Brand Equity: Measuring & Linking to Business Outcomes. September 2007

Transcription

1 Brand Equity: Measuring & Linking to Business Outcomes September Burke Incorporated. All rights reserved.

2 Brand Equity: Measuring & Linking to Business Outcomes Marketing is the art of brand building. If you are not a brand, you are a commodity. And then price is everything. Source: Philip Kotler, Building Your Brand Inc. Magazine Seminar S.C. Johnson Distinguished Professor of International Marketing Kellogg School of Management Northwestern Univerisity 2

3 Typical Issues In Brand Equity Research Measure Track Extend Link Value 3

4 Topics for Discussion Setting the Stage Background & Definitions Brand Equity Framework Taking Action Measurement Management Putting It All Together Wrap Up 4

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6 Point of View on Defining Brand Equity Brand Equity is produced by the cumulative, historical effect of your marketing mix on your target markets. If the marketing mix has been effective at differentiating your brand from competitors, then buyers will assign more value to your brand. The more value assigned to your brand, the greater its ability to both acquire and retain customers. Improving acquisition and retention leads to higher brand value. 6

7 The Brand Equity Payoff Brand Equity Willingness to Pay More $$ Larger Share Of Wallet 7

8 The Brand Equity Payoff The NUMMI plant in California produced two nearly identical models called the Toyota Corolla and the Chevrolet Prizm. Toyota sold 230,000 Corollas compared to sales of 52,000 Prizms. Toyota s net price $650 higher! > Source: Philip Kotler, Building Your Brand Inc. Magazine Seminar S.C. Johnson Distinguished Professor of International Marketing Kellogg School of Management Northwestern University 8

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10 Brand Equity Framework Marketing Efforts Recognition Regard Differentiation Brand Equity Acquisition Retention Customer Value Brand Value 10

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12 Linking Brand Equity to Business Outcomes Marketing Efforts Recognition Differentiation Regard Brand Equity Retention Acquisition Customer Value Brand Value Business Outcome Brand Equity Score 12

13 Burke Brand Equity R&D Online Panel 24 Brands Business Week Annual Ranking of Most Valuable Brands Total Sample = 5,476 Random Assignment 2 Brands Total N Per Brand = 450 Users = 225 Aware Non-Users = 225 Areas of Exploration: Awareness Usage Emotional Connection Value Reputation Familiarity Loyalty Quality Performance Personality 13

14 Burke Brand Equity R&D 14

15 Measuring Brand Equity Unaided Aware Recognition Aided Aware Brand Equity Trust Pride Value Responsibility Regard Stability Loyalty 15

16 Linking Brand Equity To Business Outcomes - Market Share There Is A Strong Relationship Between Brand Equity and Market Share 80% 70% 60% Actual Market Share 50% 40% 30% 20% 10% Brand Equity Score Source: Burke R&D,

17 Linking Brand Equity To Business Outcomes - Brand Value Brands With Superior Brand Equity Are Worth More $$ $16.2 $ Average Brand Value (Billions of $$) Source: BusinessWeek 12 $ Top Third Middle Third Bottom Third Performance on Brand Equity Score Source: Burke R&D,

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19 Alternatives for Strategic Initiatives Strategic initiatives to improve Brand Equity can focus on three stages of the purchasing process: Focus for Improvement Improve Marketing Communications Recognition Strategy for Improvement Acquisition Retention Prioritize Drivers of Acquisition Prioritize Drivers of Retention Understanding a Brand s strengths and opportunities within each of these stages aids in the decision as to which stage should be the focus for improvement strategies. 19

20 Prioritizing Opportunities for Improvement Many approaches exist to measure the impact of performance measures on overall Brand Equity. The key to prioritize improvement initiatives is to understand what is the benefit of a performance improvement and what is the cost of a performance decrement. Attribute Impact Attributes Greater Reward Greater Penalty Equivalent Penalty & Reward 20

21 Prioritizing Opportunities for Improvement Critical Improvement Issues Maintenance Issues Secondary Issues Lower Priority Issues Lower Impact Higher Interpretation Better Worse Performance 21

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23 Linking Brand Equity to Customer Value Brand Equity Profile Category Buyers Recognition Aware Not Aware Retention NonCustomers CV=$500 Customer Value Driver Driver NonCustomers CV=$100 Driver Driver Acquisition Driver Driver NonCustomers CV=$0 Driver Driver Regard 23

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25 Key Discussion Points Brand Equity is determined by two guiding forces: Recognition Regard Regard is a multi-dimensional construct, comprised of Loyalty, Trust, Responsibility, Stability, Value and Pride. Strategies for Improvement center on a brand s opportunity to strengthen its market presence, its ability to acquire new customers and its ability to retain existing customers. 25

26 For More Information Joelle Schwartz Phone: For a copy of this presentation, or for materials on other topics, please visit our website at 26