Brand Equity:Brand Equity: Measuring & Linking … Brand Equity_AMA 2007.pdfBrand Equity:Brand...

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reserv

September 2007

Brand Equity:Brand Equity:Measuring & Linking toMeasuring & Linking to

Business OutcomesBusiness Outcomes

Brand Equity:Measuring & Linking to Business Outcomes

“Marketing is the art of brand building.”

“If you are not a brand, you are acommodity. And then price is everything.”

Source: Philip Kotler, “Building Your Brand” Inc. Magazine SeminarS.C. Johnson Distinguished Professor of International MarketingKellogg School of ManagementNorthwestern Univerisity©

Measure

Extend

Typical Issues In Brand Equity Research©

Topics for Discussion

Setting the Stage

Background & Definitions

Brand Equity Framework

Taking Action

Measurement

Management

Putting It All Together

Wrap Up

Brand Equity is produced by the cumulative, historical effect ofyour marketing mix on your target markets.

If the marketing mix has been effective at differentiating yourbrand from competitors, then buyers will assign more value toyour brand.

The more “value” assigned to your brand, the greater its ability toboth acquire and retain customers.

Improving acquisition and retention leads to higher brand value.

Point of View on Defining Brand Equity©

Willingness toPay More

Larger ShareOf Wallet

The Brand Equity Payoff

BrandBrandEquityEquity

$$$$©2

The NUMMI plant in California produced two nearly identical modelscalled the Toyota Corolla and the Chevrolet Prizm.

Toyota sold 230,000 Corollas compared to sales of 52,000 Prizms.

Toyota’s net price $650 higher!

>Source: Philip Kotler, “Building Your Brand” Inc. Magazine SeminarS.C. Johnson Distinguished Professor of International MarketingKellogg School of ManagementNorthwestern University

The Brand Equity Payoff©

Brand Equity Framework

BrandEquityBrandBrandEquityEquity AcquisitionAcquisitionAcquisition

RetentionRetentionRetention CustomerValue

CustomerCustomerValueValue

BrandValueBrandBrandValueValue

DifferentiationDifferentiationDifferentiation

MarketingEfforts

MarketingMarketingEffortsEfforts

Regard

Recognition

BrandEquity Acquisition

Retention CustomerValue

BrandValue

Differentiation

Regard

Recognition

MarketingEfforts

Linking Brand Equity to Business Outcomes

0 10 20 30 40 50 60 70 80 90 100

Brand Equity Score

BusinessOutcome

Areas of Exploration:

Online Panel

24 Brands

Business Week Annual Ranking of MostValuable Brands

Total Sample = 5,476

Random Assignment 2 Brands

Total N Per Brand = 450

Users = 225

Aware Non-Users = 225

Burke Brand Equity R&D

Awareness

Familiarity

Loyalty

EmotionalConnection

Quality Performance

Value Reputation

Personality

Burke Brand Equity R&D©

BrandEquity

Measuring Brand Equity

Responsibility

Stability

Loyalty

RecognitionRecognitionAidedAware

UnaidedAware

RegardRegard

Brand Equity Score

ActualMarketShare

There Is A Strong Relationship BetweenBrand Equity and Market Share

Linking Brand Equity To Business Outcomes- Market Share -

Source: Burke R&D, 2006

040 45 50 55 60 65 70 75

Performance on Brand Equity ScoreSource: Burke R&D, 2006

Linking Brand Equity To Business Outcomes- Brand Value -

Brands With Superior Brand Equity Are Worth More $$

Top Third

$9.7Average

Brand Value(Billions of $$)Source: BusinessWeek

Middle Third Bottom Third

Alternatives for Strategic Initiatives

Strategic initiatives to improve Brand Equity can focus on three stages ofthe purchasing process:

Recognition

Retention

Acquisition

Understanding a Brand’s strengths and opportunities within each ofthese stages aids in the decision as to which stage should be the focusfor improvement strategies.

Focus for Improvement Strategy for Improvement

Improve Marketing Communications

Prioritize Drivers of Acquisition

Prioritize Drivers of Retention

Many approaches exist to measure the impact of performance measures on overallBrand Equity.

The key to prioritize improvement initiatives is to understand what is the benefit of aperformance improvement and what is the cost of a performance decrement.

Prioritizing Opportunities for Improvement

Greater Penalty

Greater Reward

EquivalentPenalty &Reward

Attribute Impact

CriticalImprovement

IssuesH

Prioritizing Opportunities for Improvement

PerformanceBetterWorse

Interpretation

MaintenanceIssues

SecondaryIssues

Lower PriorityIssues

Non-Customers

Non-CustomersCV=$100

Non-CustomersCV=$500

RetentionRetentionRetentionAcquisitionAcquisitionAcquisition

Recognition

Linking Brand Equity to Customer Value

Brand Equity Profile

Regard

AwareAwareNot

NotAware

CategoryBuyers

CustomerCustomerValueValue

Key Discussion Points

Brand Equity is determined by two guiding forces:

Recognition

Regard

Regard is a multi-dimensional construct, comprised of Loyalty, Trust,Responsibility, Stability, Value and Pride.

Strategies for Improvement center on a brand’s opportunity tostrengthen its market presence, its ability to acquire new customersand its ability to retain existing customers.

Joelle SchwartzPhone: 513-684-7732

joelle.schwartz@burke.com

For More Information

For a copy of this presentation, or for materials on other topics,please visit our website at www.burke.com

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