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Chapter 8

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MKT 510
Ida Berger

Chapter 8— developing a Brand equity Measurement & Management System  CBBE is the differential effect that knowledge about the brand has on customer response to the marketing of that brand, 2 basic approaches to measuring brand equity o Indirect approach: can assess potential sources of CCBE by identifying & tracking consumers brand knowledge  Thoughts, feelings, images, perceptions, beliefs linked to the brand o Direct approach: can assess the actual impact of brand knowledge on consumer response to different aspects of the marketing program  Brand equity measurement system: is a set of research procedures designed to provide marketers with timely, accurate, & actionable info on brands so they can make the best possible tactical decisions in the short run & strategic decisions in the long run  Brand value chain: means by which marketers can trace the value creation process for their brands to better understand the financial impact of their marketing expenditures & investments The new Accountability  Virtually every marketing dollar spent today must be justified as both effective & efficient in terms of “return of marketing investment” (ROMI).  Some observers believe that up to 70% (or even more) of marketing expenditures may be devoted to programs & activities that cannot be linked to short-term incremental profits, but yet can be seen as improving brand equity. The brand value chain  Broader perspective than just the CBBE model  Brand value chain: a structured approach to assessing the sources & outcomes of brand equity & the manner by which marketing activities create brand value. Marketing Program Investments  Any marketing program that can be attributed to brand value development  the ability of a marketing program investment to transfer or multiply farther down the chain depends on qualitative aspects of the marketing program & the program quality multiplier Program Quality Multiplier  The ability of the marketing program to affect customer mindset Customer Mind-set  In what way have customers been changed as a result of the marketing program?  Brand value is created at this stage when customers have o Deep, broad brand awareness o Appropriately strong, favourable, & unique POP & POD o Positive brand judgements & feelings o Intense brand attachment & loyalty o A high degree of brand activity  The ability of this customer mindset to create value at the next stage depends on marketplace conditions Marketplace conditions multiplier  The extent to which value created in the minds of customers affects market performance Market performance  How do customers respond in the marketplace?  Brand profitability: combination of price premiums, price elasticity, market share, brand expansions, cost structure  The ability of the brand value created at this stage to reach the final depends on the investor sentiment Investor sentiment multiplier  The extent to which the value generated through brand market performance is manifested in shareholder value Shareholder value  Based on all available current & forecasted info about a brand, the financial marketplace formulates opinions & assessments that have very direct financial implications for the brand value Brand Equity Measurement System  A set of research procedures that is designto provide timely, accurate, & actionable info for marketers so that they can make the best possible tactical decisions in the short run & strategic decisions in the long run  Brand tracking o Info collected from consumers on a routine basis over time o Often done on a continuous basis o Provide d
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