Brand Measurement Chapter One An Introduction to Integrated Marketing Communications Brand Measurement © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Pros and Cons of Brand Measurement Advantages Disadvantages Avoid costly mistakes Cost of measurement Evaluate alternative strategies Research problems Increase efficiency in general Disagreement on what to test Determine if objectives are achieved Measure the wrong things Time

Brand Measurement: Marketers’ Views Issue Agree Brand Measurement is a key priority for today’s technology companies. 90% I am dissatisfied with our ability to demonstrate marketing programs’ business impact and value. 80% It is important to define, measure, and take concrete steps in the area of advertising accountability. 61.5% I can forecast the impact on sales of a 10% cut in marketing spending. 37%

Essentials of Brand Measurement Use a consumer response model Use benchmark testing Brand Measurement Establish communications objectives Understand and implement proper research Use multiple measures

Key to Evaluation Tie evaluations to objectives Like objectives, evaluation tools should be quantitative and statistically based Determine evaluation tools before implementation Get management buy-in up front

Two Evaluation & Measurement Strategies Brand Equity – brand assets (or liabilities) linked to a brand’s name and symbol that add to (or subtract from) a product or services* Brand Valuation – Assigning a dollar value to the brand “Brand Leadership”, Aaker and Joachimsthaler

Brand Equity Dimensions & Constructs Awareness Perceived Quality Association/ Differentia-tion Loyalty Market Behavior Brand Awareness Perceived Quality Perceived Value Price Premium Market Share Leadership Brand Personality Satisfaction Price Indices Organizational Associations Distribution Indices Aakers, David “Measuring Brand Equity Across Products and Markets”

Brand Equity Assessment Criteria Tap the full scope of brand equity Focus on sustainable advantages not easily duplicated by competitors Reflect the constructs that truly drive the market; are associated with future sales & profits Movement on a measure will move price levels, sales or profits Measures should be sensitive – when equity changes the measures reflect those changes Applicable across brands, product categories & markets Tested proven measures provide structure for developing a set of individual brand measures

Brand Awareness The level of brand recognition that consumers have of a particular brand and its specific product category Reflects the salience of the brand Awareness levels Recognition: Has heard of the brand Recall: Brands that can be named Top-of Mind: The first-named brand Brand Dominance: The only brand recalled Brand Knowledge: Knowing what the brand stands for Brand Opinion: A value judgment of the brand

Perceived Quality Special associations that occur in many contexts; empirically shown to affect ROI Associated with price elasticities and brand usage Associated with specific benefit variables Measured as a scale in comparison to alternative brands High vs. average vs. inferior The best vs. one of the best vs. one of the worst vs. the worst Consistent vs. inconsistent quality “Brand Leadership”, Aaker and Joachimsthaler; Aakers, David “Measuring Brand Equity Across Products and Markets”

Perceived Quality - Leadership Taps into market dynamics above quality Leadership Dimension The “Number 1” Syndrome Product Class Innovation Measured by scales The leading brand, one of the leading brands, not a leading brand Growing in popularity Innovative, first with advances

Brand Associations - Definition Anything that connects individuals to the brand. It can include User imagery Product attributes Organization considerations Brand personalities Symbols “Brand Leadership”, Aaker and Joachimsthaler

Brand Association - Value Focuses on the brand value proposition Brand value involves a functional benefit is usually basic to most brands in its class Brand value can be measured by Provides good value for the money Whether there are reasons to buy a brand over competitors

Precaution Is brand value different from perceived quality? Perceived quality/price? Brand value may relates more to functional benefits and utility Perceived quality may have a higher association with prestige

Association – Brand Personality Defined as “brand-as-a-person” Provides links to emotional and self-expression benefits Especially important where there are minor physical differences Continuum is often product specific Retail: Energy/Vitality Telephone companies: friendly/reliable Men’s products: rugged

Association – Organization Association Brand-as-an-organization – NFL, Major League Baseball, PGA Important basis for differentiation – product quality, innovation, credibility Any of these characteristics are candidates for measurement scales

Brand equity’s core dimension Brand Loyalty A consumer’s commitment to repurchase the brand When consumers like/consistently buy a specific brand Creates a barrier to entry Brand equity’s core dimension

Measuring Loyalty – Price Premium Price Premium – Amount a customer will pay vis-à-vis competing brands Negative Price premium can be good … Target vs. Macy’s Or what variables influence price A reasonable summary of brand strength Two measurements Dollar metric … How much are you willing to pay Conjoint analysis … based a series of choices More sensitive Seeks a “relative price

Brand Loyalty – Customer Satisfaction Measure on multiple dimensions specific to a product or service Auto: durability, fit & finish Financial Services: empathy, responsiveness Measured as intent to buy Would you buy this brand at the next opportunity? Would you recommend to others?

Market Behavior Precautions Market Share More elements than brand go into market share Often responsive to short-term strategies Price/Distribution Indices Different channels Complex competitive set

Where to From Here Develop a set of 4-8 constructs from the five dimension Establish a weighting system to accommodate relative importance Match the weighing system to perceived values of the target market

Communication Effective Research Direct Rating Method – Participants are directly asked to rate the advertisement Portfolio Tests – Participants view a variety of ads then they are asked to recall the ads and the contents. . Laboratory tests – Apparatus to measure the heart rates, blood pressure, perspiration as/after viewing ads to asses physiological reactions to messages

Quick & Dirty Ad Metrics Advertising Objective Quick & Dirty Metric Stimulate sales increase Inquires Inquires converted into sales Reinforce Awareness Test awareness pre/post advertising Number of enquiries Inform Focus group feedback Requests for further information Brand Image Brand recognition and perceived values surveys Loyalty and relationship Repeat purchase Levels of customer retention Mold/Reinforce Attitudes Measure changes in customer demographic profile Compare & contrast goods ordered by new purchasers Attitudinal surveys

9 Social Media Metrics Metric Twitter, Facebook, Blogs, Pintrist, Website Conversation rate Number of replies or comments to each post Referring traffic Monitors traffic sent to the website Total reach Total impress -- larger reach = increase the potential spread of your content Amplification rate Rate that your followers share your content with their networks (see above media) Applause rate Clicking on tweet links, “Liking” Facebook updates, Google++1 an entry, blog posts number of +1s, tweets and likes Quality of content Unique page views, time on page, and total pages viewed metrics. Conversion rate, share rate Sentiment Positive/Negative ratio; like/dislikes; key word content analysis (manual) Conversation Share Number/ratio of you conversations vs. competition Economic Value Sales, decreased costs, decreased call center use, increase CSR, improved conflict resolution …….

Coverage Mapping

Coverage Tone

Media Signal Media signal is an audience and feature weighted impact metric. It combines the estimated circulation/readership of the coverage with how prominently and frequently a company is featured within the coverage.

Brand Measurement Chapter One An Introduction to Integrated Marketing Communications Brand Measurement © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Precautions Perceived quality involves a competitor frame of reference Need to compare “apples to apples” … sub-compacts vs. luxury brands Segmentation issues … perception varies across customers vs. switchers vs. competitive loyalists It may not be the key driver It may not be sensitive to relevant events

Precautions Awareness is not equally important across categories Recognition is important for new companies Recall and top-of-mind important to mature categories/companies On its own provides an incomplete picture

Precautions Defined with respect to only one set of competitors Might miss an emerging competitor or an emerging variable Different competitors/variable in different markets … the Budweiser case Price differentiation is not relevant … legal restrictions, the Japan beer market

Precautions They do not apply to non-customers Do not measure brand equity beyond the customer base Satisfaction and loyalty become ambiguous when aggregated across customers, brand switchers and other brand loyalists

Precautions Not all product categories or brands have personalities Measurement may distort brand strength of products positioned for functional advantages Personality may be stable and not reflect change sensitivity

Precaution Important in some but not all cases May suffer from a lack of sensitivity

Precautions Not a simple construction; reflects market size, popularity & innovation Not as well-researched or documented as other dimensions … loyalty, quality, awareness Therefore, evidence that it is important enough to merit attention is weak Aakers, David “Measuring Brand Equity Across Products and Markets”