8.1

CHAPTER 8:CHAPTER 8: DEVELOPING A BRAND EQUITY DEVELOPING A BRAND EQUITY

MEASUREMENT AND MANAGEMENT MEASUREMENT AND MANAGEMENT SYSTEMSYSTEM

Kevin Lane KellerKevin Lane KellerTuck School of BusinessTuck School of Business

Dartmouth CollegeDartmouth College

8.2

The New AccountabilityThe New Accountability Virtually every marketing dollar spent Virtually every marketing dollar spent

today must be justified as both effective today must be justified as both effective and efficient in terms of “return of and efficient in terms of “return of marketing investment” (ROMI). marketing investment” (ROMI).

Some observers believe that up to 70% Some observers believe that up to 70% (or even more) of marketing expenditures (or even more) of marketing expenditures may be devoted to programs and may be devoted to programs and activities that cannot be linked to short-activities that cannot be linked to short-term incremental profits, but yet can be term incremental profits, but yet can be seen as improving brand equity. seen as improving brand equity.

8.3

Brand Equity Measurement Brand Equity Measurement SystemSystem

A set of research procedures that is A set of research procedures that is designed to provide timely, designed to provide timely, accurate, and actionable information accurate, and actionable information for marketers so that they can make for marketers so that they can make the best possible tactical decisions in the best possible tactical decisions in the short run and strategic decisions the short run and strategic decisions in the long runin the long run

8.4

Brand Equity Measurement Brand Equity Measurement SystemSystem

Conducting brand auditsConducting brand audits Developing tracking proceduresDeveloping tracking procedures Designing a brand equity Designing a brand equity

management systemmanagement system

Brand AuditBrand Audit External, consumer-focused exercise to assess External, consumer-focused exercise to assess

the health of the brandthe health of the brand It uncovers the source of brand equity and It uncovers the source of brand equity and

suggest way(s) to leverage its equitysuggest way(s) to leverage its equity Some questions need to be answered by brand Some questions need to be answered by brand

audit:audit: Are the current brand sources satisfactory?Are the current brand sources satisfactory? Do certain brand association need to be added? Do certain brand association need to be added?

substracted/strengthened?substracted/strengthened? What brand opportunities exist (e.g. brand extension)What brand opportunities exist (e.g. brand extension)

8.5

Two steps of Brand AuditTwo steps of Brand Audit Brand inventoryBrand inventory Brand exploratoryBrand exploratory

Qualitative researchQualitative research Quantitative researchQuantitative research

8.6

8.7

Designing Brand Tracking Designing Brand Tracking StudiesStudies

Tracking studies involve information Tracking studies involve information collected from consumers on a collected from consumers on a routine basis over timeroutine basis over time Often done on a “continuous” basisOften done on a “continuous” basis Provide descriptive and diagnostic Provide descriptive and diagnostic

informationinformation

8.8

What to TrackWhat to Track

Customize tracking surveys to Customize tracking surveys to address the specific issues faced by address the specific issues faced by the brandthe brand

Product-brand trackingProduct-brand tracking Corporate or family brand trackingCorporate or family brand tracking Global trackingGlobal tracking

8.9

How to Conduct Tracking How to Conduct Tracking StudiesStudies

Who to track (target market)Who to track (target market) When and where to track (how When and where to track (how

frequently)frequently) How to interpret brand trackingHow to interpret brand tracking

8.10

Brand Equity Management Brand Equity Management SystemSystem

A A brand equity management systembrand equity management system is a set of organizational processes is a set of organizational processes designed to improve the designed to improve the understanding and use of the brand understanding and use of the brand equity concept within a firm:equity concept within a firm: Brand equity charterBrand equity charter Brand equity reportBrand equity report Brand equity responsibilitiesBrand equity responsibilities

8.11

Brand Equity CharterBrand Equity Charter Provides general guidelines to Provides general guidelines to

marketing managers within the marketing managers within the company as well as key marketing company as well as key marketing partners outside the companypartners outside the company

Should be updated annuallyShould be updated annually

8.12

Brand Equity Charter Brand Equity Charter ComponentsComponents

Define the firm’s view of the brand equityDefine the firm’s view of the brand equity Describe the scope of the key brandsDescribe the scope of the key brands Specify actual and desired equity for the brandSpecify actual and desired equity for the brand Explain how brand equity is measuredExplain how brand equity is measured Suggest how brand equity should be measuredSuggest how brand equity should be measured Outline how marketing programs should be Outline how marketing programs should be

deviseddevised Specify the proper treatment for the brand in Specify the proper treatment for the brand in

terms of trademark usage, packaging, and terms of trademark usage, packaging, and communicationcommunication

8.13

The Knicks The Fans

The Knicks Brand CharterThe Knicks Brand Charter

Emotional Bond•Uniquely authentic•An incomparable event, scene and energy•Relentless, resourceful, and tough•Championship caliber•A vital part of New York City•Unlimited in its possibilities

•Sensory fulfillment–Looks, feels, and sounds•Visceral thrill– Eager anticipation/excitement– War: winning/losing•Psychological benefits– Personal identification (with heroes)– Social currency/belonging•Emotional awards– Intense experience– Childhood– Sustaining– Exceeds

An intensely passionate, professional, unparalleled New York City experience

8.14

Brand Equity ReportBrand Equity Report Assembles the results of the tracking Assembles the results of the tracking

survey and other relevant survey and other relevant performance measuresperformance measures

To be developed monthly, quarterly, To be developed monthly, quarterly, or annuallyor annually

Provides descriptive information as Provides descriptive information as to what is happening with the brand to what is happening with the brand as well as diagnostic information on as well as diagnostic information on why it is happening why it is happening

8.15

Brand Equity Brand Equity ResponsibilitiesResponsibilities

Organizational responsibilities and Organizational responsibilities and processes that aim to maximize long-processes that aim to maximize long-term brand equityterm brand equity

Establish position of VP or Director of Equity Establish position of VP or Director of Equity Management to oversee implementation of Management to oversee implementation of Brand Equity Charter and ReportsBrand Equity Charter and Reports

Ensure that, as much as possible, Ensure that, as much as possible, marketing of the brand is done in a marketing of the brand is done in a way that reflects the spirit of the way that reflects the spirit of the charter and the substance of the reportcharter and the substance of the report