 “Return of marketing investment” (ROMI).

 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.

 The deceiving quarterly results and CEOs

 Jonathan Knowles:
 To qualify as an asset, marketers need to measure its
ability to generate future cash flows.

 Brand equity should be measured in such a way that

captures the source and scale of the emotional
component the brand adds to the functionality of the
product.

Direct Approach: Assesses the actual impact
of brand knowledge on consumer response to
different aspect of marketing program

 Indirect Approach: Assesses the potential

sources of customer based brand equity by
identifying and tracking consumers brand
knowledge- thought, feelings, images,
perceptions and beliefs
 Broader perspective than just the CBBE model

 Structured approach to assessing the

sources and outcomes of brand equity
and the manner by which marketing activities
create brand value.
 Brand Value Chain

Marketing Customer Market Shareholder

VALUE Program Mindset Performance Value
STAGES
Investment
- Price premiums
- Product - Awareness - Stock price
- Price elasticity
- Communications - Associations - P/E ratio
- Trade - Market share
- Attitudes - Market capitalization
- Employee - Category Expansion
- Attachment
success
- Other - Activity
- Cost structure/Reduced Expense
- Profitability

Program Consumer Market

FILTERS Multiplier Multiplier Multiplier

- Clarity - Channel support - Market dynamics

- Relevance - Consumer size and profile - Growth potential
- Distinctiveness - Competitive reactions - Risk profile
- Consistency - Brand contribution
 1993 1997 1999 2001 2003
Marketing program
investment
Advertising (LNA millions) 3.73 13.48 12.24 - -
Number of Outlets 272 1412 2498 4709 8569
Customer Mind-set
BAV Strength 0.6 1.5 1.8 2.4 2.7
BAV Stature 2.4 6.7 10.1 13.4 13.6
Marketing Performance
Sales (Million- net) -- $975 $1680 $2600 $3500
Shareholder value
Stock price 2.78 4.80 6.06 9.53 16.40
Market Cap (millions) $621 3034 4445 8400 9700
 Marketing program investment
 Any marketing program that can be attributed to
brand value development
 Customer mindset
 In what way have customers been changed as a result
of the marketing program?
 Market performance
 How do customers respond in the marketplace?
 Shareholder value
 Program quality multiplier
 The ability of the marketing program to affect customer
mindset
 Must be clear, relevant, distinct, and consistent
 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
 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
 A set of research procedures that is designed
to provide timely, accurate, and actionable
information for marketers so that they can make
the best possible tactical decisions in the short
run and strategic decisions in the long run
 Conducting brand audits

 Developing tracking procedures

 Designing a brand equity management system

 Brand Inventory

 Brand Exploratory

8.14
 Tracking studies involve information collected
from consumers on a routine basis over time

 Often done on a “continuous” basis

 Provide descriptive and diagnostic information
 Customize tracking surveys to address the
specific issues faced by the brand
 Product-brand tracking (Recall and Recognition)
 Corporate or family brand tracking
 Global tracking (Study of Economic,
Technology, Retail, Media, Infrastructure
indicators)
 How well managed is TATA Motors?

 How easy it is to business with TATA Motors?

 How concerned is TATA about its customers?

 How approachable is TATA motors?

8.17
 Who to track (target market. Consumers and non-consumers)
 When to track (how frequently)
 Depends on frequency of purchase
 How to interpret brand tracking
 “Compared to other brands how much….”
 “Compared to one year ago, how much….”
 Setting or defining benchmark
 Be more concerned about “Don’t know”, “No
response” answers as, they indicate that consumers
don’t care.
 A brand equity management system is a set of
organizational processes designed to improve
the understanding and use of the brand equity
concept within a firm:
 Brand equity charter
 Brand equity report
 Brand equity responsibilities
 Provides general guidelines to marketing
managers within the company as well as key
marketing partners outside the company
 Should be updated annually
 Define the firm’s view of the brand equity
 Describe the scope of the key brands
 Specify actual and desired equity for the brand
 Explain how brand equity is measured
 Suggest how brand equity should be measured
 Outline how marketing programs should be
devised
 Specify the proper treatment for the brand in
terms of trademark usage, packaging, and
communication
 Assembles the results of the tracking survey
and other relevant performance measures
 To be developed monthly, quarterly, or
annually
 Provides descriptive information as to what is
happening with the brand as well as diagnostic
information on why it is happening
 Organizational responsibilities and processes that
aim to maximize long-term brand equity
 Establish position of VP or Director of Equity
Management to oversee implementation of Brand
Equity Charter and Reports
 Ensure that, as much as possible, marketing of
the brand is done in a way that reflects the spirit
of the charter and the substance of the report
 IBMs move from attribute focused view to customer
defined benefit view, structural equation model.