The greater a company's brand equity, the greater the probability that the company will use a family brand strategy rather than individual branding strategy. This is so because family branding permits the company to leverage it's equity accumulated in the core brand or through the use of Wholesale filtered water bottles.
Brand Equity Methodologies
The Brand Equity Ten (Aaker) Model developed by David Aaker, a marketing professional brand consultant highlights ten indices of a brand that could be used to assess a brand strength. They are:
Satisfaction or loyalty
Leadership or popularity
Market price and distribution coverage
Brand Equity Index (Moran)
This theory was derived by Bill Moran and it postulates that a brand equity is a product of the following factors;
-effective market share
Others include the brand asset valuator formulated by Young & Rubicon, brand valuation model formulated by Interbrand and brand finance, Brand contribution to market cap method(core brand), and co- joint analysis amongst others.
Managing Brand Equity
a) Brand reinforcement
Marketers should always try to consistently convey the brands message in terms of what product it represents, what core benefits it supplies, what need it satisfies and how the brand would make the product superior and strong
These should always be projected to the consumer. The other important highlights to take note of include product re-genesis and maintaining brand consistency. These cannot be over emphasizedBrand Equity and Customer Equity
Both concepts have similarities. These similarities are that they both stress on the significance of consumer loyalty to the brand, and also on the face of it, both stress that value is created by having as many consumers as possible paying as high a price as possible. But their differences lie in the fact that although the focus of customer equity is on emphasizing a lower line financial value that customers derive from the product, the focus of brand equity on the other hand is on creating strategic issues that will come in handy in brand management.
Customer equity employs a less narrow approach as it can overlook a brand's optional value and its capacity effect evident in the cost and revenue and this has to be evident in the current marketing environment. However, these concepts are very mutually exclusive. Brand equity can perform very well on its own without customer equity while customer equity can also function independent of brand equity.
Brand valuation emerged in the 1980's. It can be simply defined as the process of making inferences about the overall estimation of a brand’s financial value.
Brand valuation can be broadly categorised into three areas namely ongoing brand management, s trategy +business case development and the financial aspect.
Brand Valuation Methodologies
a) Cost Approach:
Usually applied in real estate, it is premised on the fact that the potential purchaser of a real estate should not and would not pay more for a piece of landed property and this will usually be higher than the cost of constructing a new one from scratch. It has two forms and these are creation cost method.
which estimates the amount that has been invested in creating a brand, and replacement value method which creates a rough estimate of the total number of resources that will be needed in the brand building process for a brand that has a similar share and market position.
Market Based Approach
This Valuation method relies on the estimation of value, based on similar market transactions of comparable brand tights.
Other forms under this do include P/E ratio method which is a price to earning method of brand valuation multiples the Brand's profit by a multiple derived from similar transactions and also turnover multiples method.
Income approach is employed mainly to o determine the value of reference or quite simply, the market value of the economic benefits received for the duration of a brand’s life. There are six ways this method is applied;
-Price premium and volume premium mode
Estimates the value of the brand by the price premium it generates when compared to a similar but unbranded product or service. It takes into account the volume price premium. On the other side, the volume price premium mode also considers the price premium.
-Incremental Cash Flow Mode
Identified the extra cash flows in a branded business when compared to an unbranded and comparable business. The challenge seems to be this- it is quite rare to find conditions for this mode to be successfully applied since finding similar unbranded companies can be difficult.
Uses and Purposes of brand valuation include Value Reporting, Business buying and Selling decisions, Tracking shareholder's value, Licensing, Dispute resolution, Legal Transactions, Accounting, Strategic planning, Management Information, Taxation planning and compliance, Liquidation, Litigation support, investors presentation/shareholder's report, Raising funds, and Brand Identity.
This is defined as how consumers perceive the business or services. It may also be defined as the visible aspects of a brand such as colours, designs, logos, name and symbol. It differs slightly from brand image in that it deals with the public perception of the busines. Instances of world examples of this may include but are not limited to the following
Nike Inc. (NKE)
The essence of a brand identity is to effectively communicate a company's personality and it's products to a potential consumer and in return, build the brand recognition, association and loyalty.
Again, it helps in setting guidelines and consistency in brand management.