Brand Equity

GROUP 2

MANIKANDAN N P (0911032)
SENTHIL KUMAR (0911050)
EMMANUEL JOSEPH (0911233)
GEDAM SANTOSH VISHWANATH (0911237)
KETAN RAY (0911243)
 INTRODUCTION

“Assets or Liabilities linked

to a brand that add or
subtract from the value of
a product or service to a
company and/or its
customers”
 RESEARCH QUESTIONS TO DETERMINE BRAND EQUITY

Brand Loyalty Awareness

 What are brand loyalty levels by  How valuable is brand awareness in

segment? this market?

 Are customers satisfied?

 What is the company’s brand awareness
level as compared to competitors?
 What do Exit interviews suggest?

 Is the brand being considered?

 What is causing dissatisfaction?

 What are the problems in buying or  Is brand awareness a problem?

using the brand?
 What can be done to improve brand
 What are the market share and sales
awareness?
trends?
RESEARCH QUESTIONS TO DETERMINE BRAND EQUITY
 BRAND EQUITY

Brand Provides value to customer

Loyalty by enhancing:

1.Interpretation of information
2.Confidence in purchase
Name
decision
Awareness 3.Use satisfaction

Perceived BRAND
Quality EQUITY Provides value to firm by
Name enhancing:
Symbol
1.Efficiency and effectiveness of
Brand
marketing
Associations 2.Brand loyalty
3.Price margins
4.Brand extensions
Other Brand 5.Trade leverage
6.Competitive advantage
Assets
 MEASURING BRAND EQUITY

 Excess-Price Approach

 Observation

 Customer Research

 Trade-off Analysis

 Impact on Customer Evaluation

 Replacement-Cost Approach

 Stock-Price Approach

 Future-Earnings Approach
 EXCESS-PRICE APPROACH

 Measured through the brand’s potential to charge a premium

 Contributors:
 Brand Awareness
 Perceived quality
 Associations
 Loyalty
 OBSERVATION

 Measuring the excess price a brand can support by observing

market prices

 The correlation between difference in prices amongst brands

 Checking the responsiveness of a brand to its own price changes

as well as competitors’ price changes

 Recent use of scanner technology and syndicated products to

observe prices at regular intervals
 CUSTOMER RESEARCH

 Interviews with customers to determine product features

that are considered valuable
 E.g. Dollar-metric scale

 Blind tests to measure the value placed on the same

product with and without the brand name associated

 Buyer-preference and purchase-likelihood measures for

different price levels
 TRADE-OFF ANALYSIS

 Interviews in which respondents make trade-off judgments

on brand attributes

 Monetary value of each brand attribute obtained as the

output of the analysis

 Per unit price differential multiplied by sales volume gives

brand value
 IMPACT ON CUSTOMER EVALUATION

 Determining the expected loss in sales if brand name is

discarded

 Measured by projecting losses in case advertising support

for the brand is discontinued

 Profits on the lost marginal sales represent brand value

 REPLACEMENT-COST & STOCK-PRICE APPROACH

 REPLACEMENT-COST
 Cost of establishing a new product that can fetch similar
revenues

 STOCK-PRICE
 Stock prices adjust to reflect the future prospects and
revenues from brands
 Market value of firm less replacement costs of tangible
assets, value of R&D, regulation and concentration
 FUTURE-EARNINGS APPROACH

Discounting present value of future earnings

attributable to Brand-Equity assets

 Discounting future profit stream

 Applying an earnings multiplier

 Evaluation of brand extensions

 FUTURE-EARNINGS APPROACH

BRAND VALUE MEASUREMENT

Net Present
Value

Brand Earnings

Brand Strength Score

• Market
• Leadership
• Trend
Brand Revenue Economic Earnings • Diversity
• Support
Economic Earnings Brand Earnings • Stability
• Protection
Thank You
Appendix
 BEST GLOBAL BRANDS IN 2009

Rank Brand Country of Sector Brand value

origin ($mn)

1 United States Beverages 68,734

2 United States Computer 60,211

Services

3 United States Computer 56,647

Software

4 United States Diversified 47,777

5 Finland Consumer 34,864

Electronics
 BEST GLOBAL BRANDS IN 2009

Rank Brand Country of Sector Brand value

origin ($mn)

6 United States Restaurants 32,275

7 United States Internet 31,980

Services

8 Japan Automotive 31,330

9 United States Computer 30,636

Hardware

10 United States Media 28,447

Source: Interbrand Global Brands Assessment for 2009