BRAND EQUITY

THE BRAND AS AN ASSET

ALL

BRANDS ARE INTANGIBLE

ASSETS AND HENCE ARE
FUTURE GENERATORS OF
CASH FLOWS.

MANAGING AN ASSET

WHAT

ARE THE THINGS ONE

HAS TO DO WHILE MANAGING
ANY ASSET?

MANAGING AN ASSET

ENSURE THAT THE ASSET IS

WORKING FINE. REPAIR FAULTS, IF
ANY.
TRACKING THE CHANGE IN VALUE OF
THE ASSET. REPLACE OR INVEST IF
NECESSARY.
4

MANAGING AN ASSET

DAGMAR, BAV ETC. ARE THE CHECKS IF

THE ASSET IS WORKING FINE. ITS THE
PREVENTIVE MAINTENANCE OF THE
BRAND ON AN ONGOING BASIS.
FREQUENCY OF MAINTENANCE
DEPENDS ON THE VALUE OF THE
ASSET.
5

MANAGING AN ASSET

WE NOW MOVE TO THE SECOND

PART OF MANAGING AN ASSET
TRACKING THE VALUE OF THE
ASSET.

WHY?
WHY

IS THERE ALL THIS

RECENT ATTENTION ON
BRAND EQUITY?

WHY BRAND EQUITY?

THE NEED FOR ACCOUNTABILITY
FOR THE MARKETING FUNCTION.
ERGO: THE RETURN ON
INVESTMENT FOR MARKET
SPEND.

WHAT IS BRAND EQUITY?

SO:

WHAT IS BRAND EQUITY?

BRAND EQUITY
OUTCOMES

THAT ACCRUE TO
A NEED / WANT SATISFIER
WHEN THE BRAND NAME IS
ADDED ON. ERGO, YOUR
INSULATOR.
10

OUTCOMES?
AND

FOR A COMMERCIAL
BRAND, WHAT ARE THESE
OUTCOMES?

11

OUTCOMES

CAPABILITY TO CHARGE A PREMIUM.

CAPABILITY TO INCREASE SALES.
CAPABILITY TO GET A DISCOUNT.
CAPABILITY TO WITHSTAND ATTACKS
LIKE PRICE CUTS, SALES PROMO
SCHEMES, MARGIN ATTACKS.
12

COME TO THE POINT!

WHY

WASTE TIME DOING ALL

THIS WONT MEASURING
SALES OR MARKET SHARE
SIMPLY BE BETTER?

13

THE COUNTERPOINT

SALES LOOKS AT HISTORY THIS MAY

NOT ALWAYS BE THE BEST INDICATOR
OF THE FUTURE. IGNORES IMPACT OF
INCREASED COMPETITION.
SALES COULD BE BOUGHT BY USING
SHORT TERM MEASURES LIKE SALES
PROMOTION.
14

THE COUNTERPOINT

IN OTHER WORDS, WE NEED TO

LOOK AT SHORT TERM CASH
FLOW VERSUS LONG TERM CASH
FLOW GENERATION.
15

CONSTRUCTING A MODEL

KEY CRITERIA FOR A MODEL OF

BRAND EQUITY:

LIKE MARKET SHARE, SHOULD HAVE A

BOTTOM LINE IMPACT.
UNLIKE MARKET SHARE, SHOULD BE
ABLE TO GIVE PRESCRIPTIONS.
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CONSTRUCTING A MODEL

GIVEN BELOW ARE MARKET SHARES

FOR THREE BRANDS:

A: 26%
B: 34%
C: 40%
17

ROBUSTNESS

WHAT OTHER INFORMATION WILL

YOU NEED TO PREDICT ROBUSTNESS
OF THE BRAND IN THE SHORT RUN?

18

SHORT RUN ROBUSTNESS

THE BREAK UP OF MARKET SHARE

FROM LOYAL CONSUMERS.
THE WILLINGNESS TO PAY A
PREMIUM.

19

LONG RUN ROBUSTNESS

HOW WOULD YOU DEFINE LONG RUN

ROBUSTNESS?

20

LONG RUN ROBUSTNESS

BRAND LEVERAGIBILITY OR THE

CAPABILITY TO STRADDLE OTHER
NEED OR WANT SATISFIERS. ALSO
CALLED BRAND ELASTICITY. WHEN
IS THIS NEED ACUTE?
21

LONG RUN ROBUSTNESS

THE CLOSER WE ARE TO MATURITY,

THE MORE ACUTE THIS NEED IS.

22

BRAND EQUITY METRICS

MEASUREMENT OF LOYALTY.
MEASUREMENT OF PRICE PREMIA.
MEASUREMENT OF LEVERAGABILITY.

23

LOYALTY METRICS

COLOMBO MORRISON MODEL.

SHARE TIER APPROACH.

24

PREMIA METRICS

BRAND PRICE TRADE OFF (BPTO).

VAN WESTENDORP PRICE
SENSITIVITY METER.

25

LEVERAGABILITY METRICS

COVERED IN THE SESSION BRAND

EXTENSIONS WHERE THE MILLWARD
BROWN OPTIMOR MODEL WAS
DISCUSSED.

26

COLOMBO MORRISON MODEL

WORKS WELL FOR CATEGORIES

WHERE BRAND LOYALTY IS MEDIUM
TO HIGH.

27

COLOMBO MORRISON MODEL

RESPONDENT IS ASKED 2 QUESTIONS

WHAT IS THE PREFERRED BRAND
AND WHAT IS THE LAST BRAND
PURCHASED? A VARIANT USES LAST
5 BRANDS PURCHASED.
28

COLOMBO MORRISON MODEL

BASED ON THIS, WE GET A 2 BY 2

MATRIX.

29

THE 2 BY 2 MATRIX
Preferre
d
Brand

No. of
Purch.

Sunfea
st

Britannia

Parle

Others

Total

Sunfeast

26

21

59

Britannia

29

88

21

147

Parle

16

18

52

11

16

72

122

48

32

274

Others
Total

30

INTERPRETING THE DATA

THE BOTTOM ROW GIVES US MARKET

SHARES.
THE LAST COLUMN GIVES US THE SHARE
OF PREFERENCE.

31

INTERPRETING THE DATA

THE DIAGONALS (IN YELLOW) GIVE US

POINTERS TO LOYALTY AND THERE ARE
TWO RATIOS THAT EMERGE.
LET US TAKE BRITANNIA.

32

INTERPRETING THE DATA

OF THE 147 WHO PREFER BRITANNIA, 88

PURCHASED IT LAST (60%). THIS RATIO IS
CALLED GRAVITY
OF THE 122 WHO PURCHASED THE BRAND,
IT WAS THE PREFERRED BRAND FOR 88
(72%). THIS RATIO IS CALLED FOCUS.

33

THE RATIOS
Gravity ()

Focus ()

Sunfeast

44%

36%

Britannia

60%

72%

Parle

35%

38%

Industry

52%

52%

Industry minus
Britannia

43%

36%

34

INTERPRETING THE DATA

THE RATIO FOR THE INDUSTRY GIVES

THE EXTENT OF LOYALTY FOR THE
CATEGORY.
BRANDS CAN USE THAT AS THE
BENCHMARK.
35

INTERPRETING THE DATA

WHAT DO THE GRAVITY AND FOCUS

RATIOS TELL US ABOUT THE THREE
BRANDS?

36

SHARE TIER MODEL

REEBOK.
PUMA.
ADIDAS.
NIKE.
37

QUALITY

RATE THE BRANDS BASED ON

QUALITY (SUPERIOR = Q1, GOOD
= Q2, ACCEPTABLE = Q3, POOR
= Q4).
38

PRICE

RATE THE BRANDS BASED ON PRICE

(PRICE NOT A BARRIER = P1, PRICE
IS A MINOR BARRIER = P2, PRICE IS A
MAJOR BARRIER = P3, PRICE IS AN
ABSOLUTE BARRIER = P4).
39

BELIEFS

THIS REFLECTS YOUR BELIEFS ABOUT

THE BRAND.

40

PURCHASE

WHICH BRAND WILL YOU PURCHASE?

41

PURCHASE

THIS REFLECTS YOUR BEHAVIOUR.

42

OUTPUT

TABULATE Q1P1, Q1P2, Q1P3, Q1P4

Q4P4 FOR THE CATEGORY.
REPEAT FOR INDIVIDUAL BRANDS.

43

INTERPRETING THIS

THE BEST QUADRANT IS Q1 P1

ALSO KNOWN AS THE TOP BOX.
WILL BE CHARACTERISED BY HIGH
LOYALTY.

44

INTERPRETING THIS

WHAT IS THE INTERPRETATION OF

THE QUADRANTS P1 Q2, P1 Q3 AND
P1 Q4?.
WHAT ARE THE LOYALTY
PREDICTIONS?
45

INTERPRETING THIS

WHAT IS THE INTERPRETATION OF

THE QUADRANTS Q1 P2, Q1 P3 AND
Q1 P4?.
WHAT ARE THE LOYALTY
PREDICTIONS?
46

STORE DATA

MARKET RESEARCH AGENCIES TIE UP

WITH MODERN RETAIL TO MAINTAIN
CONSUMER PANEL DATA.

47

STORE DATA

STORE DATA WILL GIVE YOU THE %

OF LOYAL CUSTOMERS IN EACH BOX
AND THE MOVEMENTS OVER TIME.

48

LOYALTY?

THIS METHOD LOSES POTENCY

WHEN THE MEAN TIME BETWEEN
PURCHASES IS VERY HIGH.

49

VAN WESTENDORP METHOD

VAN WESTENDORPS METHOD ASKS

4 QUESTIONS WHICH ARE VERY
SIMILAR TO THE QUESTIONS ASKED
IN THE SHARE TIER MODEL.

50

VAN WESTENDORP METHOD

AT WHAT PRICE IS THE PRODUCT:

TOO EXPENSIVE TO BUY?

TOO LOW QUALITY IS SUSPECT?
GETTING EXPENSIVE NEED TO THINK
BEFORE YOU BUY.
A BARGAIN GOOD VALUE FOR MONEY.
51

VAN WESTENDORP METHOD

IF THIS QUESTION IS ASKED FOR

INDIVIDUAL BRANDS, ONE WILL GET
DATA ON PRICE POINTS FOR ALL
BRANDS FOR EACH OF THE 4
SCENARIOS.
52

VAN WESTENDORP METHOD

THE CUSP BETWEEN A BARGAIN AND

GETTING EXPENSIVE WILL GIVE THE
OPTIMUM PRICE AND THIS WILL
GIVE IT FOR ALL BRANDS.

53