Brand equity research

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Question: what is "brand equity", and why would you measure it?

Answer: brand equity research has two elements:

1. Brand profiling - where your brand and its competitors are profiled against a set of indicators and attributes. The indicators are usually fixed within the model, but attributes may be specific to the brand or its category
2. Conversion model - where the model assesses the degree of strength or vulnerability you have in your customer base in relation to competition

The usual core measures relate to:

• Awareness
• Familiarity
• Favorability
• Usage
• Loyalty
• Individual brand/category attributes

These measures can be researched cheaply and effectively using only four sets of questions:

1. Brand/category usage
2. Brand stature
3. Brand intimacy
4. Brand attributes

In more detail…………

Brand equity research is an attempt to put a value on the strength of a brand in the market, in the same way that the shares/stocks put a value on the strength of the corporation in the eyes of the investors. Indeed, brand equity research has shown that the two are related - the growth in brand equity correlates with the growth in stock values, and also sales, profits, price premiums and employee satisfaction. Given that brand value often accounts for a very significant proportion of the value of the total company (75% for Ford, 51% for the Coca-Cola Corporation), and strong brands drive profitability in several ways (additional sales, reduced costs, referals to new customers), this does make sense.

Brand equity research has two elements:

1. Brand profiling - where your brand and its competitors are profiled against a set of indicators and attributes. The indicators are usually fixed within the model, but attributes may be specific to the brand or its category
2. Conversion model - where the model assesses the degree of strength or vulnerability you have in your customer base in relation to competition. Credit card companies use this to identify which competitive customers they should approach as they are open to alternative offers, and which they should not waste their time on because they are loyal to their existing suppliers

The usual core measures relate to:

• Awareness
• Familiarity
• Favorability
• Usage
• Loyalty
• Individual brand/category attributes

Many of the brand equity research agencies have a tendency to over-complicate this type of research, turning a 10-15 minute questionnaire into a 20-30 minute one. This usually leads to a great deal more data than the audience can cope with, and considerably higher costs. However, it can be very cheap to run if kept to a core number of questions. Indeed. by asking four sets of questions, you can get a reading on:

1. brand/category usage - from usage questions
2. awareness/familiarity - from brand trust and intimacy questions
3. brand stature - from a brand stature question
4. brand intimacy - from a brand intimacy question
5. a categorisation of your customers and potential customers (suspect, potential, lost customer, customer, advocate) - from brand stature/intimacy & usage questions
6. performance against your key brand attributes - from brand attribute questions
7. drivers of loyalty - by correlating your brand attribute performance scores with your combined brand stature/intimacy scores
8. association between brand loyalty & usage - by tabulating brand stature/intimacy scores against usage categories (or using categorical statistical techniques)

These four sets of questions are:

• Which brands are you currently buying/using [within this sort of environment/situation/mood]?

• How would you rate the quality of the products/services of this brand?

• To what extent is this your kind of brand?

• To what extent do you agree with the following statements about these brands?

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