Given that the power of a brand resides in the minds of consumers and how it

Marketing
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changes their response to marketing, There are two basic approaches to measuring brand equity. Briefly, describe each of these approaches.

 

Apr 26th, 2014

There are two basic approaches to measuring customer-based brand equity. The ‘indirect” approach attempts to assess potential sources of customer-based brand equity by measuring brand knowledge (i.e., brand awareness and brand image). The “direct” approach attempts to measure customer-based brand equity more directly by assessing the impact of brand knowledge on consumer response to different elements of the firm’s marketing program. The indirect and direct approaches to measuring customer-based brand equity are complementary and should be used together. The indirect approach is useful in identifying what aspects of brand knowledge cause the differential response that creates customer-based brand equity; the direct approach is useful in determining the nature of the differential response.

Indirect approach.

The first approach to measuring customer-based brand equity, measuring brand knowledge, requires measuring brand awareness and the characteristics and relationships among brand associations. Because any one measure typically captures only a particular aspect of brand knowledge, multiple measures must be employed to capture the multidimensional nature of brand knowledge.

Brand awareness can be assessed effectively through a variety of aided and unaided memory measures that can be applied to test brand recall and recognition. For example, brand recognition measures may use the actual brand name or some perceptually degraded version of the brand name. Brand recall measures may use different sets of cues, such as progressively narrowly defined product category labels. Besides correctness, the ease of recall and recognition p9rformance can be assessed with more subtle measures such as response latencies to provide a fuller picture of memory performance with respect to the brand. Brand recall can also be coded in terms of the order of recall to capture the extent to which the name is “top of mind” and thus strongly associated with the product category in memory.

There are many ways to measure the characteristics of brand associations (i.e., their type, favourability, and strength). Qualitative techniques can be employed to suggest possible associations. For example, free association tasks can be used whereby consumers describe what the brand means to them in an unstructured format, either individually or in small groups. Specifically, consumers might be probed in terms of “who, what, when, where, why, and how” types of questions about the brand. Projective techniques such as sentence completion, picture interpretation, and brand personality descriptors may also be useful, especially if consumers are unwilling or otherwise unable to express their feelings.

These indirect measures, however, may not adequately capture the favourability or strength of associations, and more direct measures often are necessary to provide additional information. For example, Ajzen and Fishbein (1980) give a detailed description of how beliefs and evaluations of attributes and benefits can be scaled and how attitudes can be measured through a structured format, providing an illustrative example in a consumer setting.  Response time measures of attitudes have been used as a proxy for attitude strength.

Relationships among brand associations can be measured by two general approaches:

(1) comparing the characteristics of brand associations in some way and

(2) directly asking consumers for information relevant to the congruence, competitive overlap, or leverage for the brand associations.

Congruence is the extent to which brand associations are shared. Congruence can be assessed by comparing the pattern of associations across consumers to determine which associations are common or distinctive. Additionally, consumers could be asked directly their conditional expectations for attribute, benefit, or attitude associations (i.e., the likelihood that a product has one association given that it has another).

Competitive overlap of brand associations is the extent to which brand associations are linked to the product category (i.e., identification) and are or are not shared with other brands (i.e., uniqueness). Identification can be assessed by examining how consumers respond to brand recall tasks with product category or some other type of cues. Uniqueness of brand associations can be assessed by comparing the characteristics of associations of the focal brand (i.e., their type, favourability, and strength) with the characteristics of associations for competing brands. Additionally, consumers could be asked directly (1) how strongly they identify the brand with the product category and (2) what they consider to be the unique and shared aspects of the brand. Multivariate techniques such as multidimensional scaling also can be employed.

Leverage is the extent to which other brand associations linked to a brand association become secondary associations for the brand. Leverage can be assessed by comparing the characteristics for the particular company, person, place, event, or product category with those characteristics for the focal brand according to their type, favourability, and strength. Additionally, consumers could be asked directly what inferences are made about the brand on the basis of knowledge of the particular person, place, event, company, or product category.

Direct approach.

The second approach to measuring customer-based brand equity, directly measuring the effects of brand knowledge on consumer response to marketing for the brand, requires experiments in which one group of consumers responds to an element of the marketing program when it is attributed to the brand and another group of consumers responds to that same element when it is attributed to a fictitiously named or unnamed version of the product or service. By attributing the marketing element to an unfamiliar or anonymous product, consumers should interpret it with respect to their general knowledge about the product or service, as well as prototypical product specifications and price, promotion, and distribution strategies. Comparing the responses of the two groups thus provides an estimate of the effects due to the specific knowledge about the brand that goes beyond basic product knowledge.

The classic example of this approach is the so called the “blind test” in which consumers evaluate a product on the basis of a description, examination, or actual consumption experience, either with or without brand attribution. Past research of this type has shown that knowledge of the brand affects consumer perceptions, preferences, and choices for a product Blind tests could be used to examine consumer response to other elements of the marketing mix such as proposed pricing, promotion, and channels of distribution changes.

One important consideration with the direct approach is the experimental realism that can be achieved when some aspect of the marketing program is attributed to a fictitiously named or unnamed version of the product or service. Detailed concept statements can be employed in some situations when it may be otherwise difficult for consumers to examine or experience the marketing mix element without being aware of the brand. Thus, concept statements may be useful in assessing customer-based brand equity when consumers make a product choice or evaluate a change in the product composition, judge a proposed brand extension, or respond to a proposed price or distribution change. Assessing customer-based brand equity with marketing communications presents a bigger challenge with the direct approach (e.g., consumer response to a proposed new advertising campaign). In this case, storyboards and animatic or photomatic versions of an ad could be used rather than a finished ad to allow for the necessary disguise of the brand. Though this approach should work well with “informational” ads, it probably would be less appropriate for “transformational” ads emphasising user, usage, or some other type of imagery, in which production values are a critical ingredient in achieving communication goals.

Finally, another potentially useful approach for directly assessing customer-based brand equity is conjoint or trade-off analysis . Conjoint analysis can be used to explore the main effects of the brand name (i.e., differences in preference or choice for the brand) and interaction effects between the brand name and other marketing mix elements such as price, product features, and promotion or channel choices (i.e., differences in perceptions for the brand). Note that if conjoint analysis is employed, care must be taken that consumers do not evaluate unrealistic product profiles or scenarios that violate their basic expectations for the product or brand.

The direct approach to measuring customer-based brand equity involves measuring the effects of brand knowledge on consumer response to marketing-for example, by conducting experiments in which one group of consumers respond to an element of the marketing mix when it is attributed to the brand, and another group of consumers respond to the same marketing mix element when it is attributed to a fictitiously named or unnamed version of the product (goods and services).


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