Management Mustangs Strategic Brand Management Module - 5

DEVELOPING A BRAND EQUITY MEASUREMENT AND MANAGEMENT SYSTEM A brand measurement system is a set of research procedures designed to provide timely,accurate, actionable and information of brands for marketers so that they can make the best possible tactical decisions in the short run and strategic in the long run. The goal in developing a brand equity measurement system is to able to achieve a full understanding of the sources and outcomes of brand equity and be able as much as possible to relate the two.

A brand equity measurement system introduction requires two critical steps : Designing brand tracking studies Establishing a brand equity management system NEED FOR BRAND EQUITY MEASUREMENT SYSTEM:  It provide complete, up to date and relevant information for marketers.  Helps to take right decision at right time.

The Brand Value Chain The Brand Value Chain is a structured approach to assessing the sources and outcomes of brand equity and the manner by which marketing activities create brand value. The model assumes that the brand value creation process begins when the firm invests in a marketing program targeting actual or potential customers. The associated marketing activity then affects the customers mindset. This mindset, across a broad group of customers, produces the brand’s performance in the market place. Finally, the investment community considers this market performance and other factors to arrive at an assessment of shareholder value in general and a value of the brand in particular.

The Brand Value Chain The model also assumes that a number of linking factors intervene between these stages. These linking factors determine the extent to which value created at one stage transfers or ‘Multiplies’ to the next stage.

The Brand Value Chain Marketing Program Investmen t Customer Mindset Market Performanc e Shareholder value Investor sentiment Marketplace Conditions Program Quality Value Stages Multiplier

Marketing Program Investment Any marketing program investment that can contribute to brand value development, intentionally or not, falls into this first value stage. Marketing activities such as product research, development & design; trade or intermediary support ; marketing communications including advertising, advertising, promotion, sponsorship, direct and interactive marketing, personal selling, publicity and public relations and employee training.

Program Quality Multiplier The ability of the marketing program to affect the customer mindset will depend on its quality. The means to judge the quality of a marketing program are – Clarity – Relevance – Distinctiveness – Consistency A well integrated marketing program, carefully designed and implemented to be highly relevant and unique, is likely to achieve a greater return on investment from marketing program expenditures.

Customer Mindset The customer mindset includes everything that exists in the minds of customers with respect to a brand: Thoughts, feelings, experiences, images, perceptions, beliefs and attitudes. Five dimensions have emerged as important measures of the customer mindset : Brand Awareness Brand Associations Brand Attitudes Brand Attachment Brand Activity An hierarchy exists in the dimensions of Value: Awareness supports associations, which drive attitudes that lead to attachment and activity.

Marketplace conditions Multiplier The extent to which value created in the minds of customers affects market performance depends on factors beyond the individual customer. Three such factors are: Competitive superiority Channel and other intermediary support Customer size and profile The value created in the minds of customers will translate to favorable market performance when competitors fail to provide a significant threat, when channel members and other intermediaries provide strong support and when sizable number of profitable customers are attracted to the brand.

Market Performance The customer Mindset affects how customers react in the market place in six main ways. Price premiums Price elasticities Market share Brand expansions Cost structure Brand profitability

Investor Sentiment Multiplier Financial analysts and investors consider a host of factors in arriving at their brand valuations and investment decisions. Among them are the following: Market dynamics Growth potential Risk profile Brand contribution

Shareholder Value Based on all current and forecasted information about a brand, as well as many other considerations, the financial marketplace formulates opinions and assessments that have very direct financial implications for the brand value. Three particularly important indicators are the Stock price, the price/earnings multiple and overall market capitalisation for the firm. Research has shown that not only can strong brands deliver greater returns to stockholders, they can do so with less risk.

Designing Brand Tracking Studies Tracking studies involve information collected from consumers on a routine basis over time. Tracking studies are a means of applying the brand value chain to understand where, how much, and in what ways brand value is being created, thus offering invaluable information about how well a positioning has been achieved.

Types of Tracking Product Brand Tracking Tracking an individual branded product involves measuring brand awareness and image for the particular brand. Corporate or Family Brand Tracking Some additional questions included in tracking studies for individual products for the brand. Global Tracking Its involves diverse geographic markets.

How To Conduct Tracking Studies Who to track When and where to track

How To Interpret Tracking Studies Tracking measures must be reliable and sensitive To develop sensitive tracking measures it may be necessary to phrase questions in a comparative or temporal. Tracking studies is to identify the determinants of brand equity.

Challenges: Challenge in interpreting tracking studies is to decide on appropriate bench marking Traditional measures of marketing phenomenon is that they don’t change much over time.

Establishing Brand Equity Management System A brand Equity Management system is a set of organizational process designed to improve the understanding and use of the brand equity concept within the firm.

Brand Equity Charter The fist step in establishing a brand equity management system is to formalize the company view of brand equity into a document, the brand equity charter, that provides relevant guidelines to marketing managers. Define firms view of brand equity concept and explain why it is important. Describe the scope of key brands in terms of associated products and the manner by which they have been branded and marketed.

Specify what is the actual and desired equity is for a brand Explain how brand equity is measured in terms of the tracking study and the resulting brand equity report. Suggest how marketers should manage brand equity with some generic guidelines Outline how to device marketing programs Specify proper treatment of the brand in terms of trademark usage, packaging and communication

Brand Equity Report The second step in establishing a successful brand equity management system is to assemble the results of tracking survey and other relevant performance measure of the brand into the brand equity report The brand equity report should describe what is happening with the brand as well as why it is happening.

Brand Equity Responsibilities To develop brand equity management system that will maximize long term brand equity, managers must clearly define organizational responsibilities and processes with respect to the brand. Brands need constant, consistent nurturing to grow. Overseeing brand equity Organizational design and structure Managing marketing partners.

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