Brand Equity, Transference & Extendibility

In recent years, there has been great debate in the literature concerning the definition of brand equity. The definition of brand equity that CRS has adopted and feels most comfortable supporting can be stated as:

“Brand equity is the differentiating factor that allows a brand to charge over and above comparable brands that provide similar benefits.”

Brand equity is a composite of multiple factors that all influence a customer’s perception of the brand. Each of these factors carries a different weight in driving brand equity and each of these weights changes on a product-by-product basis and over time.

The three overall components of CRS’s assessment model include Image, Loyalty and Reach of the brand. All three components affect a brand’s equity and are comprised of several factors, which become the key input into the model.

CRS operationalizes brand equity through a brand-price choice trade-off exercise. These results become the dependent measures used to develop the equity models.

The first phase of the project is qualitative in nature and usually consists of mini-groups or one-on-ones. In the next phase, the quantitative brand equity interview tends to last between 20-25 minutes. Data is generally collected via mall intercepts, central location testing, mail panel or using Internet-based interviewing.

After processing the data, CRS produces a very strong analytical package which includes:

  • Brand Positioning Maps:
    Maps are used to present the positioning of the client brand versus its competitors on performance based attributes.
  • Customer Loyalty Analysis:
    Based on attitudinal and behavioral measures of Loyalty. This analysis categorizes customers of each brand as being Loyal, Potentially Vulnerable or Vulnerable.
  • Equity Profile:
    Based on a brand-price choice exercise, a profile of each brand’s equity is produced. This analysis compares the share of preference for each brand in light of raising prices for a comparable product or service.
  • Component Impact on Equity Models:
    Models are constructed based on the overall ratings of brand image, user image and product performance image. Regression based models are developed which determine the degree of association each Image component has with each brand’s operationalized equity.
  • Attribute Impact on Equity Models:
    Regression based models are used to predict the affect that changes in the individual image attributes would have on brand equity. The attributes are categorized as an equity “Enhancer,” “Eroder” or a “Linear” relationship.
  • Composite Brand Equity Score (CBES):
    The CBES is the longitudinal measure of brand equity which should be tracked and compared over time. It is a composite index of all the measures associated with CRS’s brand equity approach.

The approach CRS takes to assessing brand equity produces both tactical and strategic results. The study is designed in such a way that changes in a brand’s equity can be tracked over time.

The project design also allows for a consistent means to measure the ability to transfer or extend the core brand’s equity to an extension product. CRS assesses the correlation between the core brand’s equity and the extension brand’s equity. The stronger the correlation, the greater the opportunity to successfully launch the brand extension.

 

Additional Info

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