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Brand Equity Metrics

Bibliography

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.

Construction

(Brand Equity Ten)

(Aaker)

There are ten attributes of a brand that can be used to asess its strength.

Brand Asset Valuator (Young & Rubicam)

  • Market Share
  • Market Price
  • Distribution Coverage

It is a tool to diagnose the power and value of a brand.

  • Differentiation
  • Satisfaction or Loyalty
  • Perceived Quality
  • Leadership or Popularity
  • Perceived Value
  • Brand Personality
  • Organizational Associations
  • Brand Awareness

Durability

Brand Equity Metrics

In using it, the agency surveys consumers' perspectives along four dimensions:

Exercise

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

Is a measure of costumer retention or loyalty. It represents the percentage of a brand's customers who will continue to buy goods under that brand in the following year.

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)

Answer

Strategically crucial process. Many experts consider the following techniques to gain insight in this area:

  • Brand Equity Ten (Aaker)
  • Brand Asset Valuator (Y&R)
  • Brand Equity Index (Moran)
  • Brand Valuation Model (Interbrand)
  • Brand Identity
  • Brand Position
  • Brand Image
  • Brand Differentiation

Purpose: To measure the value of a brand

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.

-

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

Brand Equity Index(Moran)

Brand Strategy agency, draws upon financial results and projections in its own model for brand evaluation.

Marketing executive Bill Moran has derived an index of brand equity as the product of three factors:

  • Effective Market Share
  • Relative Price
  • Durability

Brand Equity Index (I)= Effective Market Share(%) Relative Price (I) * Durability (%)

http://interbrand.com

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