THE

BRAND EQUITY
NEWS AND GOSSIP WORLD EXCLUSIVES

WHAT IS BRAND EQUITY

The value of a brand, based on
the extent to which it has high
brand loyalty, name awareness,
According to David A. perceived quality, strong brand
Aker “Brand Equity is associations, and other assets
the value that a brand such as patents, trademarks,
generates to the and channel relationships.”
The term brand equity is used
product.”
mainly when we compare two
brands, and also when merger
and acquisition takes place.
 Measuring Brand Equity
Brand Equity
Brand Equity
Brand Knowledge

Cost-Based Price Based Consumer-

Brand image Based

Historical Cost Brand knowledge

Price Premium
Replacement Cost Attribute association
Equalization Price
Market Value Method Benefit association
Indifferent Price
Discount Cash flow Attitude association
Method
Loyalty measure
Brand contribution
Method Quality measure

Interbrand Method
 Cost Based Method
• Historical Cost- In this we calculate our whole expenditure
till date. Suppose Rs. 100 million have been spent so far in
creating a brand called ‘X’ . The value at which the brand can
be sold to another organization should be Rs. 100 million.
Here we do not mind time value of money and other factor to
create the bond.
Replacement Cost- How much would it cost to create a brand
with similar turnover, profitability, distribution, loyalty etc.
Replacement cost = Launch cost + Production and
administrative costs incurred over the years + Brand premium
acquired over the years due to brand loyalty, distribution etc.
It do not give guarantee that if the cost is same then market
share, quality and other function will be same.
 Cont.….
Market Value Method- This method used when Merger and
Acquisition takes place. Suppose Cibaca has been bought by
Colgate by 1310 million then what is the equity of Colgate.
Suppose Colgate has 17 times more turnover than Cibaca then
Equity of Colgate = 1310 * 17=22,270
Discounting cash flow method – This method consists of (1)
estimating cash flows that would accrue to a brand in future, (2)
converting these to present value using the Time value money.
Suppose estimated sales for the next 5 year is S1, S2, S3, S4, S5
and discount of 15% then present value of cash flow
P = S1/1.15 + S2/(1.15)2/ +………+S5/(1.15)5
 Cont.…
• Brand Contribution –This method tries to identify the value
that is added the “BRAND” to the product.
Brand Equity = K( Profits from the brand – profits for an
unbranded product in the same category)
Inter- brand Method – This method aims at arriving at a value
at which a brand can be sold by one company to another.
Brand Equity = (Weighted average of Brand profits * P/E of
industry * Brand strength)
Brand Strength depend on certain variable like leadership,
stability, internationality, support, protection, market and trend.
Brand strength score = total score of all variable/100
 Price Based
• Price premium method- This is done by comparing
(retail price of the “branded” product - retail price of an unbranded product.) .
The difference will be brand equity of that product.
Market share equalization method-

This method uses an ingenious way of

tackling the brand equity problem.

What are the prices at which the

market share for each of these brands
is equal? What is the point at which
40 people switch from Colgate and
distribute themselves among the other
brands equitably. This situation is shown
in the fallowing table
 Cont.….
• At this point, we have found situation
market shares are equal. The prices Brand Price No. of
people
here straight away give an indication using
of brand equity. If we divide the prices Colgate 24.50 25
in paise by ten we get the numbers in
Close – 22.50 25
the brand equity map. In other words, up
the brand equity of Colgate is equal Dabur 17.50 25
to 245 while that of Babool is 146.
Babool 14.60 25
 Price premium at
indifference
• This Method tries to compare the free prices of Brand at the point of
indifference.

• Brand Equity of Colgate =

•  
• Revised Price of Colgate
• 1 * 100
• Price of Promise

• Brand Equity of Babool=

• Revised Price of Babool
• 1 * 100
• Price of Promise
 Customer Based Brand
Equity
• Brand Knowledge- The structure and content of brand
knowledge influences consumer behavior. It has two
component. (1) Brand Awareness (2) Brand Image
• Brand awareness-Brand awareness plays an important role in
consumer decision making. It reflects the importance and the
impression of the brand in consumer mind. The different
levels or tools for measuring brand awareness are
• Brand recognition
• Bran recall
• Top of the mind
• Brand dominance
 Cont.
• Q1- Connect Santoor, Sundrop, Baby Soft, Shikakai, and
Yardley to a giant Umbrella company?
• Reckitt Benckiser
• Wipro
• HUL
• P&G
• Brand recognition-
Recognition means some
sense of familiarity which is
some times sufficient in
decision making at the point
of purchase.
• Brand recall- Brand recall refers to the ability to retrieve the
brand from the memory when some clue is provided.

• Punchline
• Sirf banking aur kuch nahi
• Working together for healthier world
• The power of knowledge
• Eat healthy, think better
• Top of the mind

• Amitabh Bachchan

• Abhishek Bachchan

• Priyanka chopra

• Shahrukh khan
 Brand dominance
BRAND/COMPANY CATEGORY

AMUL BUTTER
NOKIA MOBILE HANDSET

FAIR & LOVELY FAIRNESS CREAM

EUREKA FORBS VACUM CLEANER

 Cont.…
• Q2– Which country manufacture the largest number of laptops
in the world.
• India
• Malaysia
• China
• Taiwan
 Brand Image
• The image of a brand is how it is
perceived by the consumer. In fact,
it is these association which
differentiate one brand from another
in the mind. The image of brand
may different type of association.
• Attributes, Benefits, Attitudes
 Attribute Association
• Attributes are
descriptive features
which are used to
characterize a product
or service. For
instance how you will
described Refrigerator
and McDonald.
 Benefit Association
• Benefits are suggestion as to what a product or service can do for
them. These are intrinsic advantage of consuming a product. For
example functional advantage of a fridge is that it prevents food
from getting spoilt.

• Some punch line which shows functional benefit

• “ Powered by Intellect, Driven by values.”

“Infosys Technology”
“Quality in Everything we Do”
“Ernst & young”
 Attitude Association
• Attitude is an important psychological construct. Attitude
refers to overall evaluation of a concept like person, product,
object or a brand. There are 3 components in attitude.

• Cognitive- Knowledge perception that a has about brand

• Affective- Emotions or feelings that someone has toward a

brand.

• Conative- Behavioral or action oriented

• Q-3- This company was started in 1894 by a man who was
called the “Henry Ford of Eastern Europe”. The company was
also one of the official sponsor of the 1986 FIFA world cup,
Name it ?
• PUMA
• Liberty
• Adidas
• Bata
 Loyalty Measure
• Customer loyalty is the core
dimension of measuring
brand loyalty. Brand loyalty
can be indicated by two
factors
• Price Premium- it is the
amount that a customer want
to pay for the brand
comparison with other brand
offering similar benefits.
 Customer satisfaction
• Customer satisfaction is important factor for measuring brand equity.

• Are you people satisfied with Dell’s Vostro version?

• Are you satisfy with Dell’s service?

• Are you satisfied with coca – cola taste

• Which company’s cosmetic item you like most?

 Quality Measure
• Quality is another
important factor for
measuring Brand
Equity.
• How will you rank
the quality of these
product?
• This company has been awarded the most number of patents
for 16th year in a row . It has presence in over 170 countries
and even runs its own advertising channel on you tube. Which
company is in question.
• Apple
• Xerox
• Microsoft
• IBM
THANKING YOU……………

SANDIP MANDAL
SANTOSH TRIPATHI
SAPTAK DAS
SAPTARSI SANTIKARY
SATHAFUL SHAH CHOUDHARY