1. business and industrial
2. advertising and marketing
3. marketing


What’s Brand Equity?

How do we measure it?

What drives equity? How can we improve it?

How do we make use of our knowledge and
understanding of brand equity?
Brand Equity
3
Brand Equity
Brand equity is the incremental value
that a brand derives from the thoughts
and feelings that it evokes
4
iPod and ZEN
… superior
product features
… superior
brand equity
(Sim Wong Hoo)
Apple understood
the teens and
young adults
market.
8

As people get to know a brand they develop thoughts and feelings
about the brand. Brand equity is the incremental value that a brand
derives from these thoughts and feelings.
Awareness,
interest,
consideration
Buzz, news,
gossip, rumours,
worries
The persona
that it exudes
Images,
symbols,
emotions
Benefits
and their
relevance
Popular,
fashionable,
prestigious
10
Benefits of Brand Equity






Loyal Customers
Charge a price premium
Trade co-operation
Brand extensions
Brand licensing
Communication messages get through
Brand equity yields profitability
At a time when stakeholders are demanding greater accountability of
marketing, the pursuit and measurement of brand equity should gain
significance. No other asset compares with a high equity brand in its
potential to generate future cash flow and sustain long term profitability.
15
Loyalty Pyramid
Different levels of Engagement with Brand
Recommenders
Preferrers
Dependables
Regulars
Consideration
Trial
Awareness
Brand
Loyalty
Most Frequent
Current
Would Consider
Ever Use
TOM + Unaided + Aided
21
Measuring engagement at different levels of Loyalty Pyramid
This example pertains to a market leader (?)
? +2: Recommenders has increased
by + 2 % points versus prior period
Recommenders
23
+2
Preferrers
25
+3
Dependables
24
+1
Use most often
Regulars
Considerers
In customers repertoire
Trialists
Aware
ensuring
loyalty
44
63
70
52
ensuring
performance
Behavioural
Loyalty
providing
relevance
Relevance
achieving
presence
Salience
+4
+4
+6
44 100
Emotional
Loyalty
TOM Un-aided Aided
23
Brand Engagement: Personal Care Shopping (2006)
FairPrice
Guardian
Sheng Siong
Recommenders
33
+2
6
-3
11 +3
Preferrers
35
-1
7
-2
12 +4
Dependables
37
-1
7
-3
10 +3
Regulars
Considerers
Trialists
Awareness
+5
58
73
48
-4
89
71
29
99
Too Hard to Get to
Unaided
27
16 +2
37
30 +4
-1
68
+2
Aided
Unaided
52
45
0
58
TOM: 6%
TOM: 40%
Non considerers
-5
28
+8
95 17
68
TOM: 7%
Aided
Unaided
70
86
+13
Aided
2
• Compared to Guardian,
Sheng Siong has4much lower base of 12
regular shoppers and a significantly
Not Aware
higher base
of recommenders
and preferrers,
reflecting relatively
1
14 weak behavioural loyalty and
5
relatively strong emotional loyalty.
• Sheng Siong appears to be on high trajectory. On a relatively small base there are big increases
at all levels of the loyalty pyramid. Take for instance that preferrers increased from 8 to 12%,
reflecting a massive 50% increase.
• Note also that Sheng Siong with only 17% unaided awareness is relatively unknown. The data
suggests that it is a small, growing banner that offers some distinct advantages over competing
stores. This is reflected in the high conversion from regular shoppers to dependables and
recommenders. (It’s not clear at this juncture as to what factors are driving this behaviour).
• FairPrice is exceptionally strong commanding 40% top-of-mind awareness and very high
behavioural and emotional loyalty.
Loyalty Matrix – Categorizing Brands (Banners)
Bonded
Reluctant
Attracted
Behavioural Loyalty
Hi
Tenuous
Lo
Lo
Brand Loyalty
Hi
29
Loyalty Matrix – FairPrice
Segmenting Customers
Hi
Core Customers
Behavioural Loyalty
Potential Loss
Tenuous
21%
Reluctant
10%
Bonded
37%
Attracted
5%
Potential Gain
?
Non-Considerers
27%
Lo
Lo
Brand Loyalty (attitudinal loyalty)
Hi
34
Loyalty Matrix – Sheng Siong
Segmenting Customers
Hi
Behavioural Loyalty
Core Customers
Lo
Potential Loss
Tenuous
2%
Reluctant
13%
Bonded
8%
Attracted
7%
Potential Gain
?
Non-Considerers
70%
Lo
Brand Loyalty (attitudinal loyalty)
Hi
35
Opportunity/Risk Analysis
35
Tenuous
Attracted
21
31
13
Threat
Opportunity
Who To
Defend
Against
Who To
Target
38
Segment Strategies
Reluctant
Monitor
What is
undermining
attraction?
Tenuous
Retention
What is
undermining
Equity? How to
preclude
defection?
Attracted
Bonded
Acquisition
Maintenance
What “hot
buttons” need to
be pressed to
attain them?
Reinforce,
reward and
retain.
To answer some of these questions we need to understand
what’s driving brand equity?
40
How can we measure
brand equity?
43
The outcomes of brand equity can
serve as a measures of brand equity






Loyal Customers
Charge a price premium
Trade co-operation
Brand extensions
Brand licensing
Communication messages get through
44
Simple approaches to measuring Brand Equity
Net Promoter Index
Net Advocacy Index

Index based on a single measure –
‘willingness to recommend’

Unsolicited consumer generated
media (CGM)

The number of people willing to
recommend your brand minus
those who are not willing to do so.

Sentiment analysis: NLP to assess
the positive / negative / neutrality
of the discussion
Scale
Promoters
Willingness to
recommend
(Scale of 1 to 10)
Detractors
10
9
8
7
6
5
4
3
2
1
0
NET
= Promoters - Detractors
% of Respondents Rating
Promoters
NET
Detractors
45
Measuring Brand Equity – the Nielsen Winning Brand’s Approach
Brand is said to command strong equity if it:
• is a favourite brand amongst consumers
• is a brand that consumers would recommend to their friends
• is a brand that consumers are willing to pay price premium
• (if consumers are willing to travel to secure this brand)
•
Brand Equity Index is calculated from analysis of a few key questions:
- % who claim that it is their favourite brand … F%
- % who say they will recommend the brand to somebody else … R%
- % who state they are willing to pay price premium … P%

Nielsen Brand Equity Index produces a weighted average score ranging from 0 - 10;
the higher the better.
Weights f, r, p are derived from factor analysis.
47
Nielsen’s Brand Equity Index
>
The Nielsen Brand Equity Index produces scores in range of 0 to 10; the higher the better.
>
Zero on this scale represents the lowest Index, meaning that a brand has no loyal customers,
and nobody would pay any more than the cheapest price on the market.
>
Ten would be the highest Index, where everybody in the market is a loyal customer, and
would willingly pay a significant price premium.
>
In competitive markets a score of 3+ is very strong.
0
No-one’s favorite
No-one recommends
No price premium
None willing to travel to buy
3
10
Everyone’s favorite
Everyone recommends
Price acceptable to all
All willing to travel to buy
52
Store Equity Index – Personal Care Shopping
FairPrice appeals more to older age groups while Watsons and
Guardian are preferred by younger age groups
Store Equity Index 2006
by demographics (Age and Income) for key chains
Age
15-24: 2.0
25-34: 2.6
35-39: 3.1
40-49: 4.0
50-65: 3.8
High – 3.4
Medium – 3.0
Low – 3.2
15-24:
25-34:
35-39:
40-49:
50-65:
4.3
2.5
1.9
1.8
1.3
High – 2.7
Medium – 2.5
Low – 1.4
15-24:
25-34:
35-39:
40-49:
50-65:
0.7
0.8
1.3
0.9
1.4
High – 0.5
Medium – 1.1
Low – 1.6
15-24:
25-34:
35-39:
40-49:
50-65:
1.3
1.2
0.8
0.7
0.7
High – 1.1
Medium – 1.0
Low – 0.7
15-24:
25-34:
35-39:
40-49:
50-65:
0.4
0.5
0.7
0.6
0.6
High – 0.6
Medium – 0.5
Low – 0.4
15-24:
25-34:
35-39:
40-49:
50-65:
0.5
0.4
0.6
0.6
0.6
High – 0.2
Medium – 0.6
Low – 0.7
Income
3.1
2.3
1.0
NTUC
FairPrice
Watsons
Sheng Siong
0.9
Guardian
0.5
0.5
Giant
Shop N Save
What’s driving
brand equity?
Awareness,
Consideration,
Imagery,
Attitudes
What’s in their
head determines
what drives equity
Drivers
of equity
How consumers
engage with brand
determines how
much equity exists
Recommenders
Preferrers
Equity Index
5.5
Dependables
Regulars
Considerers
2
2
2.5
Trialists
Aware
Brand 4 Brand 3 Brand 2 Brand 1
64

To understand what’s driving equity we need to determine what
people know and how it influences their purchasing decisions …
Awareness, Consideration, Imagery and Attitudes are
driving brand equity
Awareness,
interest,
consideration
Buzz, news,
gossip, rumours,
worries
The persona
that it exudes
Images,
symbols,
emotions
Benefits
and their
relevance
Popular,
fashionable,
prestigious
65
Product Attributes represent the perceived benefits, imagery,
symbolism, attitudes
(hypothetical example – personal care)
Feelings • Feel feminine
• Fashionable
• Feel beautiful
• Feel young
• Feel joyous
• Feel energetic &
lively
• Refreshing
Ingredients,
Health
• With natural
ingredients
• Healthy skin
Family Moisturizing
• Reliable and
trusted
• Down to earth
• Good value for
money
• Suitable for the
whole family
• Moisturizes
effectively
• Makes skin
soft and
smooth
• Nourishes
skin
• Gentle on
skin
Lather,
Fragrance
• Lot of lather
• Lingering
fragrance
• Like
fragrance
Brand Image Attributes
Factor analysis used to summarize 20 attributes into 5 factors
67
Illustration of Correlation
If the below pattern is observed across a large number of respondents, in that
case attributes 1 to 3 and 4 to 6 are said to be highly correlated.
Respondent Agreeing / Strongly Agreeing*:
Brand A
Brand B
Brand C
Brand D
Yes
Yes
No
No
Yes
Yes
No
No
Yes
Yes
No
No
4. Lot of lather
No
No
Yes
Yes
5. Lingering fragrance
No
No
Yes
Yes
6. Like fragrance
No
No
Yes
Yes
Factor 1
1. Feel feminine
2. Feel beautiful
3. Feel young
Factor 2
73
*Typically attribute rating is on 5 point rating scale . ‘Top-two’ box ratings (strongly agreeing,
agreeing) used for factor analysis.
Factor Analysis used to simplify data
a multivariate statistical technique that is used to summarize information contained
in a large number of variables into a smaller number of factors

Inter dependence technique … no dependent variable

Purpose – to simplify the data

Based on patterns in the data (attribute ratings), the technique
summarises many attributes into few factors
- Attributes that are highly correlated with each other are grouped
together under the same factor.
- Attributes that have low or zero correlation with each other fall
into different factors.

Factor loading is the correlation between attribute and factor.
Attributes with high loading help define the factor

Factor naming: Usually some consistency among attributes that
define a factor. Factor naming is a subjective process that
combines understanding of market with inspection of variables that
define the factor
78
Having measured brands’ Equity … it’s important to determine what’s driving it
Factors driving Brand Equity
18%
Consideration
Drivers of Brand Equity
15%
Awareness
19%
Feelings
18%
Ingredients, Health
14%
Family
10%
Moisturizing
6%
Lather, Fragrance
(personal care market)
Brand Equity Index
Output of Factor Analysis and Regression
The factors plus awareness and consideration,
are regressed to derive the importance or
contribution of each factor to brand equity
79
Importance of factors in driving
brand equity
Regression to derive factor importance
ƒ
,
,
,
…
…
The standardised coefficients ( , , …
obtained from the multiple regression yield the
importance of each factor in determining brand
equity
88
Brand Equity Model: How to determine the importance of the
drivers of brand equity
0.
1.
2.
3.
4.
Compute Brand Equity Index. (Based on % of
respondents that are emotionally loyal)
The large number of attributes are summarize into a
small number of factors using factor analysis
Equity index is regressed on
(i) factors obtained in step 1,
(ii) awareness (% spontaneous awareness) and
(iii) consideration (% who consider using)
The coefficients of the multiple linear regression in step 2
reflect the importance or contribution of each factor to
brand equity
The importance of the individual attributes is derived from
the factor weights and loading of the attributes on their
factor
89
Consideration connotes the presence of brand in
consumers’ repertoires

High consideration score means:
- Habit is a key driver of differentiation between brands …
consumers have made up their minds
- Consideration is also high if the inertia to move from one product
offering to another is high. (Usually so with retail banking)
- It also usually means that consumers’ repertoire of brands is limited
- to change habits marketers will have to give people new reasons to
switch
 Need to trigger trial and retention … persuasion
 Advertising, In-store media and packaging to draw attention
 Distribution to ensure availability and visibility
- Where consideration has strong bearing on equity we may find
brands with high % of tenuous consumers. (Behavioural loyalty is high
due to inertia or prior habits, yet emotional loyalty may be lacking)
90
Awareness reflects familiarity, interest and knowledge of
brand … usually a prerequisite for consideration / trial
Top of Mind
Pantene
Top of Mind
Dove
12
Organics
Vidal Sassoon
13
7
Spontaneous 73
Total
100
98
25
21
2
35
Total
35
8
Head &
Shoulders
Elseve
Spontaneous
98
49
95
85
19
84
92
Attribute Importance: Relative importance of each attribute in driving equity
obtained from factor weights and loading of the attributed on their factor
Example:
Personal Care
Feel beautiful
0.37
Moisturizes effectively
0.36
Feel feminine
0.33
Healthy skin
0.32
With natural ingredients
0.32
Fashionable
0.30
Feel young
0.30
Nourishes skin
0.28
Reliable and trusted
0.27
Good value for money
0.27
Feel energetic and lively
0.23
Makes skin soft, smooth
0.20
Gentle on skin
0.18
Feel joyous
0.15
Refreshing
0.15
Lingering fragrance
0.14
Suitable for whole family
Like fragrance
Lot of lather
Down to earth
0.12
0.09
0.07
0.06
93
Bank Profiles
Strengths - Bank National: Service; El Dorado: Competiveness; Bank of Columbia: Efficiency
Accessibility
National
Branch Close to Home / Office
Convenient ATM locations
Superior i‐Banking facilities -10
Efficient Teller counters -13
Efficiency
Low Waiting time at ATM -11
Customer Hotline ‐ Low Hold Time -15
Good customer Service
Service
Good Customer Care
Personalised Service
-7
CompetencyKnowledge of Bank's Services
of ManagerMarket Knowledge / Expertise
-3
One Stop Bank
Range of
Service
Wide Range of Credit Cards
-6
Wide Range of Mortgage Packages
Wide Variety of Insurance Plans
-3
Good Range of Treasury Services
-3
Wide Variety of Loans
-7
Lowest Mortgage Interest Rates
Competitiveness
Best Loan Rates
High Fixed Deposits Interest Rates
High Return on Investment Products
Attractive Loyalty / Rewards Program
-1
15
Joka
El Dorado
15
-8
-1
9
-11
20
-8
9
-19
22
-3
3
12
7
27
11
-15
-3
-4
4
4
18
3
20
-28
13 -17
-2
3
-1
-16
-6
1
15
16
7
1
34
17
-16
3
-3
-6
9
3
-1
5
0
-5
-4
-12
9
1
1
9
-18
6
-3
-9
1
6
0
3
7
7
4
-1
1
2
15
4
-14
2
7
-1
-8
-3
-1
5
8
-7
-7
0
9
-1
7
10
Columbia
8
-15
-25
2
Lena
-17
-3
-18
4
6
-31
99
Example Personal Care Shopping: Image rating comparison across banners
In Personal Care, Watsons maintains a strong lead on low prices, attractive promotions and
VFM. Guardian leads on Health and Staff (advise). Unity not perceived as specialist … not
even in health care
Personal Care: Image Profile Analysis
Relative Importance
Most
Least
Staff provides good advice on
health/pharmaceutical products
Watsons
Convenient to get to
100
Good range of healthcare products
Guardian
Is close to home
Unity
Healthcare
Low prices
75
Clean and hygienic store
Good value for money
50
Provides their own brands of health and
beauty products which are a good
alternative to the main brands
Modern, comfortable store
Efficient checkout counters
So that comparisons
can be made, the data
in these
spider charts
Good range of cosmetics products
is based on
respondents who shop
regularly at Well
the presented
outlet. display of products
25
0
Attractive and interesting promotions
Staff provide good service
Easy to find products
Always have what I want in stock
Better selection of high quality
products
Good range of skincare products
Wide product range and variety
Good range of hair care products
Base = Respondents who shop regularly at the outlet
106
Performance = %
top two boxes out of
5 scale
Example Food and Grocery Shopping: Image rating profile analysis
FairPrice leads other supermarkets on key attributes … but Cold Storage is ahead on
the “extras”
Food & Grocery: Image Profile Analysis
Fair Price
Relative Importance
Most
Shop N Save
Cold Storage
Least
Convenient to get to
100
Good range of fresh products
Is close to home
High quality fresh food
Good value for money
75
Ease of parking
Easy to find products
50
Spacious
Has own brands of groceries
25
Good quality instant cooked foods
What course of
action should
0
Cold Storage
take?
Efficient checkout counters
Wide product range and variety
Modern, comfortable store
Clean and hygienic store
Better selection of quality products
Base = Respondents who shop regularly at the outlet
Staff provide good service
Low prices for most items
Attractive and interesting
promotions
Everything I need in the one shop
Always have what I want in stock
Well presented display of products
107
Performance = %
top two boxes out of
5 scale
Brand Equity Model - Summary
Drivers
Outcomes
Awareness
Consideration
Brand Loyalty
Factor 1
Factor 2
Brand
Equity
Price Premium
Factor 3
Factor 4
120
Modelling Brand Equity

Brand Equity models deliver an understanding of
- Interaction: How strong is the brand’s relationship
with consumers?
 What’s the brand’s ability to retain its consumers along
each stage of their decision making process
- What is the brand’s equity?
 How does it compare with other brands
 How has it changed over time
- What are the key drivers of brand equity?
- How can we strengthen the brand’s equity?
- How to strengthen the brand’s interaction with
consumers?
121
123