Measuring and Managing Brand Equity Zou Deqiang, Ph. D School of Management, Fudan University May7,2008
1 Measuring and Measuring and Managing Brand Managing Brand Equity Zou Deqiang, Ph.D. School of Management, Fudan University May 7, 2008
Brand Equity: Differential Response Taste perceptions of six beer brands when the drinker does NoT know what he/she is drinking Pabst Budweiser Colt 45 Guinness Miller Lite Coors O Copy rights reserved, Zou Deqiang
2 2 © Copy rights reserved, Zou Deqiang Brand Equity: Differential Response • Taste perceptions of six beer brands when the drinker does NOT know what he/she is drinking
Brand Equity: Differential Response Taste perceptions of six beer brands when the drinker knows what he/she is drinking Colt 45 Pabst oors Guinness Miller Lite Budweiser O Copy rights reserved, Zou Deqiang
3 3 © Copy rights reserved, Zou Deqiang Brand Equity: Differential Response • Taste perceptions of six beer brands when the drinker knows what he/she is drinking
Brand Equity: Different Perspectives Cognitive psychology(associative network memory model): strong, favorable, and unique brand associations as nodes of a network in consumer memory to be activated by some stimuli Information economics: brand as a cognitive short-cut or decision heuristic for consumers to reduce perceived risk Social relationship: brand is the bridge connecting brand and its consumers as if such relationship was interpersonal relationship Choudhary, Nichiketa(2008), "People Buy Brands Like They Make Friends brandchannel. com. May 5 Issue ID Branding(2008), Give Them Something to Believe In: The Value of Brand Culture O Copy rights reserved, Zou Deqiang
4 4 © Copy rights reserved, Zou Deqiang Brand Equity: Different Perspectives • Cognitive psychology (associative network memory model): strong, favorable, and unique brand associations as nodes of a network in consumer memory to be activated by some stimuli • Information economics: brand as a cognitive short-cut or decision heuristic for consumers to reduce perceived risk • Social relationship: brand is the bridge connecting brand and its consumers as if such relationship was interpersonal relationship Choudhary, Nichiketa (2008), “People Buy Brands Like They Make Friends,” brandchannel.com, May 5 Issue. ID Branding (2008), Give Them Something to Believe In: The Value of Brand Culture Choudhary, Nichiketa (2008), “People Buy Brands Like They Make Friends,” brandchannel.com, May 5 Issue. ID Branding (2008), Give Them Something to Believe In: The Value of Brand Culture
The Fact Brands are fiendishly complicated, elusive slippery, half real/half-virtual things. When CEOs try to think about brands their brains hurt Jeremy, Bullmore WPP Group O Copy rights reserved, Zou Deqiang
5 5 © Copy rights reserved, Zou Deqiang The Fact • “Brands are fiendishly complicated, elusive, slippery, half real/half-virtual things. When CEOs try to think about brands their brains hurt.” Jeremy, Bullmore WPP Group
What matters to CMo 100 Brand(s) 79 New product Meaningful customer insights New technology ith less s Applying new marketing approaches Source:McKinsey&Co, MSI Spring Trusfoes Meeting, April 16, 2004
6 What matters to CMO
The New Accountability Virtually every marketing dollar spent today must be justified as both effective and efficient in terms of " return of marketing investment'" (ROMD) Some observers believe that up to 70%(or even more) 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 7 O Copy rights reserved, Zou Deqiang
7 7 © Copy rights reserved, Zou Deqiang The New Accountability • Virtually every marketing dollar spent today must be justified as both effective and 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 and activities that cannot be linked to short-term incremental profits, but yet can be seen as improving brand equity
The Harsh Realities of Brand-building 23% Marketing budgets are often the first to come under scrutiny in times of 18% economic pressure Brand building often viewed as an advertising expense 13% 9% 8% Marketing T R&D Information Advertising Resources Technolo
8 The Harsh Realities of Brand-building
The Cruel Fact If marketers want to behave like they are the guardians of a brand and a brand is an opportunity to generate cash, they will have to get a grip on how brands generate cash Stuart Whitwell, Managing Director, Intangible Business Financial Times, August 31, 2004 9 O Copy rights reserved, Zou Deqiang
9 9 © Copy rights reserved, Zou Deqiang The Cruel Fact • “If marketers want to behave like they are the guardians of a brand and a brand is an opportunity to generate cash, they will have to get a grip on how brands generate cash.” Stuart Whitwell, Managing Director, Intangible Business Financial Times, August 31, 2004
2007 2006 Country Sector 2007 Brand Change in R of origin Value (Sm) brand value Coca-cola Beverages 65,324 Microsof Computer Software 58,709 Computer Services 57.091 830 Diversified 51.569 Noki NOKIA Finland Consumer Electronics 33,696 12% Toyota Automoti 32070 Computer Hardware 30.954 McDonald's Restaurants 9398 8 Disney 欢⑦ 29,210 Mercedes Germany Automotive 23,568
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