Measuring Brand Equity Research Articles

Brand Logic: A Business Case for Communications

ABSTRACT The goal of corporate leadership at any publicly traded company is to protect and improve the equity of the company. With this goal in mind, communicators interested in elevating the role of communications and assessing return on investment must begin to speak the language of corporate leadership--increased efficiencies created and equity gained--with respect to their brand-building efforts. CoreBrand has tapped into its 14-year study and evolving understanding of brand ROI and developed a new measure of brand equity that assesses the exact amount of market capitalization attributable to the corporate brand. These measures change brand-building--and related communication activities such as advertising and public relations--from intuitively positive efforts to an absolute fundamental of business with measurable impact on stock price: replacing all intuition with fact.

Measuring Global Brand Equity Using Cross-National Survey Data

This article presents a newly developed survey-based method for the measurement of customer-based brand equity in a cross-national context. The proposed national brand equity (NBE) model decomposes customer-based brand equity into two components: measured and unmeasured brand equity. Whereas the measured component of brand equity identifies the effectiveness of individual benefit associations across the globe, the unmeasured component captures the value that is attached to the brand but not measured by the commonly elicited associations. The author applies the NBE model to 18 brands across 16 worldwide automobile markets, which provides opportunities for assessing the applicability of the proposed model. Furthermore, in response to the trend of increasing brand globalization, the author develops a model of global brand equity to assess a brand's value relative to that of its global competitors. Based on the NBE model, the global brand equity model incorporates national weighting factors in the aggregation of NBE across countries. The resultant aggregation yields a global brand equity index, which provides practical applications for benchmarking against the best brand and serves as a good indicator of a brand's relative value in the global market.

Dimensionalising on‐ and offline brands' composite equity

This paper approaches the subject of brand equity measurement on and offline. The existing body of research knowledge on brand equity measurement has derived from classical contexts; however, the majority of today's brands prosper simultaneously online and offline. Since branding on the Web needs to address the unique characteristics of computer‐mediated environments, it was posited that classical measures of brand equity were inadequate for this category of brands. Aaker's guidelines for building a brand equity measurement system were thus followed and his brand equity ten was employed as a point of departure. The main challenge was complementing traditional measures of brand equity with new measures pertinent to the Web. Following 16 semi‐structured interviews with experts, ten additional measures were identified.

Return on Measurement: Relating Marketing Metrics Practices to Strategic Performance

Despite great attention to developing and disseminating techniques for measuring marketing performance, the extent to which these techniques improve strategic performance is little known. The authors report the results of a survey of 139 large organizations regarding their ability to measure brand equity, financial returns, and marketing spending, along with more general practices. They show which practices are positively associated with five different measures of performance. The intensity of through regular review, detailed accounting for marketing spending, and use of performance dashboards have little impact on performance. The strongest returns on measurement appear to arise from reporting the financial results of marketing efforts in general and value of brand equity in particular.

Internet advertising: Is anybody watching?

Click-through rates are still the de facto measure of Internet advertising effectiveness. Unfortunately, click-through rates have plummeted. This decline prompts two critical questions: (1) Why do banner ads seem to be ineffective and (2) what can advertisers do to improve their effectiveness? To address these questions, we utilized an eye-tracking device to investigate online surfers’ attention to online advertising. Then we conducted a large-scale survey of Internet users’ recall, recognition, and awareness of banner advertising. Our research suggests that the reason why click-through rates are low is that surfers actually avoid looking at banner ads during their online activities. This implies that the larger part of a surfer's processing of banners will probably be done at the pre-attentive level. If such is the case, click-through rate is an ineffective measure of banner ad performance. Our research also shows that banner ads do have an impact on traditional memory-based measure of effectiveness. Thus, we claim that advertisers should rely more on traditional brand equity measures such as brand awareness and advertising recall. Using such measures, we show that repetition affects unaided advertising recall, brand recognition, and brand awareness and that a banner's message influences both aided advertising recall and brand recognition.

Revenue Premium as an Outcome Measure of Brand Equity

The authors propose that the revenue premium a brand generates compared with that of a private label product is a simple, objective, and managerially useful product-market measure of brand equity. The authors provide the conceptual basis for the measure, compute it for brands in several packaged goods categories, and test its validity. The empirical analysis shows that the measure is reliable and reflects real changes in brand health over time. It correlates well with other equity measures, and the measure's association with a brand's advertising and promotion activity, price sensitivity, and perceived category risk is consistent with theory.

Additive versus inclusive approaches to measuring brand equity: Practical and ethical implications

To date, there has been little consideration of the ethical dimensions of specific brand management practices. This paper examines different approaches to measuring brand equity and argues that the choice of measurement approach has ethical implications. It contrasts what have been previously defined as additive and inclusive approaches to brand equity definition and measurement. It then argues that inclusive approaches to brand equity measurement are preferable to additive ones because they enable us to work with a much broader concept of brand, and because additive approaches can predispose marketers towards unethical activity.

PepsiCo keeps the fizz in its brand equity

After entering the Indian market in 1989, PepsiCo finally looks set to break even. However, this is something of an achievement for any US organization considering the numerous brands that fail to penetrate the market of the world’s second most populous country. This success can only have been helped by PepsiCo’s innovative brand equity measurement model that was developed last decade.

Brands Matter: An Empirical Demonstration of the Creation of Shareholder Value Through Brands

Past research has shown a correlation between measures of brand equity and stock price. However, these results are not sufficient to conclude that branding creates shareholder value. Using time-honored models from the discipline of finance, this paper specifies, and subsequently tests, the necessary and sufficient conditions to determine whether brand strength leads to the creation of shareholder value. The results presented extend previous research by showing that strong brands not only deliver greater returns to stockholders versus a relevant market benchmark, they do so with less risk. A reframing of brand research within the framework of risk management is recommended, toward a goal of greater organizational interdependence and accountability for the marketing function as a whole.

Creating Brand Equity Through Strategic Investments

Brand equity is central to an understanding of the worth of any business, yet it exists in the minds of consumers as a mixture of awareness and image. To measure and understand how this equity is developed, mananged, and enhanced is central to all theories of value creation. This article looks at the concepts of brand identity, brand meaning, brand response, and brand relationship with an eye toward how the measure of brand equity correlates with and is influenced by technology equity, communication equity, and foreign strategic investments. Seventy-seven multinational firms are tracked through the years 1986-1988 and results are reported on based on R&D expenses, advertising costs, and investments in foreign subsidiaries.

Measuring Brand Equity: An Evaluation of a Consumer-Based Brand Equity Scale

This research reports an independent assessment of a recently developed set of consumer-based brand equity measures. Yoo and Donthu (1997) developed a multidimensional, consumer-based brand equity scale comprised of four theoretically defined constructs and a separate multiple-item overall brand equity measure. The present research employed slightly modified items in a different context in an attempt to examine the robustness of the proposed scale. Subjects (n=272) responded to the brand equity scale for different brands and combinations of brands in a co-branding context. The results suggest that, while the Yoo and Donthu scale represents an adequate first step, further scale development is needed. Nevertheless, this scale development has brought us closer to a universally accepted measure of consumer-based brand equity.

Application of brand equity measures in service markets

Many practitioners and researchers believe that differences exist between service and product markets, which warrant different marketing practices. The branding literature, however, remains biased towards products. This is especially true in the realm of brand equity. Brand equity, however, like many of the branding concepts, has an equally important role in the service markets. For this reason, this study applied ten existing consumer based measures of brand equity to a financial services market (credit cards). The convergent and predictive validity of these measures was assessed, which in turn helped to determine whether these measures that have typically been applied in product markets can be used to capture brand equity in a service market. The results found that most measures were convergent and correlated highly with market share in the predicted direction, where market share was used as an indicator of brand equity. Brand recall and familiarity, however, were found to be the best estimators of brand equity in the credit card market.

Consumer preferences and brand equity measurement of Spanish national daily newspapers: a conjoint analysis approach.

Brand is a product attribute that, for many types of goods or services, makes a major contribution to consumer preferences. Conjoint analysis is a useful technique for the assessment of brand values for a given consumer or group of consumers. In this paper, an application of conjoint analysis to the estimation of brand values in the Spanish daily newspaper market is reported. Four newspaper attributes were considered: brand (i.e., newspaper name), price (0.60, 1.05, or 1.50 euros), Sunday supplement (yes/no), and daily pullout (yes/no). A total of 510 regular readers of the national press, stratified by age and sex, were asked to rank 16 profiles representing an orthogonal fraction of the possible attribute-level combinations. Brand was by far the most important attribute, whereas price had negligible effect. More generally, the results confirm the utility of conjoint analysis for assessing brand equity in the newspaper market and for estimating the relative importance of the various attributes to different subgroups of consumers.

Measurement and tracking of brand equity in the global marketplace ‐ The PepsiCo experience

The conceptualization and measurement of brand equity, including its sources and outcomes, are a challenging task, particularly in a global marketplace. This paper briefly describes how PepsiCo, Inc. conceptualizes and measures brand equity across brands, countries, and over time. Special attention is given to the EquitrakTM brand equity model developed by PepsiCo, Inc. and the global brand equity tracking methodology employed by the company in 14 countries. The paper concludes with managerial insights obtained from this effort.

Evaluation of brand equity measures: further empirical results

Presents further empirical results on the convergent and predictive ability of a selection of consumer based brand equity measures. An underlying assumption in this study was that choice was an indicator of brand equity. It is a replication and extension of work carried out by Agarwal and Rao in 1996. Their work is the only study that has attempted to consolidate existing research on consumer based brand equity. Overall, the results generally concurred with those of Agarwal and Rao. Most of the measures were found to be convergent, and to estimate choice. The results mean that managers should now have more confidence in selecting from a range of brand equity measures, many of which can be collected easily and at minimal cost. More empirical studies, however, need to be carried out in a range of different markets to assess the wider performance of these brand equity measures.

Measuring and managing brand loyalty

There has been much written about the role of brand loyalty as a primary measure of effective brands marketing and a partial measure of brand equity. To date, however, progress in providing a practical measure of the construct has been very limited. In this empirical study of grocery brands, such a measure was developed in which both brand commitment and brand support were found to be necessary and sufficient conditions for loyalty to exist. Based on this measure, four consumer purchasing styles were identified and characterized as 'loyals', 'habituals', 'variety seekers' and 'switchers'. The strategic implications of segmenting grocery markets on this basis is discussed in both the context of the marketing of brands and managing brand equity.

Building brands or bolstering egos? A comparative review of the impact and measurement of advertising on brand equity

Brand equity is now receiving significant attention, both as a result of changes to international accounting standards relating to intangible assets and as a result of the renewed focus on the impact of marketing communications on brand performance. This paper reports on an investigation of the perceptions of senior marketing and advertising agency personnel regarding (1) the importance of brand equity as a valuation and performance measurement tool and (2) whether financially based brand equity measures and marketing-oriented measures can be translated into a single composite measure of brand equity/value. The findings reported herein indicate that, although financially based brand equity valuations have been a low priority in the past, there is increasing interest in this area and in the evaluation of the long-term impact of promotional activity as part of a wider drive for marketing accountability.

Researching international “brand equity”: a case study

Looks at the implications of building brand equity in a marketing rather than balance sheet sense. Uses the case example of Chivas Regal to illustrate how the global brand of a multinational organisation can be developed and whether a “global” advertising campaign can be built. Examines the role of marketing research in this process. In order to determine how a brand’s equity can be developed, the core and local values of a global brand as seen by consumers need to be clearly identified. However, running a global advertising campaign is expensive for the organisation. Pre‐testing in international marketing research helps in reducing risks with the positive effects of obtaining feedback and informing those involved. The discussion in the paper covers the pre‐testing of a global advertising campaign, in particular the appropriateness of qualitative and quantitative pre‐testing methods and then the measures used for post‐campaign assessment. The discussion also includes the appropriateness of single measures of brand equity.

Measuring brand power: validating a model for optimizing brand equity

Rather than taking the more traditional approach of measuring brand equity for accounting or strategic reasons, the approach taken here is concerned with optimizing brand equity through parsimonious manipulation of the marketing mix. To this end a macro‐model is first developed; this model is then operationalized and tested (in terms of predicted versus actual brand share) in three Korean markets. The contribution of the paper lies in the development of a methodology through which management can efficiently build brand power in their markets. The statistical methods (factor analysis and preference regression) are commonly used in commercial research and the research requirements to build such a model are quite modest – the proposed model makes a theoretical contribution but can also be used as a practical managerial tool.

The trouble with brand valuation

Brand valuation is an important and rapidly growing tool for assessing marketing performance. Before considering some conceptual shortcomings, language needs to be carefully defined, notably ‘brand’ and ‘brand equity’. The lack of consistency in the literature has contributed to the confusion. The writers conclude that one or more valuations are useful components in a set of brand equity (the marketing asset) measures but they should be seen as a whole. Brand valuation methodologies are too flawed for brand valuation to be used on its own.