BRAND EQUITY MODELS:-

Brand equity


AAKERS BRAND EQUITY MODEL:-

In the Brand Equity model, David A. Aaker identifies five brand equity components:
(1) Brand loyalty,
(2) Brand awareness,
(3) Perceived quality,
(4) Brand associations and
(5) Other proprietary assets.
Aaker defines 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.
These assets include brand loyalty, name awareness, perceived quality and
associations. This definition stresses brand-added value; however, his model does not
make a strict distinction between added value for the customer/ consumer and added
value for the brand owner/ company.
This model can be used to get to grips with a brands equity and gain insight into
the relation between the different brand equity components and (future)
performance of the brand. Apart from the five components, the model also reflects
indicators (and/or consequences) of the pursued branding policy. It goes without
saying that brand equity will rise as brand loyalty increases, brand name awareness
increases, perceived quality increases, brand associations become stronger (and more
positive), and the number of brand-related proprietary as- sets increase. The model
also provides insight into the criteria that indicate to what degree actual value is
created with both consumer and company due the pursued branding policy.

David Aakers Brand Equity Model defines the five following brand equity components:

1. Brand loyalty: 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)

2. Brand awareness: 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)
Signal of substance/ 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 consumers mind)

3. Perceived quality: the extent to which a brand is considered to provide good
quality products can be measured on the basis of the following five criteria:
a. The quality offered by the product/ brand is a reason to buy it
b. Level of differentiation/ position in relation to competing brands
c. Price (as the product becomes more complex to assess, and status is at
play, consumers tend to take price as a quality indicator)
d. 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.

4. Brand Associations:- Associations triggered by a brand can be assessed on the
basis of the following five indicators:-
- Extent to which a brand name is able to retrieve associations from the
customers mind.
- Extent to which the association contribute to the differentiation in relation to the
competition (these can be the abstract associations like the vitality of the
product, or association with concrete product benefits)
- Extent to which the brand association play a role in the buying process. (greater
this extent the higher is the brand equity)
- Extent to which the brand associations create positive attitude/feeling. (the
greater the extent the higher is the brand equity)
- Number of extensions of the product (the greater the number the greater is the
brand association)

5. Other Proprietary Assets:-
The proprietary assets include Patents, Intellectual Proprietary Rights and the
relations with the partners. These are the assets are the ones which give the
product a competitive edge. When the product is high on proprietary assets then
it has a higher competitive edge over the other products. A trademark will
protect brand equity from competitors who might want to confuse customers by
using a similar name, symbol or package. A patent can prevent direct
competition if strong and relevant to the purchase decision process. Finally, a
distribution channel can be indirectly controlled by a brand as customers expect
the brand to be available.


















Kapferers Model for Brand Identity:-

Key questions regarding this aspect are: what does the brand look like? What can a consumer
do with it in terms of functionality? And how can it be recognized? It is also important to
have a clear flagship product representing the brands overall qualities. Kapferer furthermore
states that no brand will be able to do without drawing attention to its material benefits. The
tricky part is to do so in a recognizable and differentiating fashion.
2. Personality: the brands character. By communicating with consumers in a certain way,
these can be given the feeling that all brand-related communication actually constitutes a
person with specific character traits speaking to them. This can be realized by using a specific
style of writing, using specific design features, and using specific colours schemes, for
example. Endorsements in the shape of persons recommending a brand can literally give flesh
to a brands character. Well-known examples are George Clooney for Nespresso and Jamie
Oliver for Sainsburys.
3. Culture: the system of values and basic principles on which a brand has to base its
behaviour (products and communication). Culture is the direct link between brand and
organisation. Many associations in this area are linked to the country of origin; Mercedes
Benz to German ones, and Sometimes, brands can also be fortified by the fact that they are
associated with the consumers home nation; the example of the (American) brand Mars
(candy bars), which makes many Dutch people feel it is in fact a wholly Dutch brand. Brand
managers should have the brand's culture resonate in as many customer contacts as possible.

4. Relationship: a brand can symbolise a certain relationship between people (like between a
mother and child) this aspect requires a brand manager to express the relationship his/her
In the so-called Brand Identity Prism, Jean-Nol Kapferer identifies six aspects
of brand identity: (1) physique, (2) personality, (3) culture, (4) relationship, (5)Reflection
and (6) self-image.

These six aspects are divided over two dimensions:
a. The constructed source vs. the constructed receiver: a well-presented brand has to be able
to be seen as a person (constructed source: physique and Personality) and also as the
stereotypical user (constructed receiver: reflection and self-image).

b. Externalisation vs. internalisation: a brand has social aspects that define its external
expression (externalisation: physique, relationship and reflection and aspects that are
incorporated into the brand itself (internalisation: personality, self-image and culture)

Kapferer states that these aspects can only come to life when the brand communicates with
the consumer. Strong brands are, according to Kapferer, capable of weaving all aspects into
an effective whole, as a way of coming to a concise, clear and appealing brand identity. We
will go into the six aspects in detail below.

Physique: This is the set of the brands physical features, which are evoked
in peoples minds when the brand name is mentioned. Kapferer states that this aspect has to
be considered the basis of the brand.
brand stands for. The relationship aspect is perhaps even more important for service brands
than for product brands, as a service is, by definition, a relationship.

5. Reflection (of the consumer): this aspect makes reference to the stereotypical user of the
brand, and is the source for identification (NB: this idea does not necessarily coincide with
the characteristics of the target group). When thinking in terms of reflection, you could in the
case of Coca-Cola describe the consumer base as 15-to-18-year-olds (with values such as fun,
sporty and friendship), while the actual target group of this brand is far broader. Kapferer
states that there is no need for brand managers to make a realistic reflection of the actual
target group in their (image) campaigns, but rather present a group/person that will appeal to
the members of the target group.

6. Self-image: The mirror the target group holds up to itself. When developing a brand
identity, brand managers should take this dimension into account. Insight into the underlying
intrinsic drivers of consumers can give a brand a real boost. If these insights are present,
advertising can draw on them. Another example is provided by the brand Lacoste. Research
has shown that Lacoste users see themselves as members of a sporty club; even if they do not
actively play any sports. Without this knowledge, Lacoste would never have been able to
create its current image on the basis of its brand identity.

The Brand Identity Prism enables brand managers to assess the strengths and weaknesses of
their brand using the six aspects of this prism.
Young & Rubican BAV Model:-



Four Building Blocks of BAV Model



Brand Has Great Value
Brands are generally considered a large part of the intangible assets of companies, yet the
economic consequences of brand management are often difficult to establish. A brand is the
most valuable asset a company can own. It can also be the most confounding because, while
products have a tangible, physical reality, brands are all about perceptual reality. Brands exist
in the minds and hearts of consumers.. Brand has 6 elements namely physical appearance,
brand personality, culture, relationship, customer reflection, consumer self-image.

Sources of Brand Identity:
Goods
Name
Personage (emblem)
Visual Symbols and Logotypes
Brand developer
Communication together with its content and form
Brand Asset valuator developed by Young & Rubicam:-
Brand Asset Valuator measures the value of a brand where it is created: in peoples hearts
and minds. It provides a diagnostic framework to help the companys build, leverage, and
maintain their brands. Brands - independent of their product category - develop in a very
specific progression of consumer perceptions. When building a brand, Differentiation comes
first. Then Relevance, Esteem and, ultimately, Knowledge. But the real action takes place in
the relationships between these measures. Managing the relationships between the measures
is the key to brand health. The relationships illustrate a brand's intrinsic value, its ability to
generate margin, and its ability to insulate against competitive substitution.

These measures are used in Brand Asset Valuator


rand potential.

Brands can be evaluated by these individual measures. But more important, the relationships
between these measures, or "pillars", show the true picture of a brand's health, its intrinsic
value, its muscular capacity to carry a premium price and its ability to fend off competitors.
Differentiation:-Differentiation measures the strength of the brand's meaning. Consumer
choice, brand essence and potential margin are all driven by Differentiation. It is the ability
for a brand to stand apart from its competitors. A brand should be as unique as possible.
Brand health is built and maintained by offering a set of differentiating promises to
consumers and delivering those promises to leverage value. The starting point for all brands
is differentiation. It defines the brand and distinguishes it from all others. Differentiation is
how brands are born. As a brand matures, Brand Asset Valuator finds that Differentiation
often declines. It doesn't have to happen. Even after reaching maturity, with good
management, a brand can perpetuate its Differentiation. A low level of Differentiation is a
clear warning that a brand is fading.
Relevance:- It measures the personal appropriateness of a brand to consumers and is strongly
tied to household penetration. Relevance alone is not the key to brand success. Rather,
Relevance together with Differentiation form .It is the actual and perceived importance of the
brand to a large consumer market segment. This gauges the personal appropriateness of a
brand to consumers and is strongly tied to household penetration ( the percentage of
households that purchase the brand). Differentiation is only the first step in building a brand.
The next step is Relevance. If a brand isn't relevant, or personally appropriate to consumers,
it isn't going to attract and keep them - certainly not in any great numbers. Brand Asset
Valuator shows that there is a distinct correlation between Relevance and market penetration.
Relevance drives franchise size
Esteem:-Esteem is the perceived quality and consumer perceptions about growing or
declining popularity of a brand. Does the brand keep its promises? The consumers response
to a marketers brand- building activity is driven by his perception of two factors; quality and
popularity, both of which vary by country and culture. Brand Asset Valuators third primary
measure (or pillar) is Esteem - the extent to which consumers like a brand and hold it in high
regard. In the progression of building a brand, it follows Differentiation and Relevance. It's
the consumer's response to a marketer's brand-building activity. Esteem is itself driven by
two factors: perceptions of quality and popularity, and the proportions of these factors differ
by country and culture. Brand Asset Valuator tracks the ways in which brands gain Esteem,
which helps us consider how to manage consumer perceptions. Through Brand Asset
Valuator, we can identify opportunities for leveraging a brand's Esteem.
Knowledge:-Knowledge is the extent of the consumers awareness of the brand and
understanding of its identity. The awareness levels about the brand and what it stands for
shows the intimacy that consumers share with the brand. True knowledge of the brand comes
through brand-building. If a brand has established its Relevant Differentiation and consumers
come to hold it in high Esteem, brand Knowledge is the outcome and represents the
successful culmination of building a brand. Knowledge means being aware of the brand and
understanding what the brand or service stands for. Knowledge is not a consequence of media
weight alone. Spending money against a weak idea will not buy Knowledge. It has to be
achieved.
BRAND STRENGTH = Relevance and Differentiation Brand Strength, an important
indicator of future performance and potential. Relevant Differentiation is the major challenge
for all brands and a leading indicator of brand health. The relationship between a brand's
Relevance and Differentiation represents brand strength, which is a strong indicator of future
performance. Relevant Differentiation - remaining both relevant and differentiated - is the
central challenge of every brand. It is critical for all brands and all over the world.

BRAND STATURE = Esteem and Knowledge as Brand Strength was found in the
relationship between Relevance and Differentiation, Brand Stature is discovered in the
combination of Esteem and Knowledge. Brand Stature indicates brand status and scope - the
consumers' response to a brand. As such, it reflects current brand performance and is a strong
strategic indicator. For example, Esteem rises before Knowledge for a growing brand. If
rankings show the opposite relationship, a problem may have been identified The
combination of Esteem and Knowledge form Brand Stature , a more traditional measure that
Brand Asset Valuator has determined to be a lagging indicator of brand health.
Brand Development cycle Strength and weakness As part of the diagnostic process for
managing brands, Y&R plots brands on a Power Grid " reflecting each brand's Strength and
Stature. The Power Grid sets the strategic process by identifying the strength or weakness of
a brand. On the vertical axis we plot the brand strength - its relevance and differentiation,
while on the horizontal axis, the brand stature -esteem and knowledge.

Quadrant I (Unfocused): Weak brands that could not leverage their strengths. Quadrant II
(Unrealised potential): Here the brand managers have not been able to realise the true
potential of the brand. The strategy should be to build the stature of the brand. Quadrant III
(Leadership): The challenge for the brand here would be to continue being a leader. Quadrant
IV (Eroding): The last quadrant spells Danger for the brand, an indicator of eroding
potential. These brands have failed to maintain their Relevant Differentiation (their core
strength). If unattended, their Stature will also begin to fall. Unless steps are taken to
stimulate the differentiation and relevance, these brands will lose Esteem and could
eventually fade from consumers' consciousness. The value of a brand depreciates if there is
no continuous value addition. This is critical for the brand to be a source of competitive
advantage. The task of a marketer is to go beyond measuring and leveraging the value of the
brand and add perceptible value continuously.
Conclusion: Developed brands that have been managed for consistent meaning, compared
with those that have inconsistent meaning, tend to have better financial performance: higher
margins, better return on assets, and stronger growth. Consumer satisfaction is driven by the
same perceived benefit structures that they have been leveraging for brand success. An
economy in which consumers desired any product made available has been replaced by an
economy in which consumers require the brand to be distinctive, even before they consider
its relevance. Today, brands must stand out when they start out. Understanding How Great
Brands Got to Be That Way is a story worth telling. Understanding How Brands WILL
BECOME GREAT - that's a story worth living. There is definitely proven link between brand
voltage and market share.


Brand Equity Model for Microsoft Nokia:-
Brand equity is the added value endowed on the products and services which may be
reflected in the way consumers feel, think act with respect to the brand. It is generally made
from various perceptions carried by the customers who will in turn depict their brand
knowledge and their trust towards the brand which in turn creates a trust towards the products
sold by the brand. The brand equity in turn gives the brand strength in the market.
BAV model developed by Young & Rubican is the best way to measure the brand equity as it
provides a wide scenario how is the brand doing and the how is the brand value in terms of
that brand associates to the consumer behaviour. Using the BAV model, the brand imagery is
detected and the brand placement can be determined
The model defines four pillars for measuring brand equity:-
Knowledge explains the brand familiarity/brand awareness which tells how much the
customer knows about the brand
Differentiation, Relevance and Esteem capture the brand associations i.e. how the customers
associate to the brand.
Knowledge:-For Nokia, the brand awareness and brand familiarity was very high initially as
it was catering to all segments of the population. When Nokia as a phone was released into
the market, it was the phone which almost the entire Indian population used for a long time
and it created a brand trust which lead to high customer retention and had the highest
customer life value for the brand. Even today when Nokia has become Microsoft Nokia and
is trading low on the market, still the first phone for a beginner to buy would be Nokia as they
created an image which says its the phone which offered the customers ease to use.
Differentiation:- As a part of differentiating factor, Nokia always portrayed their phones as
the affordable range of phones and also they introducing Windows OS in the hand sets in
2011 with the gaming consoles interconnected to it like the Xbox 360 which was an
innovation for the tech savvy and gamers which was a key differentiator for Nokia when
compared to the other Android based phones.
Relevance:- Relevance means the benefits which Nokia as a brand is providing to the
customers. Nokia is one such brand which provides high customer value, whenever Nokia
felt that the customers wanted something novel to be offered, they made their changes and
offered new values for the same price which maintained the long lastingness of the customer
towards the brand.
Esteem:- Esteem is the highest level which can a brand reach, and when seen Nokia after
providing 10 years of Symbian phones in the market and it being the only phone with
Symbian OS, had reached the maturity stage and then started to decline when the Android
market grew and then they had to something novel which lead them to take a path where they
actually got Microsoft Windows OS on a phone and when they saw it can give them a new
avenue by entering into an acquisition with Microsoft, they took an opportunity and then the
trust attached to the brand from the customers side grew as now two first movers and strong
companies were together.

Nokia after reaching to a decline stage, now again it in the growing stage of the product life
cycle with the acquisition with Microsoft. The brand stature and brand strength is a on a
growth stage which makes Nokia a powerful brand.







Nokia was in the second quadrant as they were in the declining
stage, they were declining and when the acquisition of Nokia
and Microsoft happened they created a high differentiated value
when compared to the competitors.