Building Great Brands: Defining And Measuring Brand Equity
Building GreatBrands:Defining andMeasuringBrand EquityKen Mison, CMRP, P.CRMVice PresidentBranding and CRM Research Solutions
Why this topic?
Marketing Sciences Institute2005 Top Tier Priorities1. Assessing Marketing Productivity (Return on Marketing) andMarketing Metrics. Link internal marketing metrics (awareness)to financial metrics / valuing customers and brands2. Brands and Branding: Measuring brand equity and relating itto customer equity3. Managing Customers: Retaining customers and measuringlifetime value4. Growth, Innovation and New Products: Improving metrics for ROIfor new products and early prediction of marketplaceacceptance5. Understanding Customers: Anticipating future needs andassessing the value to the customer of the firm’s actions.3
The Friday 2pm Test!
Which may be the oldest brand in the world?Clue:16685
Which company was the first to spend 1M per year onadvertising, and when?Clue: 18706
What percent of American drug markers revenues werespent on marketing and advertising in the 1860’s?40%7
One of these early American drugs went on to becomethe most famous brand in the world which one?‘This intellectual and temperance drink makes not only a delicious,exhilarating, refreshing and invigorating beverage, but a valuableBrain Tonic and a cure for all nervous affections – Head Ache,Neuralgia, Hysteria, Melancholy, etc.’8
Bonus Question: Who will “wash your blues away”?9
Channel Domination: How did they get so big?Five most valuable brands according to Interbrand (2005)Coca-ColaMicrosoftIBMGeneral ElectricIntelMost people would probably say the success of these companies is based ongiving peoplegreat products andgreat communicationWe tend to think that brand building is something that is done in the mindBut look again at the above companies 10
Does that mean that what people thinkis irrelevant?The value of committed customers.
Why have these brands been losing?KodakNintendoIn all cases the losses are theresult of losing “consumers”.NokiaThe equity of these brands isbeing driven by consumerequity – not channel dominance.AOL12
Lifetime ValueValidation from TNS UK Scanner Panel Data: 30 countries, 27,000 people, 2 years, 17M observationsROI in terms of Life Time ValueROI measured as life time value increases 7,000% ROI measured as life time valueincreases 1,900%13
Points of view on brand equitymeasurement
Brand Equity measurement oural15
The Most Commonly Identified ComponentsBrand-FinancePerformance assessmentDifferentiationEsteem – regard, reputation, word-of-mouth, credibilityRelevanceYoung and RubicamDifferentiationRelevanceEsteemKnowledge16
“Comprehensive models of brand equity ” (Keller and Lehman, MSI, 2004)“ intense and activepreference, attitudinaland behavioural loyalty”(Keller 1996)FavorableBrand ResponseJudgments FeelingsStrong, uniquebrand yBrand Mind Shareawareness, familiarity, knowledge5 Core MeasuresBonding(Millward Brown)AdvantageTop 20% percentileon all four dimensions(Young & Rubicam)PerformanceRelevanceProminence in the mind14 Core Measures48 “Universal” MeasuresThe top-3 in each of these approaches collapse to just one thing: ‘Relevant advantage’ (i.e. ‘The brandoffers what I’m looking for better than others at the right price’)17
It’s hard to get head to head comparisons but here isone FamousBrand MicrosoftThings are great!Famous Brand according to our measurementthis brand was dying30593044515The above measures were taken at the same time in separate surveys. Clearly wewere telling the client different things. We were saying the brand was dying and theywere saying everything was just great!Y&R say they can identify dying brandsThey can’t – by the time they do, it’s too lateReason – wrong measures are being usedThis brand has since been withdrawn from the market.18
Some other measures that have been suggested but willnot workMarket shareStock pricePast behaviourStated future intention (to purchase or switch)Price sensitivity / conjoint approachesCustomer satisfaction / delightLoyalty measures / indexesSome form of satisfaction / delight / loyalty measurement is perhaps themost common measures across the different brand equity measurementmodels in use. They deserve special attention.19
Why not measure loyalty?Loyalty is behavioural –Commmitment is psychological –it’s about what people doit’s about how people feelit’s about observing purchase andrepurchase behaviourit’s about the strength of thepsychological relationship / bondLoyalty refers to the likelihood ofrepurchase based on pastbehaviourCommitment refers to the likelihood ofrepurchase based on what’s in theconsumer’s mind“loyalists” are not necessarilycommittedCommitted people are as loyal aspossibleMost important:commitment correlates with future behaviour20
Satisfaction itself is based on a false view of consumerbehaviour.This . makes mehappy - it’s congruent withmy needs and valuesBrand LoyalLoyaltyTwo words defeat this model:‘Habituation’ - nothing delights foreverConvert‘Involvement’ - I don’t care enough to want to be delightedLowSatisfactionHighExtreme‘delight’21
What ‘commitment’ really is .CommittedWhat happens if I don’t care?CommitmentIt’sokayIt’s ut ‘involvement’ you can’t get enthusiasticYour attitude is more likely to be ‘what’s the big deal’22
And, brand equity must also account for category enthusiasm when allbrands are equally strong, relevant and differentiated to the consumerMultiple commitment is a real state of mindThe key ingredient is ‘category enthusiasm’Does making me more satisfied or ‘delighted’ make sense?Best quality productsCompetitive pricesBrand 1Friendly serviceBrand 2Fix problems fastUnderstand customersAnd so on .DisgustSatisfaction/AttributesDelight23
Let’s start from scratch How would we recognize a brand that has becomeentrenched in the minds of its customers and thatit’s being bought by choice, not just because it isthe dominant product in the market?
To begin, let’s look at what Brand Equity would look likein our data and that requires evidence of actual inmarket behaviour against an equity measureValidation needs to Be GlobalBe directly linked to actual in-market behaviourBe predictive of future in-market behaviourCapture the entire category (competitive set) at onceAddress either brand or category equityValidate with every product / service / brand / categoryValidate with any size of brand including a new category entrantBe equally effective in both B-C and B-B25
It tracks to real in-market behaviour and it predicts thefuture of a brand accurately6 competing brands (first 3 are large and next 3 are small) tracked over 4 years with a 6-month lag.Changes in Brand Equity precede changes in market shares. This happens because the measurementused is psychological and attitudes change in advance of behaviour.Equity Score Market Share (actual)8060Brand OneR 0.91R2 0.824020050403020100403020102Brand Two1.5R 0.84R2 0.70Brand Three54321R 0.87R2 0.76Brand FourBrand FiveR 0.85R2 0.7210.554321R 0.74R2 0.55Brand SixR 0.92R2 0.85026
It should account for known brand phenomenaThe brand effect gap (double jeopardy) as described by Andrew Ehrenburg is real.Market leading brands get more than their fair share of spend4540353025201510Equity ScoreOtherBrand 8Brand 7Brand 6Brand 5Brand 4Brand 30Brand 25Brand 1BrandEffectGapShare of Wallet27
0Week 0324Week 0316Week 0308Week 0250Week 0242Week 0234Week 0226Week 0218Week 0210Week 0202Week 0144Week 0136Week 0128Week 0120Week 0112Week 0104Week 0047Week 0039Week 0031Week 0023Week 0015Week 0007Week 9949Week 9941Week 9933Week 9925Week 9917Week 9909Week 9851Week 9843Week 98350Week 9843Week 9925Week 9917Week 0324Week 0316Week 0308Week 0250Week 0242Week 0234Week 0226Week 0218Week 0210Week 0202Week 0144Week 0136Week 0128Week 0120Week 0112Week 0104015156101045520Week 9851Week 9917Week 9909Week 0128Week 0136Week 0112Week 0120Week 0308Week 0324Week 0316Week 0308Week 0348Week 0332Week 0340Week 0324Week 0242Week 0250Week 0250Week 0316Week 0234Week 0242Week 0234Week 0226Week 0218Week 0210Week 0226Week 0218Week 0210Week 0202Week 0144Week 0136Week 0202Week 0144Week 0120Week 0104Week 0128Week 0112Week 0104Week 0047Week 0039Week 0031Week 0023Week 0015Week 9949Week 0007Week 0047Week 0039Week 0031Week 0023Week 0015Week 0007Week 9949Week 9941Week 99418Week 993320Week 99251020Week 99331225Week 99253025Week 991730Week 990910Week 985120Week 98432Week 98273Week 98434Week 981950Week 98355Week 981960Week 9835Average R 0.83Average R2 0.68Week 9827Week 0324Week 0316Week 0308Week 0250Week 0242Week 0234Week 0226Week 0218Week 0210Week 0202Week 0144Week 0136Week 0128Week 0120Week 0112Week 0104Week 0047Week 0039Week 0031Week 0023Week 0015Week 0007Week 9949Week 9941Week 9933Week 9925Week 99171Week 0047Week 0039Week 0031Week 0023Week 0015Week 0007Week 9949Week 9941Week 9933Week 9843Week 9909Week 0324Week 0316Week 0308Week 0250Week 0242Week 0234Week 0226Week 0218Week 0210Week 0202Week 0144Week 0136Week 0128Week 0120Week 0112Week 0104Week 0047Week 0039Week 0031Week 0023Week 0015Week 0007Week 9949Week 9941Week 9933Week 99252Week 9909Week 9835Week 9909Week 9851Week 9843Week 99172Week 9851Week 9819Week 9835Week 98273Week 9851Week 98190Week 98271Week 98356Week 98197Week 9827Week 0324Week 0316Week 0308Week 0250Week 0242Week 0234Week 0226Week 0218Week 0210Week 0202Week 0144Week 0136Week 0128Week 0120Week 0112Week 0104Week 0047Week 0039Week 0031Week 0023Week 0015Week 0007Week 9949Week 9941Week 9933Week 9925Week 9917Week 9909Week 9851Week 9843Week 9835Week 9827Week 98190Week 98270Week 9819It must cover the whole category including new entrantsTracking over 6 years in a beverages market. All brands, large, small, old, newresponded in the expected manner. Two month lag to share change.3Equity Score Market Share (actual)1New entrant immediately seen and tracked7640530432128
In order to create a Brand Equitymeasure Two bits of theory are important:Brand Equity and Commitment
Why do people buy what they buy or do what they do?Choice services, products, etc. .How much do I reallywant that one?Is that one an option?Can I get to it?30
Why do people buy what they buy or do what they do?Choice services, products, etc. .The power of a brandin the mindFreeChoiceThe power of a brandin the marketConstrainedChoice31
This gives us a framework for understanding brand equitySales(behaviour in a market)Consumer EquityMarket EquityAntecedents – not the measures themselvesBrand Effects(brand / dvertising, tribution)(contracts,legacies)ConstrainedChoice32
General behavioural characteristics of consumersConsumer EquityWilling to “climbmountains” to buythe brandThe brand hasno chance withthis personThe bestof all possibleworldsDon’t care - buywhatever is easiest ormost convenientMarket Equity33
Measuring Consumer Equity
The Challenge In Measuring Brand EquityA brand equity measure must display A sound theoretical on35
Quick reminder - some measures that have beensuggested but will not workMarket shareStock pricePast behaviourStated future intention (to purchase or switch)Customer satisfactionLoyalty measures / indexesPrice sensitivity / conjoint approachesBehaviour follows from attitudes. Attitudes are psychological. The only way tomeasure brand equity is to measure a consumers’ psychological relationship tobrands in a category.36
Our approach was developed from the world’s most widely used measureof consumer commitment – The Conversion Model The Equity Score was developed from the Conversion Model .More than 7,000 studies worldwideMore than 300 product and service categoriesMore than 82,500 brandsUsed by 80% of the world’s most valuable brands (Interbrand, 2004)It is the only research model developed directly from the original ConversionTheory (Hofmeyr, 1986).Annual validations have been conducted since 1990 – it is probably the mostvalidated research model in use.37
Conversion Theory holds that there are only four dimensions tomeasuring the commitment of anyone to anything.Needs fithow do people rate each of the brandsthey are aware of or useInvolvementhow important is the brand choice how much does it matterAttractiontoalternativeshow do all of the alternatives compare(competitors or substitutes)Ambivalencehow certain are people aboutthe choices they’ve made38
The Conversion Model produces three outputsFor every brand in a category the basic segmentationThe Conversion Model “World’s Leading Measure of Commitment”CommitmentCOMMITTEDStates of Mind Equity Score UNCOMMITTEDOPENUNAVAILABLEStates of Mind describes a market in terms of themindset of the respondents. This looks at peoplerather than brands.Our focus today39
Features of the Equity Score A number from 1 to 100 for each brandSum of all brands 100 (and will sum to 100 for any group of respondents)Easily comparable to actual market shareIt was created from a database of over 27,000 respondentswith over 17 million purchase observationsgathered over a two-year periodacross multiple developed countriesusing TNS scanner panel data40
More detail Calculated for each brand at the level of the individual respondent – each respondentthen has an Equity Score for each brand they are aware of or that they useUsers: all scores sum to 100 (for all used brands combined)Non-users:if the sum of the Equity Scores for used brands is 100 then all non-used brands geta score of “0” (e.g. there is no more space in the consumers mind).If the Equity Scores on the non-user side sum to less than 100, then the remainingportion gets allocated to the non-used brands based on availability to each nonused brand.The Equity Score therefore takes into account the level of commitment to other brandsin the study, both used (in terms of the total sum of used brands) and unused (in termsof the relative allocation of the remainder)In repertoire markets it accurately produces an Equity Score for each brand used in therepertoire and this then represents share of spend rather than absolute market shareSo, the Equity Score for Brand X for person Y is the market share that Brand Xcould expect to get from person Y were there no market barriers i.e. if person Ycould buy what they wanted.41
Does this make sense We include users and non-users of a brandMakes sense – non-users are a part of a brand’s future and therefore it’s currentequity – brands can become more or less valuable in the future and that should bethe whole point of a brand equity measure – where is a brand going based onwhere it is todayThere is nothing about price sensitivityThat is a barrier to change– not a measure of the brands equity with consumers.Brands can be held in high regard even without purchase and the high regard iswhat some purchasers are looking for – think Rolls Royce for example.There is nothing about associations, knowledge, personality, loyalty, market share etc.They are not needed to calculate brand equitySome are (maybe) antecedents for diagnostic analysis and should not be the“outcome” measuresThings like current share are irrelevant42
Validation
Quick reminder Validation needs to Be GlobalBe directly linked to actual in-market behaviourBe predictive of future in-market behaviourCapture the entire category (competitive set) at onceAddress either brand or category equityValidate with every product / service / brand / categoryValidate with any size of brand including a new category entrantBe equally effective in both B-C and B-B44
Validation: Measures Underlying the Equity Score Validation from TNS UK Scanner Panel Data: 27,000 people, 2 years, 17 million observations.The measures underlying the Equity Score are strongly related to actual inmarket spend and behaviour.Our strongest relationshipsresult in nearly 80% SOW61% of those identified asmost likely to switch did so.45
Validation: Measures Underlying the Equity Score Validation from TNS UK Scanner Panel Data: 27,000 people, 2 years, 17 million observations.Actual spend is strongly related to the Conversion Model segmentsLifetime Value calculation accounts for “jump” and “slide” between the segments.ROI measured as life time value increases 7,000% 1,900 % amongst users46
Concurrent Validation: Measures Underlying the Equity Score Share of Wallet is sustainedValidation from TNS UK Scanner Panel Data: 27,000 people, 2 years, 17 million observations.Share of Wallet78(Months 1 – 3)58341514753974Perseverance model strength.Over 18 months ConversionModel remained extremely stableand accurate – people continuedto do what they were predicted todo.Share of Wallet70(Months 15 – 18)49331712Predicts next brand purchase in91% of casesPercent of times that Brandis next brand bought742615Committed105Literature review, 1973-2002: Best R2 .08. Only an 8% ability to predictnext brand purchase. The best claim found from anysource is an R2 .27 or 27% correctprediction of next brand purchase. 5132Unavailable47
General construction equipment Equity Score and most often usage forequipment brands (Canada) – a B-B repertoire marketBrand 1 is the market leader and as we would expect it has share in excess of it’s Equity Score.Brand 1 needs to focus on relationship building and retention to protect it’s position. This is a brandthat faces multiple threats rather than a single strong competitor.Brand 5 is a newer entrant to the market and it has room to grow it’s share – availability is a barrier.This brand stands to gain the most in the near term if supply can be improved.n:1755047.6GAPMost often usage45Brand 1 - 7.2%40Equity Score40.435Brand 2 2.8%30Brand 3 2.5%2520Brand 4 0.7%1513.310.810Brand 512.611.97.74.9 3.3%56.53.20Brand 1Brand 2Brand 3Brand 4Brand 548
High-speed vs. Dial-up internet services Equity Scores (Canada)Here is an example of a category equity analysis. Clearly the Equity Score can see a category aswell as it can a brand.High-speed service clearly dominates in market share. Equity Score results show further growth ispossible in the near term however, growth will be moderate (perhaps due to availability and / or costbarriers) at about 4%.Dial-up is still in a declining market share position. There is a “hard core” segment of consumerswhose light internet usage does not make high speed attractive.n:869Share of marketEquity Score80.070.066.3GAP 3.7% High Speed- 3.7% Dial-up60.040.033.730.020.00.0High SpeedDial Up49
Internet service provider Equity Scores (Canada) – High-speed market“All others” accounts for most market share but overall they are not well positioned and are likely tosee declines in their share as a group. They are not attracting new users so their strategy has to beretention while they focus on improving their offering (if that is possible).Brand 1 is the largest ISP and appears to be in a position of equilibrium with usage and Equity Scorebeing at similar levels – there is little room for further growth under current conditions. This brandalso requires a retention strategy and needs to see if they can improve the offering to increaseappeal.Brand 2 currently has a small user base, but is in a good position for growth with their Equity Scorebeing greater than share. People are attracted to Brand 2 giving them strength and potential. Inreality this brand has a barrier in the form of distribution (access).Share of marketn:292GAP- 1.2% Brand 1 13.9% Brand 2Equity Score80.060.058.946.240.0- 12.7% All Others32.931.722.120.08.20.0Brand 1Brand 2All Others50
Retail sector Equity Scores (Canada) Client’s Equity Score indicates that it is in a strong position. Strategy: identify and r
2. Brands and Branding: Measuring brand equity and relating it to customer equity 3. Managing Customers: Retaining customers and measuring lifetime value 4. Growth, Innovation and New Products: Improving metrics for ROI for new products and early prediction of marketplace acceptance 5. Understanding Customers: Anticipating future needs and
With the influx of data analytics about consumer needs, sentiment, and lifestyle choices, by 2030 brands are seeking out users, rather than users seeking brands. Consumers no longer pay attention to brands because AI brands now know what consumers need, and present them wi
Great Great DVD Player. Manual & Auto. Great Sound System. Great Warranty. Great Dual Airbags. Great Roadside Assist Programme. Great Leather trim. Great Torque on Demand. Great Reversing camera. Great Bluetooth. . Great Wall H5 X200 Brochure Created Date: 5/8/2013 1:12:41 PM .
c h a p t e r 1 Defining Your Industry Focus and the Type of Business You Want to Start c h a p t e r 2 Defining the Target Customer: Both Users and Buyers c h a p t e r 3 Defining the Needs of Target Customers: Getting Into Their Hearts and Minds c h a p t e r 4 Defining Solutions for Customers: Developing a Product Line and Services Strategy c h a p t e r
defining relative clauses are used to add important information. The sentence would have a different meaning without the defining relative clause. I’m going to wear the skirt that I bought in London. The defining relative clause tells us which skirt. The skirt, which is a lovely dark blue colour, only cost 10.
Building World-class Indian Brands. ITC has created world-class Indian brands that create, capture and retain larger value within the country. Some of ITC's popular FMCG brands have built significant market standing over a short period of time. These include Aashirvaad, Sunfeast and its sub-brands Dark Fantasy, Delishus, Farmlite, Yumfills,
Ceco Building Carlisle Gulf States Mesco Building Metal Sales Inc. Morin Corporation M.B.C.I. Nucor Building Star Building U.S.A. Building Varco Pruden Wedgcore Inc. Building A&S Building System Inland Building Steelox Building Summit Building Stran Buildings Pascoe Building Steelite Buil
first, more personal section in this book, "Memoir of a Race Traitor." 1 A History of Racism in the United States 187 I. Commerce Capitalism: "So great a supply exhausted In so short a time." My andfather Am-brose Cobbs landed at Yorktown, Virginia, on the 'Treasure" in 1613 with his brother .
2. Non-defining relative clauses DEFINING RELATIVE CLAUSES These describe the preceding noun in such a way to distinguish it from other nouns of the same class. A clause of this kind is essential to clear understanding of the noun. The boy who was playing is my brother. Defining Relative Pronouns SUBJECT OBJECT POSSESSIVE For people Who That Whom/Who That Whose For things Which That Which That Whose Of which Defining Relative Clauses: people
