MFM II FBM IX-X
Transcript of MFM II FBM IX-X
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What is Brand Equity?Brand equity is a set of assets (and liabilities) linked to a
brand that adds to (or subtracts from) the value provided
by a product or service to a firms customers.
Components of Brand Equity are :Awareness
Perceived Quality
Brand Associations
Brand Loyalty
Proprietary Brand Assets like trademarks , patents ,
channel relationships
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Brand Equity Theories
1.Young and Rubicam Brand Assets
Valuator (Y& R BAV)2.Brand Equity Ten by David Aaker
3.Interbrand
4.CBBE
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Young and Rubicam Brand
Assets Valuator Differentiation (Point of difference , How is the brand
different from the rest of the world, What does it offerwhich others are not offering)
Relevance (Is it relevant to significant segment, does itattract a large customer base , house hold penetration)
Esteem (Quality perception )
Knowledge (What brand stands for, awareness ,recognition , recall)
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Differentiation
Shoppers Stop :Experience
Inorbit Mall: Multi Anchor Stores
Ferrari : Sports Car
Pearsons :Low price edition
Aaj Tak , India TV : Masala News
NDTV : Intellectual News
Bose : Audio quality
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Relevance
Medicine Brands (Band-Aid, Crocin , Glycodin ,etc)
Apparel Brands (Arrow , Peter England , etc)
Consumer Durable Brands (LG , Videocon , etc)
FMCG Brands (Brands of HLL, P&G , etc)
Food and Grocery (Kissan , Annapurna , etc)
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Esteem and Knowledge
High esteem and Low knowledge( LuxuryBrands, The Pioneer , The Statesman ,etc)
Low Esteem and High Knowledge (Masala NewsChannel , Mumbai Mirror , etc )
High Esteem and High Knowledge (Maruti ,Santro , Financial Newspaper , etc)
Low Esteem and Low Knowledge :Local Brand
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Brand Strength and Stature Brand Strength=Differentiation*Relevance
Brand Stature =Esteem *Knowledge
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Brand Equity
Brand Equity= Brand Strength +Brand Stature Assuming 100 consumers were interviewed on these 4
parameters to measure Brand equity of Lifebuoy Brand ofPersonal wash Soap
40 people said this Brand is same as other Germ fighting
Brand and 60 said its different from other competingBrands (differentiation =0.6) 90 people said this Brand has high relevance
(relevance=0.9) 80 people said they know what this Brand stands for
(Knowledge=0.8) 90 people considered it a high quality Brand
(Esteem=0.9) Brand Strength=0.6*0.9=.54 Brand Stature=0.8*0.9=.72 Brand Equity=1.26
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The Brand Equity Ten(David Aaker)
1. Loyalty Measures
2. Perceived Quality /
Leadership Measures
3. Associations /
Differentiation
Measures4. Awareness Measure
5. Market Behavior
Measures
1. Price Premium
2. Satisfaction
3. Perceived Quality
4. Leadership / Popularity
5. Differentiation
6. Brand Personality association
7. Organizational Associations
8. Brand Awareness
9. Market Share
10. Market Price &
Distribution Coverage
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Price Premiums How much more or less customers are willing to pay for X
Brand in comparison with another brand of similar productcategory.
This amount of money (+ or -)is called price premiumassociated .
Price premiums are of two types -:positive and negative.
Positive : Extra amount that a customer is willing to pay toavail a brand compare to another Brand
Negative : How much less for a brand is available compareto another brand before one switches brand.
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Satisfaction Perceptual gap (Dissatisfied, satisfied,
delighted)
Repeat Customer Loyal Customer
Advocacy
The brand is the only , one of the brands,among the available brands that customerbuys and uses
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Perceived quality /Leadership
Quality perception
Consistent high quality
The best , one of the best , one of the worst ,the worst
In comparison to other brands this brand is growing in popularity
Leader / Challenger / follower/Niche
Respected for Innovation
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Association /Differentiation
Perceived value :The brand is good Valuefor money ,Reason to buy this brand overothers.
Personality: Interesting , Image , History ,Culture
Organization: Which organization is thisbrand attached (Trust , Proud , admire ,
pleased) Differentiation
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Awareness Recall ( What brands of Mobile can you
recall)
Recognition(Have you heard of Kar LoDuniya Muthi Mein)
Top of mind(the first named brand inrecall list)
Brand dominance (the only brandrecalled)
Graveyard statistics (recall level of thosewho recognized it)
Brand salience ( you have an opinion
about the brand)
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Market Behaviour
Market Share Relative Market Price
Percent of stores carrying the Brand
Percent of people who have access tobrands
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Interbrands Interbrand, a UK based consulting co.
Criteria includes business prospects and
brands market environment, as well as
consumer perceptions
Brands evaluated on 7 criteria: Leadership (25%)
Stability (15%)
Market (10%) International (25%)
Trend (10%)
Support (10%)
Protection (05%)
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Brand Strength:This is calculated on the basis ofseven weighted factors:
FACTOR WEIGHT IMPLICATION
Leadership 25% Is the brand a market leader in market share?
Stability 15% Does the brand have stable market share?
Market 10% Is the market in which brand operates stable?
Geographic
spread
25% Is the brand an international brand?
Trend 10% What is the long-term future of the brand?
Support 10% Is the brand actively promoted and supported by the
company?
Protection 5% Is it adequately protected by trademarks?
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Interbrands A consultancy firm was given a task to derive
brand equity of three competiting brands using
Interbrands .The data collected for three brands
is as follows:
Calculate Brand equity of all three brands
Brand LS STB MKT INTL TREND SUPPORT
PROT
A MLeader STB VM MNC EXcell HighS PROTN
B MC STB VM MNC EX MedS PROTN
C MFollower USTB VM DM EX LowS PROTN
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CBBE
Consumer Based Brand Equity
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The 4 Fundamental Questions Who are you? (Brand Awareness)
What do you do? (Brand Knowledge)
What do I think about you? (Brand Attitude)
What about you and me? (Brand Relationship)
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Brand Attitude
Brand Judgments
Quality: Smirnoff
Credibility: Apple
Consideration: Sony
Superiority: Intel
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Brand Attitude
Brand Feelings
Warmth: Archies
Fun: Disney
Excitement: MTV
Security: SBI
Social Approval: Mercedes Self-Respect: RbK
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Customer Based Brand EquityPyramid
Identity -Who
are You
Meaning-What
are YouPOP, POD
Brand
Consumer
Resonance
Consumer
Judgement
Consumer
Feeling
Brand
Salience
BrandPerformance
BrandImagery
Response- What
about You
Relationship- What
about You and me
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CBBE for Amazon
Books, Music & VideosBRAND AWARENESS Books, Music & Videos
Conv., Variety, Low Prices
For Every Internet User
Conv., Variety, Low Prices
BRAND
KNOWLEDGE
For EveryInternet User
Good Value / Credibility
Smart ShopperBRAND ATTITUDE Smart Shopper
good Value /Credibility
Loyalty, Community,Engagement
BRAND RELATION Loyalty, Community,Engagement
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Brand Valuation
Cost-based approaches consider the costs associated withcreating the brand including research and development of theproduct concept, market testing, promotion, and product
improvement. The accumulated cost approach will determine thevalue of the brand as the sum of accumulated costs expended onthe brand to date. This method is the easiest to perform, as all thedata should be readily available.
Market-based approaches are based on the amount for which a
brand can be sold. The open market valuation is the highest valuethat a willing buyer and willing seller is prepared to pay for theasset.
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Book to Market The book-to-market approach is used to estimate the
value of a brand by subtracting its book value from itsmarket value.
Book value is calculated by adding a companys totalassets and subtracting liabilities and intangible assets.
Market value is open market valuation
Brand valuation using book to Market can be calculatedas follows:
bv = mb
Where, bv is brand value
m is market value, and
b is book value
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Gross-profit Differential Method In this method the value of a branded product is
obtained by calculating the difference betweenthe price of that product and the average priceof similar non-branded products.
It tries to identify the value that is added by thebrand to the product.
However this is only a measure of the brandsstrength in the market.
bv = (pn) x
Where, bv is Brand Value
p is the avg. price of a branded unit
n is the avg price of similar non-branded product