Measuring and Interpreting Brand Performance (1)

Measuring and interpreting brand performance

Measuring and interpreting brand performanceModule 4

Brand value chainIt is a structured approach to assessing the sources and outcomes of brand equity and the manner in which marketing activities create brand value.

The brand value chain thus provides insights to support brand managers, chief marketing officers, managing directors and chief executive officers, all of whom may need diff types of information.

Brand value chainThe brand value chain has several basic premises:It assumes that the value of a brand ultimately resides with customers. It assumes that the brand value creation process begins when the firm invests in a marketing program targeting actual or potential customers.

The associated marketing activity then affects customer mind set what customers know and feel about the brand.

Brand value chainThis mind set, across a broad group of customers produces the brands performance in the market place- how much and when customers purchase, the price that they pay, and so .forth.

Finally the investment community considers this market performance and other factors such as replacement cost and purchase price in acquisition- to arrive at an assessment of shareholders value in general and a value of the brand in particular

Brand value chainThe model also assumes that a number of linking factors intervene between these stages.

These linking factors determine the extent to which value created at one stage transfers or multiplies to the next stage.

Three set of multipliers moderate the transfer between the marketing program and the 3 value stages; the product quality multiplier, the marketplace conditions multiplier, and the investor sentiment multiplier.

Value stagesBrand value creation begins with marketing activity by the firmMarketing program investment: any marketing program investment that can contribute to brand value development, intentionally or not, falls into this first value stage. This stage outlines many such marketing activities like product research, development and design; marketing communication including advertising, promotion, direct and indirect marketing etc. The ability of a marketing program investment to transfer or multiply farther down the chain depends on qualitative aspects of the marketing program and the program quality multiplier.

Value stagesProgram quality multiplier: the ability of the marketing program to affect customer mind set will depend on its quality. Four particularly imp ones are:Clarity: how understandable is the brand marketing program?Relevance: how meaningful is the marketing program to customers?Distinctiveness: how unique is the marketing program?Consistency: how cohesive and well integrated is the marketing program?

Value stagesCustomer mind set: customer mind set includes everything that exist in the minds of customers with respect to a brand: thoughts, feelings, experiences, images beliefs and attitudes.Five dimensions have emerged as particularly imp measures of the customer mind setBrand awarenessBrand associationsBrand attitudesBrand attachmentBrand activity.The ability of this customer mind set to create value at the next stage depends on external factors i.e the marketplace condition multiplier.

Value stagesMarketplace conditions multiplier: the extent to which value created in the minds of customers affect market performance depends on factors beyond the individual customer. They areCompetitive superiority: how effective are the marketing investments of competing brands?Channel and other intermediary supportCustomer size and profile

Value stagesMarket performance: Six key outcomes of that response are as follows:The first two dimensions relate to price premiums and price elasticity's.A third dimension is market shareThe fourth dimension is brand expansionThe fifth dimension is cost structureAll the above said dimension leads to brand profitability, the sixth dimension.

Value stagesInvestor sentiment multiplier: Considerable factors are:Market dynamics: What are the dynamics of the financial markets as a whole?Growth potential: what are the prospects for the brand and the industry in which it operates? Risk profile: what is the risk profile for the brand?Brand contribution: how important is the brand as part of the firms brand portfolio?

Share holders Value:Based on all available current and forecasted information about a brand as well as many other considerations, the financial market place then formulates opinion and makes various assessments that have very direct financial implications for the brand valueThree important indicators are the stock price, the P/E multiple, and market capitalization rate.

IntroductionTracking studies collect information from consumers on a routine basis over time, typically through quantitative measures of brand performance on a number of key dimensions marketers can identify in the brand audit or other means.They apply the brand value chain to understanding where, how much, and in what ways brand value is being created, thus offering invaluable info about how well the brand has achieved its positioning.Tracking studies thus play an imp role by providing consistent baseline information to facilitate day to day decision making.Tracking studies involves What to track?How to conduct tracking studies?How interpret tracking studies?

What to trackProduct-brand tracking

Corporate or family brand tracking

Global tracking

How to conduct tracking studiesIn general marketers use the brand name, but it may also make sense to use a logo or symbol in probing brand structures, especially if these elements play a visible and important role in the decision processYou also need to decide whom to track, as well as when and where to track

How to interpret tracking studies

This may reflects that fact that the underlying levels of brands awareness, the strength, favorability, uniqueness, valence of brand judgments, feelings, loyalty do not change much over a period of time.