MEASURING BRAND EQUITY

The New Accountability

Virtually every marketing dollar
spent today must be justified as
both effective and efficient in
terms of “return of marketing
investment” (ROMI).

1.2
Truth !!
Hardly any marketing
professional who is not worried
about what return will a specific
campaign bring about.

Some observers believe that up

to 70% (or even more) of
marketing expenditures may be
devoted to programs and
activities that cannot be linked
to short-term incremental profits,
but yet can be seen as improving
brand equity.
1.3
 The Brand Value Chain

Broader perspective than just the CBBE model

The brand value chain is a structured approach to assessing the

sources and outcomes of brand equity

Which marketing activities create brand value?

1.4
1.5
 Value Stages
Marketing program investment
◦ Any marketing program that can be
attributed to brand value development
◦ Marketing a product could be expensive
across various avenues available such as a
website, social media, print, magazines, or
hoardings.
◦ Product Research, Sales force management
etc. also adds to cost

Customer mindset
◦ In what way have customers been changed
as a result of the marketing program?
 Value Stages

Market performance
◦ How do customers respond in the marketplace?

Shareholder value
 Multipliers

Program quality multiplier

◦ The ability of the marketing
program to affect customer mindset

◦ Must be clear, relevant, distinct,

and consistent
 Program Quality Multipliers
Clarity
Did consumers understand the marketing program?
Do consumers properly interpret and evaluate its meaning?

Relevance
Is the marketing program meaningful to the consumer?
Do consumers feel the brand is one they should seriously consider?

Distinctiveness
How unique is the marketing program?
How creative or differentiating it is?

Consistency
How well integrated is the marketing program? Is the brand evolving
in the right direction?
1.10
 Multipliers

Customer multiplier
◦ The extent to which value
created in the minds of
customers affects market
performance

◦ It depends on factors such as

competitive superiority, channel
support, and customer size and
profile

1.12
 Customer Multiplier

Competitive superiority
 How effective are the marketing investments of competing brands?
 How strongly have competitors affected customer mindset?
 Are their brand equity stronger?

Channel and other intermediary support

 How much selling effort is being put forth by various channel partners?
 Are retailers helping to sell your brand?
 Are distributors motivated to lift your product? Channel conflict?

Customer size and profile

 How many and what types of customers are attracted to the brand?
 Are they profitable? (green fans being launched under magic when only 2% of the
consumers every year shift from regular category to green).
 Multipliers

Market multiplier
◦ The extent to which the
value generated through
brand market performance
is manifested in shareholder
value
◦ It depends on factors such
as market dynamics, growth
potential, risk profile, and
brand contribution
 Market Multiplier

Market dynamics
 Dynamics of financial market (Investors sentiment)

Growth potential
 Prospect of the brand, prospect of the industry, Analyze the micro/micro
environment. (External Opportunities).

Risk profile
 Risk profile for the brand? (External threats).

Brand contribution
 How important is the brand as part of the firms brand portfolio?

8.15
Brand Value Chain - Titan

Tanishq
Titan Watches
Eyewear
1.16
Company Performance

1.17
Company Performance

1.18
 Company Performance

92% rise in the stock price

Tanishq Price to earnings multiple of 90

1.19

Activities Done for Tanishq
Measures to achieve scale
Moving from Gold(margins
are just 10%) to Diamond
Started bigger showrooms
(from 2,000 sq. ft. to 2500 sq.
ft.)
Results
Brand Recall Increased
Bill Size increased to 1.5 lakhs
from 30,000
Further
Moved to Rs. 250,000
wedding jewellery market
 Launched Sub – brand Rivaah
1.20
 Major Challenge
Watch is a declining
category
Counter Move Result
Repositioning it as Fastrack Reflex Band sold
Wearable Device 200,000 units in 45 days
Market Further
India will account for 0.6% FY 2017 Rs. 2,028 cr.
of 200 million units of Own brands and
smart watch sales by 2020
FCUK, Tomy Hilfinger, Police
Fastrack is Fast Growing with a growth rate of 23%
1.21
 Key Points
Highest Margin
Long Growth Runway
Key Actions
Opened 472 Stores Pan - India
Started Lens manufacturing

1.22
 Other Actions
Moved Online
Got sales not less than
Rs. 360 cr. Sales through
Carat lane

Other Actions
Enetered Saree Business
Taneira is the Brand

1.23
1.25
1.27