Measuring

Brand Equity
Nov. 10, 2008

BrandAmplitude, LLC
All Rights Reserved

Positioning recommendation
For __________________________
is the only_____________________
that_________________________
because ______________________.

Mantra
2

P&G Gain: $1 Billion Brand

Successful repositioning
of value brand to appeal
to Hispanic Households.
Create Brand Positioning

http://www.ilovegain.com/home.do

Brand Strategy Process

Brand Audit
Target & Insight

Competitive
Assessment

Brand
Inventory

Points of Parity and Difference

Equity
Pyramid

Positioning

Personality

Objectives & Metrics

Brand Execution
Brand
Elements

Communications
Strategy

CRM &
Community
Building

Brand Experience Map

Why
WhyMeasure
MeasureBrand
BrandHealth??
Equity?
Understand drivers of
brand value in order to
support strategic decision
making.
If you dont know where you are, its
hard to decide how to get there.

To evaluate efficacy of
building
Ifbrand
you dontvalue
know where
youre going,
programs
--get
ROMI.
any road will
you there.

Why Measure Brand Health?

The health of your brand is a prime indicator of

the health of your companyThe most effective
way to monitor your brand is to combine
consistent real-world research with the use of
quantitative models to measure, and even
predict, change in key variables.
Jim Gregory, The Best of Branding, 2004, p 57

What Are the Key Measures?

The Usual Approaches

Most commonly used metrics:
Changes in brand awareness

81%

Changes in market share

79%

Changes in consumer attitude toward the brand

73%

Changes in purchase intent

59%

Return on objective

36%

Lifetime customer value

23%

Changes in the financial value of brand equity

20%

Source: ANA, State of ROMI Measurement, 2007

Whats Wrong With These Metrics?

Measuring Brand Equity

Need to begin with a clear definition of the
construct we want to measure.
There is no consistent definition of ROI," noted
one respondent. Marketing organizations are
instead using "surrogate" metrics, ranging from
input-related metrics such as awareness and
brand image in financial services to market share
and growth in consumer packaged goods
companies.
Source: ANA/Booz Allen online survey of over 370 marketing and non-marketing managers of mostly publicly
traded companies. October, 2004. About 80% of the respondents were senior or middle managers representing
14 industries, with over 90% of the respondents distributed evenly between Consumer Packaged Goods, Financial
Services, Retail, Technology, Telecommunications, Manufacturing, Health, Auto and Professional Services
industries.

Measuring Brand Equity

Definitions of Marketing ROI

Source: The Capre Group,

Brand Loyalty Underlies

Brand Equity Defined
Brand Equity
Loyal Behavior

Psychological Preference

The mechanism that underlies (equity) is agreed to be a latent

value in the mind of customers that is exhibited through its
impact on behavior. Positive equity results in behavior that
benefits the brand through purchase frequency, brand loyalty,
price insensitivity, willingness to recommend and more.
-Dr. Tom Reynolds & Carol Phillips, In Search of True Brand Equity Metrics: All Market Share Aint Created
Equal, paper in review, Journal of Advertising Research

Perceptions Impact Behavior

$5

$50

$500

$5,000

Now which box would you choose?

Perceptions Impact Behavior

$1.89

$2.49

Which jar would you choose?

$2.29

Brand Equity Defined

Brand equity can be measured by determining loyal

users contribution to category profits (ideally) and to
brand sales (realistically).

Premium
Brand?

Price
Brand?

Every brand could benefit from having the core group represent a
larger share of its total franchise.
Dr. Tom Reynolds

Now, what Are the Key Measures?

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What The Experts Say

Aaker

Associations
Awareness

Keller

Y&R

Differentiatio
n

x
x
x

Esteem

International

Knowledge
Leadership
Legal
Protectn

Interbrand

Brand Trend

Dist.
Coverage

EquiTrend

Aaker

Keller

EquiTrend

Interbrand

Market Trend

Mktng Support

Org.
Associations
Perceived
Quality

Perceived
Value

Personality

Price Premium

xx
x
x

Salience
User
Sat./Loyalty

xx

Relevance

xx

Y&R

xx

Market
Share D. Aaker, x
Stability
Sources:
Building Strong Brands, 1996; K.
Keller, Strategic Brand Management, 2003 x

The Right Approach

Activity &
Program Metrics

Customer Perceptions
& Behavior

Market
Performance

ROMI
Financial Value

You cant put attitudes in the bank!

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The Right Approach

Multiple measures at different levels of the value
chain, benchmarked and tracked consistently
over time:
Activity &
Program Metrics
Marketing Investment
Program Quality
Clarity
Relevance
Distinctiveness
Consistency
Channel expansion

Customer Perceptions
& Behavior

Market
Performance

Brand awareness
Brand familiarity/associations
Brand evaluations/attitudes
Customer acquisition/
conversion
Customer retention
Attachment/Loyalty

Sales
Market share
Price premium
Profitability
Price elasticity
Expansion success

The Right Approach

Linking customer perceptions and market
performance to impact on financial value to
assess ROMI.
Activity &
Program Metrics

Customer Perceptions
& Behavior

Market
Performance

ROMI
Financial Value
Stock price
P/E ratio
Market capitalization
Brand contribution (i.e.,
CoreBrand index)
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The Right Approach

Customer Based Brand Metrics
Based on CBBE model
Traditional marketing and communications tracking
Examples: Millward Brown BrandDynamics, Y&R Brand Asset
Valuator

Incremental Brand Performance

Short term incremental sales volume, premium pricing, other
outcomes
Historical modeling and predictive modeling

Branded Business Value

Financial value of intangible assets
Measure increases or decreases in brand asset value over
time
Measuring Brand Value, Don E. Schultz & Heidi F. Schultz, Kellogg on Branding, 2005

21

Equity Measure
Examples
Examples
Soft Drink
Which brand of soft-drink do I consume most often?
Which is my first preference of soft drink brands
Top two boxes purchase intent or which brand do I expect to
consume on my next consumption occasion?
Wireless
Brand owned/used
Intention to Switch in next 3, 6, 12 months?
What brands would I consider purchasing?
Packaged Food
Price and Quality perceptions
Number of purchases of last 10 allocated to each brand
Future intent to buy

Brand
Valuation
and
Measurement Firms
Measurement Firms

Financial
Value

Strategic
Value

Are Brand Equity and Brand Valuation the Same?

Brand Equity vs. Value

(For most companies) the operative question is less what
their brand is worth than what their brand could do for them
in terms of revenue and profit. gaining an understanding
of the causal activities related to the changes would make
brand equity measures more actionable.
--Dr. Tom Reynolds & Carol Phillips, In Search of True Brand Equity Metrics: All Market Share Aint
Created Equal, paper in review, Journal of Advertising Research

See also: The Best Global Brands, Businessweek, August 4, 2004; Microsoft, GE top brand equity
study, BtoB, 1.19.04. and Dont Waste Time with Brand Valuation, MarketingNPV.com, October
2004.

New
Measure
Ideas
New Equity
Ideas in
Measurement
Net Promoter Score
Fred Reichfeld, The Loyalty Effect
Customer Equity
Roland Rust
Sum of the lifetime values of current and future customers
Customer Income Flows
Don Schultz
Royalty Rate
Share Tiering

Share Tiering
Objective:
Relate changes in consumer behavior and
perceptions to changes in financial
performance.

Consumer Measures:
1)Relative barrier of price
2)Brand Quality perceptions
3)Brand purchase loyalty
4)Self-report future brand purchase trend

In Search of True Brand Equity Metrics: All Market Share Aint Created Equal,
Journal of Advertising Research, June 2005, Tom Reynolds and Carol Phillips
26

Other
Brands

Share Tiering Measures

Measuring Brand Value

Companies Clueless On Brand Value, Evaluations Needed
by Karlene Lukovitz,Tuesday, Oct 28, 20083:15 PM ET

Now that The Brand Bubble has spelled out that most brands--and
their companies--are greatly overvalued by the financial markets,
we find out that those on the inside do not have a clear idea of
what their brands are worth, either.
More than half (55%) of senior marketing executives lack a
quantitative understanding of brand value within their
organizations, according to a recent survey by the Association of
National Advertisers and global branding consultancy Interbrand.
Further, because brand value's effect on corporate value is not
clearly quantified, it isn't being incorporated in decision-making:
64% of the 118 marketing officers and senior marketing executives
polled said that brands do not influence decisions made at their
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organizations.

Measuring Brand Value

Among those who said brands don't influence corporate decisions,
the underlying causes cited include:
Incentives that don't support brand importance (51%);
Inability to prove the brand's financial benefit (49%);
Existing branding expertise is not widely accepted (40%);
Metrics do not support the brand's importance (39%);
Budgets are focused on communications activities (32%);
Brand is not included in the "sphere of influence" (28%);
Branding expertise does not yet exist (15%).
Companies Clueless On Brand Value, Evaluations Needed
by Karlene Lukovitz,Tuesday, Oct 28, 20083:15 PM ET

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What Are the Key Measures?

31

Key Takeaways
There Is No Silver Bullet
Each firm requires unique measures
MSI Report Tim Ambler

Use a mix of measures

Include perceptual (knowledge), financial impact and behavioral
(loyalty) measures
Tie measures to strategy what behaviors and attitudes drive brand
value for customers and investors?

Consistency is Key
Movies work better than snapshots
Build knowledge over time

Prioritize
More likely to suffer from too much data than from too little

Recommended Resources
Brand Vitals: Essential Principles for Monitoring Brand Health, Carol Phillips and Judy
Hopelain, 2008 http://www.brandamplitude.com/whitepapers/Brand%20Vitals%20vF.pdf
In Search of True Brand Equity Metrics: All Market Share Aint Created Equal, Tom
Reynolds and Carol Phillips, Journal of Advertising Research, 2005
http://www.brandamplitude.com/whitepapers/all_market_share_aint_created_equal.pdf
On Track: The Next Generation of Brand Tracking, Judy Hopelain, AMAs Marketing
Management, October, 2005
http://www.brandamplitude.com/whitepapers/on_track.pdf
Measuring Brand Value, Don E. Schultz and Heidi F. Schultz, Kellogg on Branding, 2005,
Ch 13
Make a Case for Your Brand, Susan Fournier, Advertising Age, November 26, 2007
Brand Metrics: good, bad and dont bother, Scott Davis, Strategy, January, 26, 2004

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