Description
Analyzing Market Data and Trends
Identify a company that has successfully built its brand equity in your country and compare and contrast the different methods found in your textbook for evaluating brand equity.
- Identify factors that influence brand performance for your company, such as consumer behavior, competitive landscape, and industry dynamics.
- Analyze market data and trends to determine the impact of these factors on brand performance.
- Based on the analysis of market data and trends, develop strategies and recommendations to improve market performance.
- Explain how the strategies and recommendations will improve brand equity. Are there any risks to your strategy?
Your well-written paper should meet the following requirements:
- A minimum of 5 pages in length, not including the title and reference pages.
- Formatted according to APA 7th edition
- Provide support for your statements with in-text citations from a minimum of four scholarly articles. Two of these sources may be from the class readings, textbook, or lectures, but the other two must be external.
book of the course:
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 5th edition Published by Pearson (February 28, 2019) © 2020 by Kevin Lane Kelle, Vanitha Swaminathan
Measuring, and Managing Brand Equity
Fifth Edition
Chapter 11
Measuring Outcomes of Brand
Equity: Capturing Market
Performance
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Learning Objectives
11.1 Recognize the multidimensionality of brand equity and
the importance of multiple methods to measure it
11.2 Contrast different comparative methods to assess brand
equity
11.3 Explain the basic logic of how conjoint analysis works
11.4 Review different holistic methods for valuing brand
equity
11.5 Describe the relationship between branding and finance
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparative Methods
• Brand-Based Comparative Approaches
• Marketing-Based Comparative Approaches
• Conjoint Analysis
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Brand-Based Comparative Approaches
• Competitive brands used as benchmarks by consumers
– Exemplar: Category leader or some other brand that
consumers feel is representative of the category, like
their most preferred brand
• Applications
– Classic example is blind testing research
– Consumers examine or use a product with or without
brand identification
– Differences typically emerge
• Critique
– Learning is limited by the number of different
applications examined
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Marketing-Based Comparative
Approaches
• Hold the brand fixed
– Examine consumer response based on changes in the marketing
program
• Applications
– Long academic and industry tradition of exploring price premiums
using marketing-based comparative approaches
▪ Variations to derive similar types of demand curves
– Many firms now try to assess price sensitivity and
willingness-to-pay thresholds for different brands
• Critique
– May be difficult to discern whether consumer responses to
changes in the marketing stimuli are being caused by brand
knowledge or by more generic product knowledge
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Figure 11.1
Reactions to Proposed Planters Extensions
Average Scale Rating*
Proposed Extensions
10
Peanuts
9
Snack mixes, nuts for baking
8
—
7
Pretzels, chocolate nut candy, caramel corn
6
Snack crackers, potato chips, nutritional granola bars
5
Tortilla chips, toppings (ice cream/dessert)
4
Lunchables/lunch snack packs, dessert mixes (cookie/cake/brownie)
3
Ice cream/ice cream bars, toppings (salad/vegetable)
2
Cereal, toaster pastries, Asian entrees/sauces, stuffing mix, refrigerated
dough, jams/jellies
1
Yogurt
*Consumers rated hypothetical proposed extensions on an 11-point scale anchored by 0
(definitely would not expect Planter’s to sell it) and 10 (definitely would expect Planter’s to
sell it).
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Conjoint Analysis
• Survey-based multivariate technique that enables marketers to
profile the consumer decision process with respect to products
and brands
– Part worth: The value consumers attach to each attribute
level, as statistically derived by the conjoint formula
• Applications
– Allows study of different brands and different aspects of the
product or marketing program simultaneously
▪ Product composition, price, distribution outlets, etc.
• Critique
– Marketing profiles may violate consumers’ expectations
based on what they already know about brands
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Holistic Methods (1 of 2)
• Residual Approach
– Examines the value of the brand by subtracting
consumers’ preferences for the brand from their overall
brand preferences
• Valuation Approach
– Places a financial value on brand equity
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Holistic Methods (2 of 2)
• Residual approach
– Examines the value of the brand by subtracting
consumers’ preferences for the brand from their overall
brand preferences
▪ Based on physical product attributes alone
• Valuation approach
– Places financial value on brand equity for
▪ Accounting purposes, mergers and acquisitions, or
other such reasons
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Residual Approaches (1 of 2)
• Scanner Panel
• Choice Experiments
• Multi-Attribute Attitude Models
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Residual Approaches (2 of 2)
• Residual approach is most suited for brands with many
product-related attribute associations
– Cannot distinguish between different types of
nonproduct-related attribute associations
– Generally take a static view of brand equity
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Valuation Approaches (1 of 2)
• Widely held belief is that much of corporate value of it is wrapped up in
the value of a brand
Company
Brand Value (in $
billions)*
Total Value (in $
billions)**
Brand Value as a Percentage
of Overall Value
Apple
184.1
868.88
21%
141.7
729.1
19%
Microsoft
79.9
659.9
12%
Coca-Cola
69.7
195.5
36%
Amazon
64.7
563.5
11%
Samsung #
56.2
300
19%
Toyota
50.3
188.2
27%
48.2
420.8
11%
Mercedes
47.8
79.3
60%
IBM
46.8
142
33%
*Source: Data are for 2017;
**Source: Market Capitalization information based on data from C R S P Monthly
# Samsung market capitalization converted to U S Currency from South Korean Won
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Valuation Approaches (2 of 2)
• Accounting Background
• Historical Perspectives
• General Approaches
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Brand Valuation: A Review of Major
Approaches
• Academic approaches
– Seminal academic research study proposed estimating
a firm’s brand equity derived from financial market
estimates of brand-related profits
• Three additional well-established brand valuation
approaches
– Interbrand
– BrandZ
– Brand finance
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Interbrand
• Leading brand valuation firm
• How a brand benefits an organization
– Internally and externally
• Three key components:
1. Financial forecast
2. Role of brand
3. Strength analysis
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
BrandZ (1 of 2)
• Based on the Meaningfully Different Framework
– Suggests brands create value if they offer three key
benefits:
▪ They are meaningful
▪ They are different
▪ They are salient
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
BrandZ (2 of 2)
• Key steps in the BrandZ valuation include:
– Calculating financial value
– Calculating brand contribution
– Calculating brand value
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Brand Finance
• Based on the “relief from royalty” approach
– Brand’s value is based on the royalties that a company
would have paid for licensing that brand from a third
party
▪ Assuming it was not the brand owner
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparing the Major Brand Valuation
Approaches (1 of 4)
1. All three approaches are based on some variation of the
income-based approach to brand valuation
– All are based on projections of income
2. All three methods compute the present value of projected
future earnings
– Based on an estimate of brand strength, and
– An application of a discount rate
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparing the Major Brand Valuation
Approaches (2 of 4)
3. All three approaches use available financial and market
data
– And compute the economic value added
4. Types of data used to measure brand perceptions vary
across the three approaches
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparing the Major Brand Valuation
Approaches (3 of 4)
• Comparisons of Brand Values in 2016 ($ millions)
Blank
Interbrand
BrandZ
Brand Finance
133,252
245,581
109,470
Apple
178,119
234,671
107,141
Amazon
50,338
139,286
106,396
Coca-Cola
73,102
78,142
31,885
Toyota
53,580
28,660
46,255
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparing the Major Brand Valuation
Approaches (4 of 4)
• Spend Wisely
– Focus and be creative
• Look for Benchmarks
– Examine competitive spending levels and historical
company norms
• Be Strategic
– Apply brand equity models
• Be Observant
– Track both formally and informally
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Copyright
This work is protected by United States copyright laws and is
provided solely for the use of instructors in teaching their
courses and assessing student learning. Dissemination or sale of
any part of this work (including on the World Wide Web) will
destroy the integrity of the work and is not permitted. The work
and materials from it should never be made available to students
except by instructors using the accompanying text in their
classes. All recipients of this work are expected to abide by these
restrictions and to honor the intended pedagogical purposes and
the needs of other instructors who rely on these materials.
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Strategic Brand Management: Building,
Measuring, and Managing Brand Equity
Fifth Edition
Chapter 11
Measuring Outcomes of Brand
Equity: Capturing Market
Performance
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Learning Objectives
11.1 Recognize the multidimensionality of brand equity and
the importance of multiple methods to measure it
11.2 Contrast different comparative methods to assess brand
equity
11.3 Explain the basic logic of how conjoint analysis works
11.4 Review different holistic methods for valuing brand
equity
11.5 Describe the relationship between branding and finance
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparative Methods
• Brand-Based Comparative Approaches
• Marketing-Based Comparative Approaches
• Conjoint Analysis
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Brand-Based Comparative Approaches
• Competitive brands used as benchmarks by consumers
– Exemplar: Category leader or some other brand that
consumers feel is representative of the category, like
their most preferred brand
• Applications
– Classic example is blind testing research
– Consumers examine or use a product with or without
brand identification
– Differences typically emerge
• Critique
– Learning is limited by the number of different
applications examined
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Marketing-Based Comparative
Approaches
• Hold the brand fixed
– Examine consumer response based on changes in the marketing
program
• Applications
– Long academic and industry tradition of exploring price premiums
using marketing-based comparative approaches
▪ Variations to derive similar types of demand curves
– Many firms now try to assess price sensitivity and
willingness-to-pay thresholds for different brands
• Critique
– May be difficult to discern whether consumer responses to
changes in the marketing stimuli are being caused by brand
knowledge or by more generic product knowledge
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Figure 11.1
Reactions to Proposed Planters Extensions
Average Scale Rating*
Proposed Extensions
10
Peanuts
9
Snack mixes, nuts for baking
8
—
7
Pretzels, chocolate nut candy, caramel corn
6
Snack crackers, potato chips, nutritional granola bars
5
Tortilla chips, toppings (ice cream/dessert)
4
Lunchables/lunch snack packs, dessert mixes (cookie/cake/brownie)
3
Ice cream/ice cream bars, toppings (salad/vegetable)
2
Cereal, toaster pastries, Asian entrees/sauces, stuffing mix, refrigerated
dough, jams/jellies
1
Yogurt
*Consumers rated hypothetical proposed extensions on an 11-point scale anchored by 0
(definitely would not expect Planter’s to sell it) and 10 (definitely would expect Planter’s to
sell it).
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Conjoint Analysis
• Survey-based multivariate technique that enables marketers to
profile the consumer decision process with respect to products
and brands
– Part worth: The value consumers attach to each attribute
level, as statistically derived by the conjoint formula
• Applications
– Allows study of different brands and different aspects of the
product or marketing program simultaneously
▪ Product composition, price, distribution outlets, etc.
• Critique
– Marketing profiles may violate consumers’ expectations
based on what they already know about brands
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Holistic Methods (1 of 2)
• Residual Approach
– Examines the value of the brand by subtracting
consumers’ preferences for the brand from their overall
brand preferences
• Valuation Approach
– Places a financial value on brand equity
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Holistic Methods (2 of 2)
• Residual approach
– Examines the value of the brand by subtracting
consumers’ preferences for the brand from their overall
brand preferences
▪ Based on physical product attributes alone
• Valuation approach
– Places financial value on brand equity for
▪ Accounting purposes, mergers and acquisitions, or
other such reasons
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Residual Approaches (1 of 2)
• Scanner Panel
• Choice Experiments
• Multi-Attribute Attitude Models
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Residual Approaches (2 of 2)
• Residual approach is most suited for brands with many
product-related attribute associations
– Cannot distinguish between different types of
nonproduct-related attribute associations
– Generally take a static view of brand equity
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Valuation Approaches (1 of 2)
• Widely held belief is that much of corporate value of it is wrapped up in
the value of a brand
Company
Brand Value (in $
billions)*
Total Value (in $
billions)**
Brand Value as a Percentage
of Overall Value
Apple
184.1
868.88
21%
141.7
729.1
19%
Microsoft
79.9
659.9
12%
Coca-Cola
69.7
195.5
36%
Amazon
64.7
563.5
11%
Samsung #
56.2
300
19%
Toyota
50.3
188.2
27%
48.2
420.8
11%
Mercedes
47.8
79.3
60%
IBM
46.8
142
33%
*Source: Data are for 2017;
**Source: Market Capitalization information based on data from C R S P Monthly
# Samsung market capitalization converted to U S Currency from South Korean Won
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Valuation Approaches (2 of 2)
• Accounting Background
• Historical Perspectives
• General Approaches
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Brand Valuation: A Review of Major
Approaches
• Academic approaches
– Seminal academic research study proposed estimating
a firm’s brand equity derived from financial market
estimates of brand-related profits
• Three additional well-established brand valuation
approaches
– Interbrand
– BrandZ
– Brand finance
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Interbrand
• Leading brand valuation firm
• How a brand benefits an organization
– Internally and externally
• Three key components:
1. Financial forecast
2. Role of brand
3. Strength analysis
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
BrandZ (1 of 2)
• Based on the Meaningfully Different Framework
– Suggests brands create value if they offer three key
benefits:
▪ They are meaningful
▪ They are different
▪ They are salient
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
BrandZ (2 of 2)
• Key steps in the BrandZ valuation include:
– Calculating financial value
– Calculating brand contribution
– Calculating brand value
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Brand Finance
• Based on the “relief from royalty” approach
– Brand’s value is based on the royalties that a company
would have paid for licensing that brand from a third
party
▪ Assuming it was not the brand owner
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparing the Major Brand Valuation
Approaches (1 of 4)
1. All three approaches are based on some variation of the
income-based approach to brand valuation
– All are based on projections of income
2. All three methods compute the present value of projected
future earnings
– Based on an estimate of brand strength, and
– An application of a discount rate
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparing the Major Brand Valuation
Approaches (2 of 4)
3. All three approaches use available financial and market
data
– And compute the economic value added
4. Types of data used to measure brand perceptions vary
across the three approaches
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparing the Major Brand Valuation
Approaches (3 of 4)
• Comparisons of Brand Values in 2016 ($ millions)
Blank
Interbrand
BrandZ
Brand Finance
133,252
245,581
109,470
Apple
178,119
234,671
107,141
Amazon
50,338
139,286
106,396
Coca-Cola
73,102
78,142
31,885
Toyota
53,580
28,660
46,255
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Comparing the Major Brand Valuation
Approaches (4 of 4)
• Spend Wisely
– Focus and be creative
• Look for Benchmarks
– Examine competitive spending levels and historical
company norms
• Be Strategic
– Apply brand equity models
• Be Observant
– Track both formally and informally
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Copyright
This work is protected by United States copyright laws and is
provided solely for the use of instructors in teaching their
courses and assessing student learning. Dissemination or sale of
any part of this work (including on the World Wide Web) will
destroy the integrity of the work and is not permitted. The work
and materials from it should never be made available to students
except by instructors using the accompanying text in their
classes. All recipients of this work are expected to abide by these
restrictions and to honor the intended pedagogical purposes and
the needs of other instructors who rely on these materials.
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved
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