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Chapter 8

Ch. 8 - Developing a Brand Equity Measurement and Management System

3 Pages

Course Code
MKT 510
Ida Berger

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Wk. 6 – Chapter 8: Developing a Brand Equity Measurement and Management System Lecture on: October 18, 2012  Brand equity measurement system: set of research procedures designed to provide marketers with timely, accurate, and actionable information on brands to make short and long term decisions. The goal is to understand the sources and outcomes of brand equity and to relate the two as much as possible  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 and impacts The new accountability  ROMI: Return on marketing investment  To complicate matters, observers believe that up to 70% of marketing expenditures may be devoted to programs and activities that cannot be linked to short-term incremental profits, but yet can be seen as improving brand equity  Marketers must go beyond ROI to assess whether brands are actually assets: o Need to measure brand’s ability to generate cash flows o Need to understand that you can only create value by changing consumer behaviour, not consumer attitude o Should measure brand equity in way that captures the source and scale of the emotional component the brand adds to the functionality of a product The brand value chain  Assumes that the value of a brand ultimately lies with a customer  Stage 1: firm invests in a marketing program targeting actual or potential customers  Stage 2: the associated marketing activity then affects the customer mind-set, what they know and feel about the brand  Stage 3: mind-set affects market performance, how and when they buy, how much they pay, etc.  Stage 4: investment community considers market performance to assess shareholder value in general and a value of the brand in particular  Three multipliers: the program quality multiplier, the marketplace conditions multiplier, and the investor sentiment multiplier  Review page 318 for diagram  Value stages: o Marketing Program Investment o Program Quality Multiplier depends on: clarity, relevance, distinctiveness, and consistency o Customer Mind-Set: 5 important measures of customer mind-set:  Brand awareness  Brand associations  Brand attitudes  Brand attachment  Brand activity o Marketplace Conditions Multiplier depends on the following factors:  Competitive superiority  Channel and other intermediary support  Customer size and profile o Market Performance 1 to 3: Determine direct revenue stream. Brand value is created with  Price premiums
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