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Brand value can be measured by evaluating its output in terms of customer base, revenue and profitability. Brands with high customer base, revenue and profitability are superior brands whilst those with low customer base, revenue and profitability are inferior.
Two companies offer consumers the same product at the same price and quality, yet one sells a lot better than the other. Why? The answer is the intangible value inherent in the brand name. It could manifest in the form of positive image, higher market share or even a price premium. But how can we measure the intangible value of a brand? Simple methods such as ratings of a brand’s attractiveness (either in the form of a single question or an index) will not distinguish the impact of tangible features and brand intangibles. What is required is an approach that can make this distinction and indicate the pure value of the brand in dollar terms. In this discussion we will take a look at how such brand value (often referred to as brand equity) can be reliably measured.
The basic problem in measuring the value of a brand is the degree to which one can control for the influence of various extraneous problems. The extent of these problems can vary by category. For example, if one were interested in understanding the brand value (or lack thereof) of private label brands (or store brands) compared to national brands in the breakfast cereal market, a simple experiment can be run. In this experiment one could switch the packaging but not the contents of the various cereal brands being tested, to measure the impact of the brand name. The problem becomes more difficult when we talk about complex services such as hotel chains or cell phone service. Simply switching packaging is no longer an option. What can we do in these situations?
The answer lies with a technique called discrete choice conjoint analysis. It is a trade-off based method that requires consumers to make choices based on the product combinations provided. The pattern of choices made provides us with enough information to identify the relative importance of the various features – brand included - being tested. Once we know this information it is relatively straightforward to hold the impact of the various features constant and identify the actual impact of the brand name on respondent choice. In essence, this is akin to switching the cereal boxes and holding the contents constant. This approach can be used as long as the product or service in question can be described using tangible features.
Brand value is notoriously difficult to quantify because it is often based in part on people’s perceptions of a brand and a promise about quality or performance.
Some businesses have the majority of their company value wrapped up in it. Coca-Cola has a market value of $bn and an estimated brand value of $bn, so nearly half of Coca-Cola’s company value is invested in a single intangible asset – its brand.
If it wasn’t hard enough already, media fragmentation has exponentially increased the number of potential brand touch points. In particular, digital, and the far reaching speed and potency of social media, has raised the stakes, meaning brand reputations, and therefore brand value, can be won or lost, at scale, in the touch of a screen.
Often, different companies give different numbers for a company's brand value. I am afraid there is no clear cut answer for this question.
Brand value can be measured by evaluating its output in terms of customer base, revenue and profitability.
value of any product is measured by cost out of its benefits.
cost=value/benefit
We frequently refer to 'brand values' as if everyone knows what we mean. It is assumed that there is a general understanding that a brand stands for something and what it stands for must have a value. These values can be critically important or small inconsequential things but above all they are the things which give the brand its worth and differentiate it from all others. Through these brand values a product or service is enhanced beyond its functional purpose. In this context the brand provides the consumer with more value and this is why they are prepared to pay a premium to acquire it.
By how much profit would the company / product / service stop generating if it no longer had the rights to use their own brand (and all brand elements) but still could sell the exact same product under a new brand. It is important to stress that profit is the key factor here and not revenue because brand value influences all company relationships, providers considered. That means it could not only affect sales but also the cost of supplies and therefore margins.
Brand equity can be viewed from several different perspectives. The hard-line perspective is that of financial outcomes which look at price premiums. That is, how much more will a consumer pay for a product or service that is branded over a product or service that is generic?
A softer perspective looks at brand extension and the value that a brand leads to the introduction of other products. This approach also considers the reverse dynamic of the impact of a new product or service on the existing brand.
There is also a third perspective — customer-based brand equity — which looks at how consumers think, feel, and act with respect to the brand.
It might help you if you first clarify which perspective you would like to adopt by pinpointing what outcome you are after.
Brand equity market research falls into one of three camps: Tracking, exploring change, and/or extending brand power.
Market research that focuses on tracking makes comparison among competitive brands or products against a benchmark.
When exploring change is the research goal, customer brand attitude is tapped regarding branding decisions that might result in repositioning or renaming products or services. A deeper examination of extending brand power is carried out when substantive additions to a brand are considered. Each research goal requires a different tact.
A customer-based perspective in the measurement of brand equity focuses on the experiences that consumers have with a brand. The stronger the brand, the stronger the customer's attitude toward the products or services associated with the brand.
When customers experience a product or service, they gauge the overall brand quality and tend to infer certain brand attributes. If these experience measures are positive and endure over time, brand loyalty typically results. Today, customers can — and do — easily communicate the strength of their brand attitude to others via customer reviews and social sharing.
Awareness, reach, and image association are all aspects of brand equity that may not be closely associated with consumer experience.
These measures of brand equity may reflect the impact of traditional advertising campaigns, and the influence of social or interactive media.
Brand awareness is an indicator of how branding efforts spotlight a product or service. Reach indicates how far and wide that spotlight shines. And image association reveals what the brand promises and what it stands for in the eyes of consumers.
Product differentiation is a lynchpin for brand loyalty, confidence in a brand, and the potential for brand switching. Customer perceptions about brand differentiation tend to be strongest when an actual product or service experience has occurred, but brand differentiation is not immune to the influence of advertising.
Differentiation may float on product or brand recommendations in social media rather than any personal experiences with a brand.
Because differentiation is so susceptible to social influence, it lends itself to measurement across multiple media channels.
Ideally, brand equity measurement will include both qualitative and quantitative approaches. Focus groups can provide a good forum for exploring customer perceptions and motivation. Conjoint analysis can reveal key consumer decision-making processes.
Effective measurement of brand equity is critical to the development of brand strategy and ultimately supports return-on-investment analysis. Which brings us full circle, back to the financial outcomes perspective on brand equity.
A softer perspective looks at brand extension and the value that a brand leads to the introduction of other products. This approach also considers the reverse dynamic of the impact of a new product or service on the existing brand.
There is also a third perspective — customer-based brand equity — which lohow consumers think, feel, and act with respect to the brand.
It might help you if you first clarify which perspective you would like to adopt by pinpointing what outcome you are after.
Brand equity market research falls into one of three camps: Tracking, exploring change, and/or extending brand power.
Market research that focuses on tracking makes comparison among competitive brands or products against a benchmark.
When exploring change is the research goal, customer brand attitude is tapped regarding branding decisions that might result in repositioning or renaming products or services. A deeper examination of extending brand power is carried out when substantive additions to a brand are considered. Each research goal requires a different tact.
A customer-based perspective in the measurement of brand equity focuses on the experiences that consumers have with a brand. The stronger the brand, the stronger the customer's attitude toward the products or services associated with the brand.
When customers experience a product or service, they gauge the overall brand quality and tend to infer certain brand attributes. If these experience measures are positive and endure over time, brand loyalty typically results. Today, customers can — and do — easily communicate the strength of their brand attitude to others via customer reviews and social sharing.
Awareness, reach, and image association are all aspects of brand equity that may not be closely associated with consumer experience.
These measures of brand equity may reflect the impact of traditional advertising campaigns, and the influence of social or interactive media.
Brand awareness is an indicator of how branding efforts spotlight a product or service. Reach indicates how far and wide that spotlight shines. And image association reveals what the brand promises and what it stands for in the eyes of consumers.
Product differentiation is a lynchpin for brand loyalty, confidence in a brand, and the potential for brand switching. Customer perceptions about brand differentiation tend to be strongest when an actual product or service experience has occurred, but brand differentiation is not immune to the influence of advertising.
Differentiation may float on product or brand recommendations in social media rather than any personal experiences with a brand.
Because differentiation is so susceptible to social influence, it lends itself to measurement across multiple media channels.
Ideally, brand equity measurement will include both qualitative and quantitative approaches. Focus groups can provide a good forum for exploring customer perceptions and motivation. Conjoint analysis can reveal key consumer decision-making processes.
Effective measurement of brand equity is critical to the development of brand strategy and ultimately supports return-on-investment analysis. Which brings us full circle, back to the financial outcomes perspective on brand equity.
Brand value can be measured by market share and the profitability of your customers.Furthermore you can measure brand value by customer retention & loyalty.The longer you keep customers,the more profitable they are to the organisation.
