Brand equity

Brand equity can be defined in many different ways. I have developed a simple, yet powerful, definition of brand equity. For a brand to be strong it must accomplish two things over time: retain current customers and attract new ones. To the extent a brand does these things well, it grows stronger versus competition, and delivers more profits to its owners.
Breaking down the definition of "brand equity" into its two components, we can more easily determine a reliable way to measure brand equity, and to track changes in brand equity over time. The components of brand equity, retention and attraction of customers, stem from people's experiences with and perceptions of a brand.

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1. The ability to retain customers is largely experiential. High equity brands exhibit stronger levels of customer satisfaction and loyalty. History has shown that consumers will continue to buy a brand that offers them "their money's worth."
2. The ability to attract new customers is largely perceptual. Because customers do not have actual brand experience, they must go by what they hear, see and believe about a brand. The two primary ways the market receives this information is through messages controlled by marketing, such as advertising and PR efforts, as well as uncontrolled messages such as press stories and "word of mouth."
Family branding is a marketing strategy that involves selling several related products under one brand name. Family branding is also known as umbrella branding. It contrasts with individual product branding, in which each product in a portfolio is given a unique brand name and identity.
Family branding imposes on the brand owner a greater burden to maintain consistent quality. If the quality of one product in the brand family is compromised, it could impact on the reputation of all the others. For this reason family branding is generally limited to product lines that consist of products of similar quality.
Individual branding, also called individual product branding or multibranding, is the marketing strategy of giving each product in a portfolio its own unique brand name. This contrasts with family branding, corporate branding, and umbrella branding in which the products in a product line are given a single overarching brand name. The advantage of individual branding is that each product has an image and identity that is unique. This facilitates the positioning of each product, by allowing a firm to position its brands differently.
Examples of individual product branding include Procter & Gamble, which markets multiple brands such as Pampers, and Unilever, which markets individual brands such as Dove.
Q6.
Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name And, at the root of these marketing effects is consumers' knowledge. In other words, consumers' knowledge about a brand makes manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are one of the most valuable assets that a company has. Brand equity is one of the factors which can increase the financial value of a brand to the brand owner, although not the only one.
Some measurements approaches are at the firm level, some at the product level, and still others are at the consumer level.
Firm Level: Firm level approaches measure the brand as a financial asset. In short, a calculation is made regarding how much the brand is worth as an intangible asset. For example, if you were to take the value of the firm, as derived by its market capitalization - and then subtract tangible assets and "measurable" intangible assets- the residual would be the brand equity. One high profile firm level approach is by the consulting firm Interbrand. To do its calculation, Interbrand estimates brand value on the basis of projected profits discounted to a present value. The discount rate is a subjective rate determined by Interbrand and Wall Street equity specialists and reflects the risk profile, market leadership, stability and global reach of the brand.
Product Level: The classic product level brand measurement example is to compare the price of a no-name or private label product to an "equivalent" branded product. The difference in price, assuming all things equal, is due to the brand. More recently a revenue premium approach has been advocated.
Consumer Level: This approach seeks to map the mind of the consumer to find out what associations with the brand that the consumer has. This approach seeks to measure the awareness (recall and recognition) and brand image (the overall associations that the brand has). Free association tests and projective techniques are commonly used to uncover the tangible and intangible attributes, attitudes, and intentions about a brand. Brands with high levels of awareness and strong, favorable and unique associations are high equity brands.
All of these calculations are, at best, approximations. A more complete understanding of the brand can occur if multiple measures are used.
Measuring Sources of Brand Equity
Qualitative Research Techniques
There are many different ways to uncover and characterize the types of associations linked to the brand. Qualitative research techniques are often employed to identify possible brand associations and sources of brand equity. Qualitative research techniques are relatively unstructured measurement approaches whereby a range of possible consumer responses are permitted. Because of the freedom afforded both researchers in their probes and consumers in their responses, qualitative research can often be a useful "first step" in exploring consumer brand and product perceptions. Consider the following three qualitative research techniques that can be employed to identify sources of brand equity.
Free Association
The simplest and often most powerful way to profile brand associations involves free
association tasks whereby subjects are asked what comes to mind when they think of the brand
without any more specific probe or cue than perhaps the associated product category (e.g., "What
does the Rolex name mean to you?" or "Tell me what comes to mind when you think of Rolex
watches."). To better understand the positivity of brand associations, consumers can be asked followup questions as to the favorability of associations they listed or, more generally, what they like best about the brand. Similarly, consumers can also be asked direct follow-up questions as to the uniqueness of associations they listed or, more generally, what they find unique about the brand.
Projective Techniques
Uncovering the sources of brand equity requires that consumers' brand knowledge structures be profiled as accurately and completely as possible. Unfortunately, under certain situations, consumers may feel that it would be socially unacceptable or undesirable to express their true feelings. As a result, they may find it easier to fall back on stereotypical, "pat" answers that they believe would be acceptable or perhaps even expected by the interviewer. For example, it may be difficult for consumers to admit that a certain brand name product has prestige and enhances their self-image. As a result, consumers may instead refer to some particular product feature as the reason why they like or dislike the brand. Alternatively, it may just be that consumers find it difficult to identify and express their true feelings when asked directly even if they attempt to do so. For either of these reasons, an accurate portrayal of brand knowledge structures may be impossible without some rather unconventional research methods
Brand Personality and Relationships
Another useful set of measures to assemble the brand profile is brand personality. Brand
personality is the human characteristics or traits that can be attributed to a brand . Brand personality also can be assessed more quantitatively through adjective check-lists
or ratings. Aaker offers a five factor scale of brand personality: 1) Sincerity (e.g., downto-
earth, honest, wholesome, and cheerful), 2) Excitement (e.g., daring, spirited, imaginative,
and up-to-date), 3) Competence (e.g., reliable, intelligent, and successful), 4) Sophistication
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(e.g., upper class and charming), and 5) Ruggedness (e.g., outdoorsy and tough).
Ethnographic and Observational ApproachesEthnographic and Observational Approaches
Fresh data can be gathered by directly observing relevant actors and settings .Consumers can be
unobtrusively observed as they shop or as they consume products to capture every nuance of
their behavior. Marketers such as Procter & Gamble seek consumers’ permission to spend time
with them in their homes to see how they actually use and experience products.
Critique
Qualitative research techniques are a creative means of ascertaining consumer perceptions that may otherwise be difficult to uncover. The range of possible qualitative research techniques is only limited by the creativity of the marketing researcher. There are also drawbacks to ualitative research. The in-depth insights that emerge have to be tempered by the fact that the samples involved are often very small and may not necessarily generalize to broader
populations. Moreover, given the qualitative nature of the data, there may also be questions of
interpretation. Different researchers examining the same results from a qualitative research
study may draw very different conclusions.
Quantitative Research Techniques
Although qualitative measures are useful to identify and characterize the range of possible associations to a brand, a more quantitative portrait of the brand often is also desirable to permit more confident and defensible strategic and tactical recommendations. Whereas qualitative research typically elicits some type of verbal responses from consumers, quantitative research typically employs various types of scale questions so that numerical representations and summaries can be made. Quantitative measures are often the primary ingredient in tracking studies that monitor brand knowledge structures of consumers over time.
Awareness
Brand awareness is related to the strength of the brand in memory, as reflected by consumers' ability to identify various brand elements (i.e., the brand name, logo, symbol, character, packaging, and slogan) under different conditions. Brand awareness relates to the likelihood that a brand will come to mind and the ease with which it does so given different type of cues.
Recognition
In the abstract, recognition processes require that consumers be able to discriminate a stimulus -- a word, object, image, etc. -- as something they have previously seen. Brand recognition relates to consumers' ability to identify the brand under a variety of circumstances and can involve identification of any of the brand elements. The most basic type of recognition procedures gives consumers a set of single items visually or orally and asks them if they thought that they had previously seen or heard these items. To provide a more sensitive test, it is often useful to include decoys or lures -- items which consumers could not have possibly seen. In addition to "yes" or "no" responses, consumers also can be asked to rate how confident they are in their recognition of an item.
Recall
Brand recall relates to consumers' ability to identify the brand under a variety of circumstances. With brand recall, consumers must retrieve the actual brand element from memory when given some related probe or cue. Thus, brand recall is a more demanding memory task than brand recognition because consumers are not just given a brand element and asked to identify or discriminate it as one they had or had not already seen.
Image
Brand awareness is an important first step in building brand equity, but usually not sufficient. For most customers in most situations, other considerations, such as the meaning or image of the brand, also come into play. One vitally important aspect of the brand is its image, as reflected by the associations that consumers hold toward the brand. Brand associations come in many different forms and can be classified along many different dimensions.
Brand Performance
Brand performance relates to the ways in which the product or service attempts to meet customers' more functional needs. Thus, brand performance refers to the intrinsic properties of
the brand in terms of inherent product or service characteristics. How well does the brand rate
on objective assessments of quality? To what extent does the brand satisfy utilitarian, aesthetic,
and economic customer needs and wants in the product or service category?
Q5.
Branding is more than just a business buzzword. It has become the crux of selling in the new economy. If the old marketing mantra was," Nothing happens until somebody sells something," the new philosophy could be" Nothing happens until somebody brands something."
In its simplest form, a brand is a noun. It is the name attached to a product or service. However, upon close inspection, a brand represents many more intangible aspects of a product or service: a collection of feelings and perceptions about quality, image, lifestyle and status. It creates in the mind of customers and prospects the perception that there is no product or service on the market that is quite like yours. In short, a brand offers the customer a guarantee and then delivers on it.
You might infer, then, that if you build a powerful brand, you will in turn be able to create a powerful marketing program. However, if you can't convince customers that your product is worthy of purchasing, no amount of advertising dollars, fancy packaging or public relations will help you achieve your sales goals. Therefore, successful branding programs begin with superior products and services, backed by excellent customer service that permeates an entire organization.
Types of Brands
A brand cannot be all things to all people. By definition, no one brand is going to appeal to all customers. On the contrary, branding is based on the concept of singularity — targeting individuals in a personal manner— and therefore precludes the concept of universal appeal. This is why many brands broaden and widen their appeal by creating tertiary brands or line extenders.
Although most industries and products or services can benefit from a brand, not every product needs its own stand-alone brand. Brands can be separated into three categories: primary, secondary and tertiary.
Primary Brands - This is a company's core brand or umbrella brand. Primary brands typically garner a large percentage of a company's revenue potential and therefore need to be given priority and have a sufficient amount of advertising in order to root them firmly.

Secondary Brands - These are often line extenders, or "flankers," for a core brand. Secondary brands don't need to have their own name; usually a modifier to the brand name will suffice and strengthen the core brand. Take, for instance, a toothbrush called the Crest Deep Sweep. Crest is the core brand, and Deep Sweep is the secondary brand. Line extenders are characterized by having a descriptive term that allows the base brand to be the true selling proposition and the flanker to really designate to the audience what that particular product's key feature or benefits are.

Tertiary brands - These brands typically have insignificant revenue potentials or expectations, but they contribute to the company's overall image in some way. Therefore, they sometimes don't sport registered brand names, but just descriptors. For example, a garbage bag manufacturer may make a generic-brand bag in addition to its flagship brand. The generic line may bring in minimal revenue for the company, but it fills a need within a niche market so the company continues to manufacture it under the unregistered name Household Trash Bags. Therefore, the generic line is considered a tertiary brand for this company.