CHAPTER 8:
DEVELOPING A BRAND EQUITY
MEASUREMENT AND MANAGEMENT SYSTEM
Kevin Lane Keller
Tuck School of Business
Dartmouth College
8.1
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).
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.
Brand as an assets generate superior return supporting following:
To qualify a brand as an asset in financial terms, marketers need to
measure it in terms of its ability to generate future cash flows.
Marketers can create value only by changing customer behavior-
changes in attitude do not generate cash flow.
Marketers should measure brand equity in a way that captures the
source and scale of the emotional component the brand adds to the
functionality of the product.
8.2
Brand Equity Measurement System
A set of research procedures that is designed
to provide timely, accurate, and actionable
information for marketers so that they can make
the best possible tactical decisions in the short
run and strategic decisions in the long run
8.3
Brand Equity Measurement System
Conducting brand audits
Developing tracking procedures
Designing a brand equity management system
8.4
Brand Audit
Externally, consumer-focused assessement
A comprehensive examination of a brand
involving activities to assess the health of the
brand, uncover its sources of equity, and suggest
ways to improve and leverage that equity
It includes brand vision, mission, promise, values,
position, personality, and performance
3.5
Brand Audit
Marketing audit: Independent examination of a
company’s marketing environment, objectives,
strategies, and activities with a view of
determining problem areas and opportunities and
recommending a plan of action to improve the
company’s marketing performance.
agreement on objectives, scope, and approach
data collection
report preparation and presentation
3.6
Importance of Brand Audits
Understand sources of brand equity
Firm perspective- What product or services are currently offered and
how they are being marketed or branded
Consumer perspective- what deeply held perceptions and beliefs
create the true meaning of brands and products
Set strategic direction for the brand
Recommend marketing programs to maximize
long-term brand equity
3.7
Brand Audit Steps
Brand inventory (supply side)
Brand exploratory (demand side)
3.8
Brand Inventory
Comprehensive profile of how all the products and
services of a company are marketed and branded
Profiling requires marketers to catalogue:
Visual and written form for each product or service sold:
The name, logo, slogan, symbols, characters, packaging other
trademarks
The inherent product attributes or characteristics of the
brand
Pricing, communications, and distribution policies
Marketers need to set up a “war Room” where all the
marketing activities and programs can be displayed or
assessed.
3.9
Brand Inventory
Marketers can also profile:
Brand elements
Supporting marketing programs
Profile of competitive brands
POPs and PODs
Brand mantra
3.10
Brand Inventory (Cont.)
• Rationale
• Helps understand consumers’ perceptions.
• Provides analysis and useful insights into how brand
equity may be better managed.
• Reveals the extent of brand consistency and lack of
perceived differences among different products sharing
the brand name.
• Helps uncover undesirable redundancy and overlap
that could lead to consumer confusion or retailer
resistance.
3.11
Brand Exploratory
The second steps of brand audit to provide detailed
information about what consumers actually think of
the brand
Brand Exploratory is a research directed to
understanding what consumers think and feel about
the brand and act toward it in order to better
understand sources of customer-based brand equity
Uncovers knowledge structures for the core brand as
well as its competitors
3.12
Brand Exploratory
Preliminary
Activities
Interpreting
Qualitative
Research
Conducting
Quantitative
Research
Brand Exploratory
Primary activities: Several preliminary activities are useful for
the brand exploratory.
First, in many cases, a number of prior research studies may exist and
be relevant.
Second, it is also useful to interview internal personnel to gain an
understanding of their beliefs about consumer perceptions for the
brand and competitive brands
Additional research is often required to better understand how
customers shop for and use different brands and what they think and
feel about them.
To allow marketers to cover a broad range of issues and to pursue
some in greater depth, the brand exploratory often employs
qualitative research techniques
3.14
Brand Exploratory
Interpreting Qualitative Research: There are a wide variety of
qualitative research techniques.
Mental Maps and Core Brand Associations-
A mental map accurately portrays in detail all salient brand associations
and responses for a particular target market. One of the simplest
means to get consumers to create a mental map is to ask them for
their top-of-mind brand associations (“When you think of this brand,
what comes to mind?”).
Core brand associations are those abstract associations (attributes and
benefits) that characterize the 5–10 most important aspects or
dimensions of a brand. They can serve as the basis of brand
positioning in terms of how they create points-of-parity and points-
of-difference
3.15
Brand Exploratory
A mental map Core brand associations
3.16
Brand Exploratory
Qualitative Research Techniques:
3.17
Brand Exploratory
Conducting Quantitative Research:
• More definitive assessment of the depth and breadth of brand
awareness and the strength, favorability, and uniqueness of brand
associations often requires a quantitative phase of research
3.18
Brand Exploratory
Brand Positioning and the Supporting Marketing Program:
John Roberts, one of Australia’s top marketing academics,
sees the challenge in achieving the ideal positioning for a
brand as being able to achieve congruence among four key
considerations:
(1) what customers currently believe about the brand (and thus
find credible),
(2) what customers will value in the brand,
(3) what the firm is currently saying about the brand, and
(4) where the firm would like to take the brand
3.19
Figure 8.5 - John Roberts’s Brand
Positioning Considerations
Designing Brand Tracking Studies
Tracking studies involve information collected from
consumers on a routine basis over time typically through
quantitative measures of brand performance on a number of
dimensions marketer can identify in the brand audit or other
means.
Often done on a “continuous” basis
Provide descriptive and diagnostic information
They apply the brand value chain to understanding where,
how much, and in what ways brand is being created, thus
offering invaluable information about how well the brand has
achieved its positioning.
8.21
Designing Brand Tracking Studies
Brand tracking studies play an important role by providing
consistent baseline information to facilitate day-to-day
decision making.
A good tracking system can help marketers better understand
a host of important considerations such as
category dynamics,
consumer behavior,
competitive vulnerabilities and opportunities, and
marketing effectiveness and efficiency.
8.22
Designing Brand Tracking
Studies
• Product- brand tracking
What to Track • Corporate or family brand tracking
• Global tracking
• Whom to track
How to Conduct • When and where to track
Tracking Studies
• Important benchmarks
How to interpret • Brand associations determining
Tracking Studies consumer behavior
What to Track
A detail list of potential measures that correspond to the
customer based brand equity model, all of which are
candidates for brand tracking. It is necessary to:
Customize tracking surveys to address the specific issues faced by the brand
Product-brand tracking
Corporate or family brand tracking
Global tracking
Product-Brand Tracking:
Tracking an individual branded product requires measuring brand
awareness and image, using both recall and recognition measures and
moving from more general to more specific questions.
It may make sense to first ask customers what brands come to mind
in certain situations, to next ask for recall of brand on the basis of
various product category cues, and then to finish with tests of brand
recognition. 8.24
What to Track
Moving from more general to specific measure is good idea
in brand tracking. A number of specific brand associations
typically exist for the brand depending on the knowledge
structures, that can track over time.
It is important to measure all brand associations that may
distinguish competing brands.
The measure of specific lower level brand association
include all potential source of brand equity such as
performance and imagery attributes and benefits.
Marketers should also assess those key brand associations
that make up the potential sources of brand equity on the
basis of strength, favorability, and uniqueness in that order.
8.25
What to Track
Unless associations are strong enough for consumers to
recall them, their favorability does not matter, and unless
they are favorable enough to influence consumer decision,
their uniqueness does not matter.
Marketers will track more general “high level” judgments
and feelings and other outcome related measures.
Four key measures that are largely predictive of future
behavior of prospects and customers in many markets:
Functional performance of the underlying product or service
Convenience and ease of accessing the product or service
Brand personality
Pricing and value component
8.26
What to Track
Corporate and family Brand tracking: Marketers may also
want to track the corporate or family brand separately or
concurrently with individual products. Example include GE
corporate brand tracking:
How well manages is GE?
How easy is it to do business with GE?
How concerned is GE with its customers?
How approachable is GE?
How accessible is GE?
How much do you like doing business with GE?
Global Brand Tracking: If tracking covers diverse
geographic markets-especially both developing and developed
countries- they may need a broader set of background
measures to put the brand development in those markets in
the right perspective. 8.27
How to Conduct Tracking Studies
Whom to track (target market):
Loyal to brand, loyal to other brand or Switch to other brand
Track other types of customers such as channel members, and
intermediaries to understand their perceptions and actions toward the
brand, interest and image toward the brand.
When and where to track (how frequently):
One useful approach is to monitor brand association in continuous
basis
Frequency of tracking also depends on frequency of purchase
When brand is stable and enduring associations association on less
frequent basis can be enough.
Product life cycle stage
8.28
How to Conduct Tracking Studies
How to interpret brand tracking: To yield actionable
insights and recommendations, tracking measures must be as
reliable and sensitive as possible.
Marketing phenomenon do not changed over time that means data
are not change that much but measures should be sensitive enough
to detect the changes.
To develop sensitive measure marketers might need to phrase
questions in a comparative way-”Compare to other brand, how
much..” or in terms of periods- “Compared to other brands, how
much..”
Another challenge in interpreting tracking studies is detecting studies
is deciding on appropriate benchmarks.
Another important task is identifying the determinants of brand
equity.
8.29
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. Three major steps help
to implement a brand equity management system:
Brand equity charter
Brand equity report
Brand equity responsibilities
8.30
Brand Equity Charter
Provides general guidelines to marketing managers
within the company as well as key marketing partners
outside the company
Formalizes the company view of brand equity into a
document
Provides relevant guidelines to marketing managers
and key marketing partners
Should be updated on an annual basis to provide
decision makers with a current brand profile
8.31
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
8.32
The Knicks Brand Charter
The The Fans
Knicks
Emotional Bond
•Sensory fulfillment
–Looks, feels, and sounds
•Uniquely authentic An intensely passionate,
professional, unparalleled •Visceral thrill
•An incomparable event, scene
New York City experience – Eager anticipation/excitement
and energy
– War: winning/losing
•Relentless, resourceful, and
•Psychological benefits
tough
– Personal identification (with heroes)
•Championship caliber
– Social currency/belonging
•A vital part of New York City
•Emotional awards
•Unlimited in its possibilities – Intense experience
– Childhood
– Sustaining
– Exceeds
8.33
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
8.34
Brand Equity Report
Contents
Dashboards
Brand Equity Report
Contents
• A brand equity report should describe:
• What is happening with the brand?
• Why is it happening?
• Should include more descriptive market-level
information.
Dashboards
• Provides comprehensive but actionable summaries of
brand-related information.
8.36
Brand Equity Responsibilities
Organizational responsibilities and processes
that aim to maximize long-term brand equity
Establish position of VP or 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
8.37
Brand Equity Responsibilities
Overseeing Brand Equity
Organizational Design and
Structures
Managing Marketing Partners
Brand Equity Responsibilities
Overseeing brand equity
• To provide central coordination, the firm should:
• Establish a position responsible for overseeing the
implementation of the brand charter and brand equity
reports.
• Ensure that product and marketing actions across divisions
and geographic boundaries reflect their spirit as closely as
possible.
• Maximize the long-term equity of the brand.
8.39
Brand Equity Responsibilities
Organizational design and structures
• Firms may attempt to redesign their marketing organizations to
better reflect the challenges faced by their brands.
• To meet the challenges of changing job requirements and
duties, traditional marketing departments may be replaced by
business groups, multidisciplinary teams, and so on.
• New organizational structure aims to improve internal
coordination and efficiencies as well as external focus on
retailers and consumers.
8.40
Brand Equity Responsibilities
Managing marketing partners
• Performance of a brand is also dependent on the actions taken
by outside suppliers and marketing partners.
• Global trend indicates that firms are increasingly consolidating
their marketing partnerships and reducing the number of their
outside suppliers.
• Number of outside suppliers any firm will hire in any one area
depends on:
• Cost efficiencies
• Organizational leverage
• Creative diversification affect
8.41