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Young & Rubicam maintains that these criteria reveal important factors behind brand strength and market dynamics.
Relative Price
Simon, Julian, "Product Differentiation": A Meaningless Term and an Impossible Concept, Ethics, Vol 79, No.2( Jan.,1969, pp. 131-138. Published by the University of Chicago Press
Is a ratio, it represents the price of goods sold under a given brand, divided by the average price of comparable goods in the market.
There are ten attributes of a brand that can be used to asess its strength.
Brand Asset Valuator (Young & Rubicam)
It is a tool to diagnose the power and value of a brand.
Durability
In using it, the agency surveys consumers' perspectives along four dimensions:
ILLI is a tonic drink that focuses on two geographic markets- eastern and western U.S. metropolitan areas. In the western market, which accounts for 60% of ILLI's sales, the drink has a 30% share of the market. In the East, where ILLI makes the remaining 40% of its sales, it has a 50% share of the market. The average price for tonic drinks is $2.00, but ILLI enjoys a premium. It generally sells the tonic drinks for$2.50. Half of the people who purchase ILLI this year are expected to repeat next year.
Calculate the brand equity index of Moran
Uniqueness: Does this product offer something new to me?
Relevance: Is this product relevant for me?
Attractiveness: Do I want this product?
Credibility: Do I believe in the product?
Related Metrics and Concepts
Brand Valuation Model (Interbrand)
Strategically crucial process. Many experts consider the following techniques to gain insight in this area:
West= 30%* 60%= 0.18
East= 50%*40%= 0.20
Effective Market Share= 0.38
A brand strategy agency, draws upon financial results and projections in its own model for brand evaluation.
The agency estimates brand value on this basis and tabulates a yearly list of the 100 most valuable global brands.
Effective Market Share
Generating a Durability of 0.5
Is a weighted average. It represents the sum of a brand's market shares in all segments in which it competes, weighted by each segment's proportion of that brand's total sales.
- Consumer's perspective
The value of a brand might be the amount the costumer would be willing to pay for merchandise that carries the brand's name, over and above the price.
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Yielding a Relative Price of $2.50 / $2.00, or 1.25.
Interbrand
Brand Equity= Effective Market Share* Relative Price*Durability= 0.38*1.25*0.5= 0.2375
Marketing executive Bill Moran has derived an index of brand equity as the product of three factors:
http://interbrand.com