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    Chapter 10

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    Sohaib Mullick

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    © All Rights Reserved
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    Chapter 10

    Uploaded by

    Sohaib Mullick
    35 views15 pages

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    chapter-10

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    Copyright:

    © All Rights Reserved
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    Download as ppt, pdf, or txt
    35 views15 pages

    Chapter 10

    Uploaded by

    Sohaib Mullick

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 15

    CHAPTER:10

    MEASURING
    OUTCOMES OF BRAND
    EQUITY: CAPTURING
    MARKET
    PERFORMANCE

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Comparative Methods

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Brand-Based Comparative Approaches

     Competitive brands used as benchmarks by


    consumers
     Example: Category leader or some other brand that
    consumers feel is representative of the category, like
    their most preferred brand

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Marketing-Based Comparative Approaches

     Hold the brand fixed and examine consumer


    response based on changes in the marketing
    program

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Conjoint Analysis
     Survey-based multivariate technique that enables
    marketers to profile the consumer decision process
    with respect to products and brands
     Part worth: The value consumers attach to each
    attribute level, as statistically derived by the conjoint
    formula

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Holistic Methods

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Residual Approaches

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Valuation Approaches

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Simon and Sullivan’s Brand Equity
    Value
    1. The value of the intangibles are calculated by subtracting the replacement cost of the
    tangible assets from the market value (market capitalization plus the market value of
    debt and other securities) of the firm.
    2. 2. The value of the intangible assets are broken down into three components, namely
    brand equity, value of non brand factors that reduce the firm costs such as R&D and
    patents, and finally industry wide factors that permit super normal profits (eg
    regulations).
    3. 3. The brand equity component is further broken down into two components, namely a
    demand-enhancing component and a component that caters for diminished marketing
    spend due to the brand being established.
    4. The demand-enhancing component is calculated using increased market share. Market
    share is broken down into two components, one for the brand and the other for non-
    brand factors. The non-brand market share is the factor of company's share of patents
    and research and development (R&D) share. The market share attributable to the brand
    is a function of the order of entry and the relative advertising share.
    5. The reduced marketing costs are a factor of order of market entry and the brand's
    advertising expenditure relative to that of its competitors.
    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
    Interbrand Valuation Method

    Interbrand Brand Valuation Method is a brand valuation methodology consisting of 3


    steps:
    1.FINANCIAL ANALYSIS. At the first stage, the cash flow which is generated by all
    intangible assets is predicted. This is conducted through identifying the revenues from
    products or services that are generated with the brand after deducting applicable taxes,
    minus a charge for the capital employed to generate the brand's revenue and margins.
    2.CALCULATE THE ROLE OF BRAND. The earnings that are specifically attributable to
    the brand are identified.
    3.CALCULATE BRAND STRENGTH. The ability of the brand to create loyalty and,
    therefore, sustainable demand and profit into the future is calculated.

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    To Sum Up..
     Brand valuation and the “brands on the balance
    sheet” debate are controversial subjects
     Limitations of valuation approaches
     Require much judgmental data and thus contain much
    subjectivity
     Intangible assets are not always synonymous with brand
    equity
     Methods sometimes defy common sense
     Strength of the brand measures may be confounded
    with the strength of the company

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Figure 10.2 - Product Profiles for Conjoint
    Analysis Application

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Figure 10.2 - Product Profiles for Conjoint
    Analysis Application

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    Guidelines for Creating and Measuring ROI
    from Brand Marketing Activities

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.


    To Sum Up..
     Single measures of brand equity provide at best a
    one- or two-dimensional view of a brand
     No single number or measure fully captures brand
    equity
     There are many different sources of, and outcomes
    from, brand equity, depending on the marketers’
    skill and ingenuity

    Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

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