Tuesday, April 1, 2008

Brand Equity Unfolded

In the last post we have seen a general definition for ‘Brand Equity’. Once that has been understood, now it is time to look at what Brand Equity technically means.
The Equity of any Brand can be said to be made up of two components:
1. Brand Stature
2. Brand Strength

Brand Stature is nothing but a report card of the brand, i.e. an indicator of what the brand has been and its effect and relationship with various stakeholders till now.

Brand Strength, unlike Brand Stature, is not a lagging indicator. It is a leading indicator. It is made up of those elements that tend to tell us what is the brand potential and how differentiated and relevant it is going to be in times to come.
Therefore, if one looks in terms of time, Brand Equity covers the past, present and the future strength of a brand.The figure below shows how the equity of a brand can be plotted on a grid. The Stature is taken on the x-axis while the Strength on the y-axis.

There are a number of models that are used for Brand Equity, and all of them come up with different factors on which the equity depends. But whether it be factors taken in the Aaker’s Model, in Young and Rubicam’s (Y&R) Model, or any other model, all the factors can be placed either under Brand Stature or under Brand Strength.

For example, in Y&R’s Model called the Brand Asset Valuator (BAV), four key dimensions (factors) of Brand Equity are:

1. Differentiation: Perceived Distinctiveness
2. Relevance: Personally Appropriate
3. Esteem: Perceived Quality and Increase in Popularity
4. Knowledge: Awareness and Understanding

If we were to club these dimensions under our two components, we would get the following two equations:

1. Brand Stature = Brand Esteem + Brand Knowledge
2. Brand Strength = Brand Differentiation + Brand Relevance

After going through this post and the last one, I think we have at least understood the basics of what Brand Equity is…. I hope that when someone asks us what this phrase means, we won’t be stumped and will be able to give a general and a technical definition, sufficient for us to impress the other I guess!! ;-)

Monday, March 10, 2008

Brand Equity – What exactly is this!!

‘Brand Equity’ is a very often used and misused phrase. This phrase is present in almost every text that one reads about marketing in general and branding in specific. But how many of us know what exactly does this mean!! All of us use this phrase during our Branding classes and even in all the written exams that we take related to this subject. But it is only when asked specifically what this means is when so many of us get confused!!
Let us try to see what this phrase actually means…. In simple words the following is a definition of Brand Equity:

“Differential effect that brand knowledge has on consumer response to the marketing of that brand”

Read the above definition again…. Now take examples of brands and see if it is true or not! When I see an ad of Airtel, my response to this marketing activity is very different from my response to an ad of BSNL. This is due to Brand Equity. The more the equity of a brand, the more favourable is the consumer response to that brand.

Another important point to be noted here is that if there is no differential consumer response, then the marketed product is not a brand but a commodity.

Try and look at each marketing activity from now on and try to think how our response to it is different from what it would have been had it the marketing not come from the same brand. This exercise shall help us internalize this simple definition of Brand Equity…

The next post on this blog shall discuss a more technical definition of this phrase and make an attempt to taking the concept to a more formal level… Till then, happy exercising!! (My exercising I mean internalizing the concept through the exercise mentioned above)

Friday, February 29, 2008

Vaseline: Outdoor Advertising for the Blind

Vaseline has taken outdoor advertising to a new level with this one!! How many FMCG brand managers would care to take an extra initiative and market specifically for the visually impaired?? Well, this one did!

Here is an outdoor poster that conveys the brand's message "Your skin is amazing", but the language is Braille. This brand by Unilever is one of the first ones to have started advertising for this segment of the population. Just imagine how much Brand Connect Vaseline can establish with this segment by such an initiative! And don't forget the Brand Loyalty it will achieve amonst the segment!!

Hats off to you Vaseline!!

Saturday, February 23, 2008

Applying Aristotle's Philosophy to Branding!

"More than hard assets, branding has more to do with the soft assets of an entity (generally a product or a service)". This statement looks very obvious today. But this was not always this obvious.

Branding as a subject has evolved over the years and with time marketers have realised that more than the product attributes or functional benefits, a brand connects more with the consumers on the dimensions of Brand Value. This was conspicuously noted when there was a hue and cry in the USA over the replacement of their favourite Coke by New Coke. The issue was not just about a drink that now tasted differently, it was about the value system that the brand loyalists believed in!

But in the early days of branding, it was the hard assets that were given much more significance. And this approach traces its roots to the Aristotle way of thinking. The entire western way of thinking traces its roots to Aristotle.

Aristotle said that every entity has Four Causes: Material, Efficient, Formal and Final. Applying this to branding, Aristotle's Four Causes of Branding would be:
1. Material Cause: What is the brand physically?
2. Efficient Cause: Who makes the product/service?
3. Formal Cause: What makes it identifiable to the world?
4. Final Cause: Which is the ulimate reason for its being?

Applying this to the brand Diet Coke (as per the book 'The Philosophy of Branding' by Thom Braun)"

1. Material Cause: Carbonated Drink
2. Efficient Cause: Coca Cola
3. Formal Cause: Characteristic Pack Design
4. Final Cause: Cool Refreshment with no Sugar

As one can see from this, it is only the hard assets that are stressed upon. And imagine, it was this approach that marketers would have initially started with! Thankg God we have come a long way since then!

Wednesday, February 13, 2008

Post-it® Note Persuasion: A Sticky Influence

In a recent study by Randy Garner from Sam Houston State University it has been shown how a personailzed "Post-It" note along with a questionnaire or any response sheet can increase the probability of getting a response. This is a breakthrough study for all market-researchers, e-mail marketers and students of marketing! The abstract of the paper that has been published is given below for your reference:
"Four studies examine the influence of attaching a seemingly insignificant Post-it note to a survey packet on the likelihood of completing the survey. Participants who received a packet with an affixed Post-it note request had significantly higher return rates than participants who received the identical survey with (a) no sticky note,(b) the same message written on the cover sheet but without a Post-it or (c) a blank Post-it with no message provided. Furthermore, they returned the materials more promptly with higher quality responses. A more personalized Post-it appeal increased returns when the survey was long and time consuming but was no more effective than a nonpersonalized Post-it when the survey was easy to complete. Results suggest that the Post-it leads the request to be interpreted as a solicitation for a personal favor, facilitating a normative compliance response."

Tuesday, February 12, 2008

Contextual Marketing: Arrive Alive Tries it Out!

Contextual Marketing, as the term suggests, means creating an impact using the right product with the right message when the consumer is the right frame of mind. The term traces its roots to internet marketing when banner ads of Tylenol appeared whenever the stock market in the US dropped by a 100 points... The right frame of mind for the consumers (brokers in this case) isn't it!!

Today, contextual marketing has become a necessity for any kind of product or service in almost every product category. In-Store Marketing and Customer Contact Programmes are nothing but off-shoots of this concept.

Here is an example of how contextual marketing finds a place in a somewhat unkown but yet innovative application. Arrive Alive was launched by the North Wales Road Casualty Reduction Partnership at Ysbyty Glan Clwyd in October 2001. The aim of the campaign is to make the roads of North Wales safer by encouraging people to keep within the speed limits, reducing collisions and, consequently, reducing the number of people killed and injured. Today the same campaign has ben replicated in other countries too, South Africa being one of them.

In order to promote their recent campaign of 'think before you drink and drive', Arrive Alive decided to hit pub-goers in the right frame of mind i.e. use Contextual Marketing! Look at these stickers of paased out individuals that have been stuck inside toilets at pubs. Innovative and effective right!!

The agency Jupiter Drawing Room has done a good job with this campaign. But hey!! Right now they have a lot of real life volunteers to demonstrate the effects of drinking too much by actually getting passed out in toilets at pubs!! Hope stickers replace them soon ;-)