Refer back to the brand chosen for the Week 1 assignment based on Samsung.Conduct a brand audit for the brand using the Rolex Brand Audit as a guide from Ch. 8.Create a 10- to 12-slide Microsoft® PowerPoint® presentation with speaker notes to deliver your brand audit.Include the following:BackgroundBrand InventoryBrand ExploratoryStrategic RecommendationsTactical RecommendationsCite all sources according to APA formatting guidelines.Click on the Assignment Files tab to submit your assignment.the product for the assignment is Samsung. The grading guide and chapter 8 are attached for reference.
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8 Developing a Brand Equity Measurement and Management System
Learning Objectives
After reading this chapter, you should be able to
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1. Describe the new accountability in terms of ROMI.
2. Outline the two steps in conducting a brand audit.
3. Describe how to design, conduct, and interpret a tracking study.
4. Identify the steps in implementing a brand equity management system.
Marketers must adopt research methods and procedures so they understand when, where, how, and why consumers buy.
Source: David Noton Photography/Alamy
Preview
The previous six chapters, which made up Parts II and III of the text, described various strategies and approaches to building brand
equity. In the next three chapters, which make up Part IV, we take a detailed look at what consumers know and feel about and act
toward brands and how marketers can develop measurement procedures to assess how well their brands are doing.
The customer-based brand equity (CBBE) concept provides guidance about how we can measure brand equity. Given that customerbased brand equity is the differential effect that knowledge about the brand has on customer response to the marketing of that brand,
two basic approaches to measuring brand equity present themselves. An indirect approach can assess potential sources of customerbased brand equity by identifying and tracking consumers’ brand knowledge—all the thoughts, feelings, images, perceptions, and
beliefs linked to the brand. A direct approach, on the other hand, can assess the actual impact of brand knowledge on consumer
response to different aspects of the marketing program.
The two approaches are complementary, and marketers can and should use both. In other words, for brand equity to provide a useful
strategic function and guide marketing decisions, marketers must fully understand the sources of brand equity, how they affect
outcomes of interest such as sales, and how these sources and outcomes change, if at all, over time. Chapter 3 provided a framework
for conceptualizing consumers’ brand knowledge structures. Chapter 9 uses this information and reviews research methods to
measure sources of brand equity and the customer mind-set. Chapter 10 reviews research methods to measure outcomes, that is, the
various benefits that may result from creating these sources of brand equity.
Before we get into specifics of measurement, this chapter offers some big-picture perspectives of how to think about brand equity
measurement and management. Specifically, we’ll consider how to develop and implement a brand equity measurement system. A
brand equity measurement system is a set of research procedures designed to provide marketers with timely, accurate, and actionable
information about brands so they can make the best possible tactical decisions in the short run and strategic decisions in the long run.
The goal is to achieve a full understanding of the sources and outcomes of brand equity and to be able to relate the two as much as
possible.
The ideal brand equity measurement system would provide complete, up-to-date, and relevant information about the brand and its
competitors to the right decision makers at the right time within the organization. After providing some context about the heightened
need for marketing accountability, we’ll look in detail at three steps toward achieving that ideal—conducting brand audits, designing
brand tracking studies, and establishing a brand equity management system.
THE NEW ACCOUNTABILITY
Although senior managers at many firms have embraced the marketing concept and the importance of brands, they often struggle with
questions such as: How strong is our brand? How can we ensure that our marketing activities create value? How do we measure that
value?
Virtually every marketing dollar spent today must be justified as both effective and efficient in terms of return of marketing
investment (ROMI).1 This increased accountability has forced marketers to address tough challenges and develop new measurement
approaches.
Complicating matters is that, depending on the particular industry or category, some observers believe up to 70 percent (or even more)
of marketing expenditures may be devoted to programs and activities that improve brand equity but cannot be linked to short-term
incremental profits.2 Measuring the long-term value of marketing in terms of both its full short-term and long-term impact on
consumers is thus crucial for accurately assessing return on investment.
Clearly marketers need new tools and procedures that clarify and justify the value of their expenditures, beyond ROMI measures tied
to short-term changes in sales. In Chapter 3, we introduced the brand resonance model and brand value chain, structured means to
understand how consumers build strong bonds with brands and how marketers can assess the success of their branding efforts. In the
remainder of this chapter, we offer several additional concepts and perspectives to help in that pursuit.
CONDUCTING BRAND AUDITS
To learn how consumers think, feel, and act toward brands and products so the company can make informed strategic positioning
decisions, marketers should first conduct a brand audit. A brand audit is a comprehensive examination of a brand to discover its
sources of brand equity. In accounting, an audit is a systematic inspection by an outside firm of accounting records including analyses,
tests, and confirmations.3 The outcome is an assessment of the firm’s financial health in the form of a report.
A similar concept has been suggested for marketing. A marketing audit is a “comprehensive, systematic, independent, and periodic
examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view of
determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance.”4
The process is a three-step procedure in which the first step is agreement on objectives, scope, and approach; the second is data
collection; and the third and final step is report preparation and presentation. This is an internally, company-focused exercise to make
sure marketing operations are efficient and effective.
A brand audit, on the other hand, is a more externally, consumer-focused exercise to assess the health of the brand, uncover its sources
of brand equity, and suggest ways to improve and leverage its equity. A brand audit requires understanding the sources of brand equity
from the perspective of both the firm and the consumer. From the perspective of the firm, what products and services are currently
being offered to consumers, and how they are being marketed and branded? From the perspective of the consumer, what deeply held
perceptions and beliefs create the true meaning of brands and products?
The brand audit can set strategic direction for the brand, and management should conduct one whenever important shifts in strategic
direction are likely.5 Are the current sources of brand equity satisfactory? Do certain brand associations need to be added, subtracted,
or just strengthened? What brand opportunities exist and what potential challenges exist for brand equity? With answers to these
questions, management can put a marketing program into place to maximize sales and long-term brand equity.
Conducting brand audits on a regular basis, such as during the annual planning cycle, allows marketers to keep their fingers on the
pulse of their brands. Brand audits are thus particularly useful background for managers as they set up their marketing plans and can
have profound implications on brands’ strategic direction and resulting performance.
DOMINO’S PIZZA
In late 2009, Domino’s was a struggling business in a declining market. Pizza sales were slumping as consumers defected to healthier
and fresher dining options at one end or to less expensive burger or sandwich options at the other end. Caught in the middle, Domino’s
also found its heritage in “speed” and “best in delivery” becoming less important; even worse, it was undermining consumer’s
perceptions of the brand’s taste, the number-one driver of choice in the pizza category. To address the problem, Domino’s decided to
conduct a detailed brand audit with extensive qualitative and quantitative research. Surveys, focus groups, intercept interviews, social
media conversations, and ethnographic research generated a number of key insights. The taste problem was severe—some consumers
bluntly said that Domino’s tasted more like the box than the pizza. Research also revealed that consumers felt betrayed by a company
they felt they no longer knew. A focus on impersonal, efficient service meant that in consumers’ minds, there was no Domino’s
kitchens, no chefs, not even ingredients. Consumers were skeptical of “new and improved” claims and felt companies never admitted
they were wrong. Based on these and other insights, Domino’s began its brand comeback. Step one—new recipes for crust, sauce, and
cheese that resulted in substantially better taste-test scores. Next, Domino’s decided not to run from criticism and launched the “Oh
Yes We Did” campaign. Using traditional TV and print media and extensive online components, the company made clear that it had
listened and responded by creating a better pizza. Documentary-type filming showed Domino’s CEO and other executives observing
the original consumer research and describing how they took it to heart. Surprise visits were made to harsh critics from the focus
groups, who tried the new pizza on camera and enthusiastically praised it. Domino’s authentic, genuine approach paid off. Consumer
perceptions dramatically improved and growth in sales in 2010 far exceeded the competitors’.6
A thorough, insightful brand audit helped to convince Domino’s they needed to confront their perceived flaws head on.
Source: Domino’s Pizza LLC
The brand audit consists of two steps: the brand inventory and the brand exploratory. We’ll discuss each in turn. Brand Focus 8.0
illustrates a sample brand audit using the Rolex brand as an example.
Brand Inventory
The purpose of the brand inventory is to provide a current, comprehensive profile of how all the products and services sold by a
company are marketed and branded. Profiling each product or service requires marketers to catalogue the following in both visual and
written form for each product or service sold: the names, logos, symbols, characters, packaging, slogans, or other trademarks used; the
inherent product attributes or characteristics of the brand; the pricing, communications, and distribution policies; and any other
relevant marketing activity related to the brand.
FIGURE 8-1 Red Hat Brand Wall
Source: Photo courtesy of Red Hat, Inc.
Often firms set up a “war room” where all the various marketing activities and programs can be displayed or accessed. Visual and
verbal information help to provide a clearer picture. Figure 8-1 shows a wall that software pioneer Red Hat created of all its various
ads, brochures, and other marketing materials. Managers were pleasantly surprised when they saw how consistent all the various items
were in form, look, and content, although they were left scratching their heads as to why the Red Hat office in Australia had created
branded underwear as a promotional gift. Needless to say, the “tighty whities” were dropped after being deemed off-brand.7
The outcome of the brand inventory should be an accurate, comprehensive, and up-to-date profile of how all the products and services
are branded in terms of which brand elements are employed and how, and the nature of the supporting marketing program. Marketers
should also profile competitive brands in as much detail as possible to determine points-of-parity and points-of-difference.
Rationale.
The brand inventory is a valuable first step for several reasons. First, it helps to suggest what consumers’ current perceptions may be
based on. Consumer associations are typically rooted in the intended meaning of the brand elements attached to them—but not always.
The brand inventory therefore provides useful information for interpreting follow-up research such as the brand exploratory we
discuss next.
Although the brand inventory is primarily a descriptive exercise, it can supply some useful analysis too, and initial insights into how
brand equity may be better managed. For example, marketers can assess the consistency of all the different products or services
sharing a brand name. Are the different brand elements used on a consistent basis, or are there many different versions of the brand
name, logo, and so forth for the same product—perhaps for no obvious reason—depending on which geographic market it is being
sold in, which market segment it is being targeted to, and so forth? Similarly, are the supporting marketing programs logical and
consistent across related brands?
As firms expand their products geographically and extend them into other categories, deviations—sometimes significant in nature—
commonly emerge in brand appearance and marketing. A thorough brand inventory should be able to reveal the extent of brand
consistency. At the same time, a brand inventory can reveal a lack of perceived differences among different products sharing the brand
name—for example, as a result of line extensions—that are designed to differ on one or more key dimensions. Creating sub-brands
with distinct positions is often a marketing priority, and a brand inventory may help to uncover undesirable redundancy and overlap
that could lead to consumer confusion or retailer resistance.
Brand Exploratory
Although the supply-side view revealed by the brand inventory is useful, actual consumer perceptions, of course, may not necessarily
reflect those the marketer intended. Thus, the second step of the brand audit is to provide detailed information about what consumers
actually think of the brand by means of the brand exploratory. The brand exploratory is research directed to understanding what
consumers think and feel about the brand and act toward it in order to better understand sources of brand equity as well as any possible
barriers.
Preliminary Activities.
Several preliminary activities are useful for the brand exploratory. First, in many cases, a number of prior research studies may exist
and be relevant. It is important to dig through company archives to uncover reports that may have been buried, and perhaps even long
forgotten, but that contain insights and answers to a number of important questions or suggest new questions that may still need to be
posed.
Second, it is also useful to interview internal personnel to gain an understanding of their beliefs about consumer perceptions for the
brand and competitive brands. Past and current marketing managers may be able to share some wisdom not necessarily captured in
prior research reports. The diversity of opinion that typically emerges from these internal interviews serves several functions,
increasing the likelihood that useful insights or ideas will be generated, as well as pointing out any inconsistencies or misconceptions
that may exist internally for the brand.
Although these preliminary activities are useful, additional research is often required to better understand how customers shop for and
use different brands and what they think and feel about them. To allow marketers to cover a broad range of issues and to pursue some
in greater depth, the brand exploratory often employs qualitative research techniques as a first step, as summarized in Figure 8-2,
followed by more focused and definitive survey-based quantitative research.
FIGURE 8-2 Summary of Qualitative Techniques
Interpreting Qualitative Research.
There are a wide variety of qualitative research techniques. Marketers must carefully consider which ones to employ.
Criteria.
Levy identifies three criteria by which we can classify and judge any qualitative research technique: direction, depth, and diversity.8
For example, any projective research technique varies in terms of the nature of the stimulus information (is it related to the person or
the brand?), the extent to which responses are superficial and concrete as opposed to deeper and more abstract (and thus requiring
more interpretation), and the way the information relates to information gathered by other projective techniques.
In Figure 8-2, the tasks at the top of the left-hand list ask very specific questions whose answers may be easier to interpret. The tasks
on the bottom of the list ask questions that are much richer but also harder to interpret. Tasks on the top of the right-hand list are
elaborate exercises that consumers undertake themselves and that may be either specific or broadly directed. Tasks at the bottom of
the right-hand list consist of direct observation of consumers as they engage in various behaviors.
According to Levy, the more specific the question, the narrower the range of information given by the respondent. When the stimulus
information in the question is open-ended and responses are freer or less constrained, the respondent tends to give more information.
The more abstract and symbolic the research technique, however, the more important it is to follow up with probes and other questions
that explicitly reveal the motivation and reasons behind consumers’ responses.
Ideally, qualitative research conducted as part of the brand exploratory should vary in direction and depth as well as in technique. The
challenge is to provide accurate interpretation—going beyond what consumers explicitly state to determine what they implicitly mean.
Chapter 9 reviews how to best conduct qualitative research.
Mental Maps and Core Brand Associations.
One useful outcome of qualitative research is a mental map. A mental map accurately portrays in detail all salient brand associations
and responses for a particular target market. One of the simplest means to get consumers to create a mental map is to ask them for
their top-of-mind brand associations (“When you think of this brand, what comes to mind?”). The brand resonance pyramid from
Chapter 3 helps to highlight some of the types of associations and responses that may emerge from the creation of a mental map.
It is sometimes useful to group brand associations into related categories with descriptive labels. Core brand associations are those
abstract associations (attributes and benefits) that characterize the 5–10 most important aspects or dimensions of a brand. They can
serve as the basis of brand positioning in terms of how they create points-of-parity and points-of-difference. For example, in response
to a Nike brand probe, consumers may list LeBron James, Tiger Woods, Roger Federer, or Lance Armstrong, whom we could call
“top athletes.” The challenge is to include all relevant associations while making sure each is as distinct as possible. Figure 8-3
displays a hypothetical mental map and some core brand associations for MTV.
Figure 8-3a Classic MTV Mental Map
Source: MTV logo, MCT/Newscom
Figure 8-3b Possible MTV Core Brand Associations
A related methodology, brand concept maps (BCM), elicits brand association networks (brand maps) from consumers and aggregates
individual maps into a consensus map.9 This approach structures the brand elicitation stage of identifying brand associations by
providing survey respondents with a set of brand associations used in the mapping stage. The mapping stage is also structured and has
respondents use the provided set of brand associations to build an individual brand map that shows how brand associations are linked
to each other and to the brand, as well as how strong these linkages are. Finally, the aggregation stage is also structured and analyzes
individual brand maps step by step, uncovering the common thinking involved. Figure 8-4 …
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