IIS (deemed to be UNIVERSITY)

Assignment of Brand Equity and Valuation

(MAM 425)

Customer based brand equity

Submitted by:
Submitted to: Bhawna Sharma
Dr. Shubha Meghwanshi MBA (ABM) – Sem IV
ICG/2018/26295
 BRAND EQUITY
Brand Equity refers to the additional value that a
consumer attaches with the brand that is unique from
all the other brands available in the market. In other
words, Brand Equity means the awareness,
perception, loyalty of a customer towards the brand.

E.g., The additional value a customer is willing to pay

for Uncle Chips against any local chips brand
available with the shopkeeper.
Customer based brand equity(Keller’s
framework)
Customer-based brand equity is defined as the differential effect that
brand knowledge has on consumer response to the marketing of the
brand. A brand has positive customer based brand equity when
consumers react more favorably to a product and the way it is
marketed when the brand is identified than when it is not. Therefore,
consumers might be more accepting of a new brand extension for a
brand with positive customer based equity, less sensitive to price
increases and withdrawal of advertising support, or more willing to
seek the brand in a new distribution channel. On the other hand. A
brand has negative customer based brand equity if consumers react
less favorably to marketing activity for the brand compared with an
unnamed or dishonestly named version of the product.
KEY terms

1.Differential effect: brand equity arises from differences in consumer

response. If no different occur, then the brand name product can essentially
be classified as a commodity or a generic version of the product.
Competition, most likely, would then just be based on price.

2.Brand knowledge: These differences in response are s result of

consumers’ knowledge about the brand, that is, what they have learnt, felt,
seen and heard about the brand as a result of their experience over time.
Therefore, even though strongly influenced by the marketing activity of the
firm, brand equity ultimately depends on what exist in the consumers’ mind.

3.Consumer response to marketing: customers who have differential

responses  to a brand that are reflected in perceptions and behavior related to
all aspects of brand marketing, including their choice of a brand, recall of
copy pints from an ad, response to a sales promotion, and evaluate of a
proposed brand extension.
Four Steps of brand building

Ensure identification of the brand with customers

and an association of the brand in customer’s minds
with a specific customer need.
Firmly establish the totality of brand meaning in the
minds of customers by strategically linking a mass of
tangible and intangible brand associations with certain
properties.
Extract the proper customer responses to this brand
identification and brand meaning
Convert brand response to create an intense active
loyalty relationship between customers and the brand.
BRAND
EQUITY
MODELS
 AAKER MODEL
•The Aaker Model, created by David A. Aaker, a marketing professor at
the University of California-Berkeley and a management consultant at
Prophet, is a marketing model which views brand equity as a
combination of brand awareness, brand loyalty and brand associations,
which add up to give the value provided by a product or service.
•Aaker defines the brand equity as the set of brand assets and
liabilities linked to the brand - its name and symbols -that add value
to, or subtract value from, a product or service.

BRAND EQUITY = BRAND AWARENESS + BRAND LOYALTY + BRAND ASSOCIATION +

PERCEIVED QUALITY + OTHER PROPRIETARY ASSETS
 The extent to which people are loyal to a brand is
expressed in the following factors

 Reduced marketing costs : hanging on to loyal

customers is cheaper than charming potential new
customers
 Trade leverage : loyal customers represent a stable
source of revenue for the distributive trade
 Attracting new customers : current customers can help
boost name awareness and hence bring in new customers
 Time to respond to competitive threats : loyal
customers that are not quick to switch brands give a
company more time to respond to competitive threats
 The extent to which a brand is known among
the public, which can be measured using the
following parameters

 Anchor to which associations can be attached : depending on the

strength of the brand name, more or fewer associations can be
attached to it, which will, in turn, eventually influence brand
awareness
 Familiarity and liking : consumers with a positive attitude towards
a brand, will talk
about it more and spread brand awareness
 Commitment to a brand.
 Brand to be considered during the purchasing process : to what
extent does the
brand form part of the evoked set of brands in a consumer’s mind
 The extent to which a brand is considered to
provide good quality products can be measured on
the basis of the following five criteria

 The quality offered by the product/ brand is a reason to buy it

 Level of differentiation/ position in relation to competing brands
 Price : as the product becomes more complex to assess, and status is at
play, consumers tend to
• take price as a quality indicator
 Availability in different sales channels : consumers have a higher
quality perception of brands that are widely available
 The number of line/ brand extensions : this can tell the consumer the
brand stands for a certain
• quality guarantee that is applicable on a wide scale
 Associations triggered by a brand can
be assessed on the basis of the five
following indicator

 The extent to which a brand name is able to ‘retrieve’ associations from

the consumer’s brain : such information from TV advertising
 The extent to which association contribute to brand differentiation in relation
to the competition : these can be abstract associations, such as ‘vitality’, or
associations with concrete product benefits, such ‘will leave your washing
cleaner’
 The extent to which brand associations play a role in the buying process
: the greater this extent, the higher the total brand equity
 The extent to which brand associations create positive attitude/ feelings :
the greater this extent, the higher the total brand equity
 The number of brand extensions in the market : the greater this number, the
greater the opportunity to add brand associations
BRAND ASSET VALUATOR
Brand Asset Valuator (BAV) is a metric applied for
the measurement of brand value of an entity. Brand
Asset Valuator was developed by an agency called
“Young and Rubicam”. BAV measures a brand under
the 2 broad heads of:

1. Brand Vitality which refers to the current and

future growth potential that a brand holds in it.

2. Brand Stature which refers to the power of a brand.

Four key pillars of
brand equity

•Differentiation
•Relevance
•Esteem
•Knowledge
Differentiation

•Has your brand attracted

consumers attention more than
your competitors?

•When customers come across

your brand, do they recognize your
brand, and how different it is from
your competitors?
 Relevance
Is actual & perceived value importance of
brand to a larger segment?

Is your product relevant to consumers in

regards to price, convenience, and
fulfilling their needs?

How likely they would be to purchase your

product or service, regardless of whether or
not they have purchased your product or
service in the past?
 Esteem
• Esteem is the perceived quality and
customer perceptions about
growing/declining popularity of a brand

• Does the brand keep its assurances?

• The customer’s response to a
marketers’ brand building activity
is driven by his perception of two
factors; quality and popularity
 Knowledge

• Knowledge measures the extent of the

customer’s awareness of the brand and
understanding of its identity

• The awareness levels about the brand and what

it st ands for shows the familiarity that
consumers share with the brand.
 Brand Strength is an
important indicate or of
future potential &
Relevan performance.
ce
Bran Relevant Differentiation is
the major challenge for
d brands and an important
indicator of brand health.
Differentia Streng
tion These two pillars point to
th the brand’s future value,
rather than just reflecting its
past
Estee
m Esteem and
Knowledge
Bran together create
Brand Stature,
d which is more of a
report on past
Knowled Statu performance
ge

re
 BAV Model
Dynamics
Differentiation>Releva Relevance>Differentiat
nce ion

You are in a mass segment

Attract more trials to induce competing on
relevance price/convenience

Knowledge>E
Esteem>Knowl steem
edge
Pre conceived notions can be
Well regarded,desire to detrimental incase of negative
purchase WOM
Brand Resonance Pyramid
• Brand Salience : Indicator of Brand Awareness
 The brand salience means, how well the
customer is informed about the product
and how often it is evoked under the
purchase situations?
 The marketer should not only focus on just
creating the awareness about the product
but also includes the ease with which the
customers can remember the brand and
the ability to recall it under the different
purchase situations.
• Brand Performance:

 The Brand performance means, how well the

functional needs of customers are met?
 At this level of the pyramid, the marketers
check the way in which product is performing
and how efficiently it is fulfilling the needs of
the customers.
 •Brand Imagery:

 The Brand Imagery means, what product

image the customer create in their minds?

 This aspect deals with the customer’s

psychology or the feelings that how they relate
to the product in terms of their social needs.
•Brand Judgments

The Brand Judgement means, What

customer decides with respect to the product?
The customers make the judgment about the
product by consolidating his several
performances and the imagery associations
with the brand.
On the basis of these, the final judgment is
made about the product in terms of its
Perceived Quality, Credibility, Consideration,
and Superiority.
•Brand Feelings

The Brand feelings means, what

customers feel, for the product or
how the customer is emotionally
attached to the product?
The consumer can develop
emotions towards the brand in
terms of fun, security, self-respect,
social approval, etc.
 •Brand Resonance
The Brand Resonance means, what psychological
bond, the customer has created with the brand?

This is the ultimate level of the pyramid, where every

company tries to reach.
Here the focus is on building the strong relationship
with the customer thereby ensuring the repeated
purchases and creating the brand loyalty.
The resonance is the intensity of customer’s
psychological connection with the brand and the
randomness to recall the brand in different
consumption situations.
THANK YOU!!