 CBBE model provides guidance as to how

brand equity can be measured.

 Customer-based brand equity is the

differential effect that knowledge about
brand has on a customer response to the
marketing activities or programs of the
brand.
 Two basic approaches to measure brand
equity:
◦ Indirect approach: Assess potential sources of
customer-based brand equity by identifying and
tracking customers’ brand knowledge structures.

◦ Direct Approach: By assessing the actual impact of

brand knowledge on consumer response to different
elements of marketing program.

 How to think about brand equity measurement

& management?
 A brand equity measurement system is 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.

 Crucial for developing of such a system, one has to

understand how brand equity or value gets created.

 The brand value chain is a means to trace the value

creation process to better understand the financial
impact of marketing expenditures & investments.
 The brand value chain is a structured approach
to assessing the sources and outcomes of
brand equity and the manner by which
marketing activities create brand value.

 It has some basic premises. It assumes that:

◦ The brand value creation process begins when the
firm invests in a marketing program targeting actual
or potential customers.

◦ The marketing activities associated with the program

then affects the customer mindset.
 ◦ The mindset then results in certain outcomes for the
brand in terms of how it performs in the marketplace.

◦ Finally, investment community considers this market

performance to arrive at an assessment of shareholder
value in general & a value of the brand in particular.

 The model also assumes that a number of linking

factors intervene between these stages.

 These factors determine the extent to which

value created at one stage transfers or multiplies
to the next stage.
 Marketing
VALUE Customer Market Shareholder
STAGES Program
Mindset Performance Value
Investment

- Product - Awareness - Price premiums - Stock price

- Communications - Associations - Price elasticities - P/E ratio
- Trade - Attitudes - Market share - Market capitalization
- Other - Attachment - Expansion success
- Activity - Cost savings
- Profitability
 Brand Value Chain

Marketing Customer Market Shareholder

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

Program Marketplace Investor

MULTIPLIER Quality Conditions Sentiment

- Clarity - Channel support - Market dynamics

- Relevance - Consumer size & profile - Growth potential
- Distinctiveness - Competitive reactions - Risk profile
- Consistency - Brand contribution
 Implementing this system involves:
◦ Conducting brand audits.
 Brand Inventory
 Brand Exploratory
◦ Developing tracking procedures.
◦ Designing a brand equity management system
 Brand Equity Charters
 Brand Equity Reports
 Brand Equity Overseers
 A brand audit is a comprehensive examination
of a brand involving activities to assess the health
of the brand, uncover its sources of equity and
suggest ways to improve and leverage that
equity.
 A brand audit requires understanding sources of
brand equity from the perspective of both the
firm and the consumer.
 Specifically, the brand audit consists of two
activities:
◦ Brand Inventory
◦ Brand Exploratory
 The purpose of the brand inventory is to
provide a complete, up-to-date profile of how all
the products and services sold by a company are
marketed and branded.

 For each product, the relevant brand elements

must be identified, as well as the supporting
marketing program. This information should be
summarized both visually and verbally.

 Although primarily a descriptive exercise, some

useful analysis can be conducted.
 The brand exploratory is research activity designed to
identify potential sources of brand equity.

 The brand exploratory provides detailed information as to

what consumers think of and feel about the brand.
 Although reviewing past studies and interviewing relevant
personnel provides some insights, additional research is
often required.
 To allow a broad range of issues to be covered and also
permit those issues to be pursued in-depth, qualitative
research techniques are often employed first.
 To provide a more specific assessment of the sources of
brand equity, a follow-up quantitative phase is often
necessary.
 Tracking studies involve information collected
from consumers on a routine basis over time
◦ Often done on a “continuous” basis
◦ Provide descriptive and diagnostic information
◦ Key decisions
 What to track – all sources based on CBBE Model
 Who to track – current customers/loyal/ loyal to other
brands/ nonusers/light or heavy user etc.
 When and where to track - frequency
 How to interpret tracking studies – level of cut-off:
awareness, how positive is the feelings, actual sources of
equity etc.
1. Formalize company position and philosophy into a Brand
Equity Charter to provide relevant guidelines to
marketing managers.
- Importance of brands and brand equity
- History of brand
- Brand positioning
- Core brand values
- Core brand promise (“brand mantra”)
- POP/POD
- Brand guidelines
- Strategic
- Tactical
2.Assemble results of tracking survey and other
relevant outcome measures into a Brand Equity
Report distributed to managers on regular basis

◦ Provides descriptive information as to

what is happening with a brand as well as
diagnostic information as to why it is
happening.
3. Brand Equity Responsibilities: 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 way that reflects the spirit of the
Charter and the substance of the Report
FAR BETTER AN APPROXIMATE ANSWER TO
THE RIGHT QUESTION, WHICH IS OFTEN
VAGUE, THAN AN EXACT ANSWER TO THE
WRONG QUESTION, WHICH CAN ALWAYS BE
MADE PRECISE.

- JOHN TUKEY, STATISTICIAN

 Brand equity
measurement
system

Brand equity Brand equity

sources outcomes
 Brand equity
measurement
system

Research
Procedure

Qualitative Quantitative
Methods Methods

Brand equity Brand equity

sources outcomes
 Sources…
◦ Brand awareness
◦ Brand attitudes
◦ Brand image
◦ Brand attachments
◦ Etc.
 Outcomes
◦ Price elasticity
◦ Brand choice
◦ Preference
◦ Sales
◦ Share value etc.
 Free association
◦ What comes in the mind when they think of the brand.
 Projective Techniques
◦ Uncover the opinions and feelings of consumers
(a) Completion and interpretation task
 Incomplete or ambigious stimuli to elicit consumer
thoughts and feelings – pictures, cartoons, stories,
converstaions etc.
(b)Comparison Tasks
Compare brands to people, countries, animals,
activities, fabrics, occupations, cars, magazines,
vegetables etc.
 Zaltman metaphor Elicitation Technique (ZMET)
◦ Consumers have subconscious motives
 Word construct – abstraction to capture common ideas,
concepts or themes
 Ex. “Ease of use” – might capture “simple to operate”,
“without hassle”, “automatic” etc.
 Brand Personalities
◦ Human characteristics or traits
◦ Big Five:
 Sincerity (down to earth…)
 Excitement (daring, spirited…)
 Competence (reliable,…)
 Sophisticated (upperclass, charming…)
 Ruggedness (outdoorsy and tough)
 Experiment Methods
◦ Watch the consumers behaviours at their home, work
place etc.
 Brand awareness
◦ Recognition
◦ Recall
 Brand image
◦ Beliefs
 Strength
 Favorability
 Uniqueness
◦ Multidimensional scaling (MDS)
 Assessing the resulting value in some way
 Measurement procedures to assess the
effects of brand knowledge structures
 Measures that capture market peformance of
the brand
 Outcomes
measurement

Comparative Holistic
methods methods
 Comparative methods
◦ Brand-based comparative
 Marketing pgm fixed & different brands
◦ Marketing based comparative
 Measures consumer response by fixing Brand and
changing the marketing pgm
◦ Conjoint analysis
 Holistic methods – overall value
◦ Residual approaches – based on physical attributes
only
◦ Valuation approaches
 Historical perspectives
 General approaches
 Cost approach – amt of money required to replace the brand
 Market approach-PV of future economic benefits
 Income approach-discounted future cash flow from future
earnings
 Find out any real national or international brand
measurement done by any agency for any
product/services category
 Study the method of brand equity measurement
in terms of
◦ qualitative or quantitative techniques/methods used
different factors/parameters and its weightages, scales
used, questionnaire used etc.
◦ Advantage or criticism of the methods
 Cost Based Brand Valuation

 Market-Based Brand Valuation

 Income Approach Brand Valuation

“There is not a closed formula, it is more a

process”