as a customer experience delivered by the entire organisation. The course offers a brand workout for your own brands, as well.
Customer Based Brand Equity is a way of analyzing the value of particular brand in the minds of the customers. The element of branding happens to increase the popularity of the brands with the consumers and the end customers and also increases the ch/5(14K). Brand equity is very important to marketers of consumer goods and services. Brand equity facilitates in the effectiveness of brand extensions and brand introductions. This is because consumers who trust and display loyalty toward a brand are willing to try to adopt brand extensions. While there have been methods to measure the financial value of brand equity, measurement of customer‐based.