SBM 9 Flashcards
(36 cards)
Why measure brand equity?
- to legitimize marketing activities in the boardroom
- coordinate across the organisation
- encourage long-term thinking in marketing initiatives
What are the four stages of the brand value chain?
- Marketing programme investment
- Customer mindset
- Market performance
- Shareholder value
What factors are included in the ‘marketing programme investment’ stage?
- Product
- Communication
- Employees
- Other marketing activities
What is included in the ‘customer mindset’ stage?
- Awareness
- Associations
- Attitudes
- Attachment
- Activity
What performance indicators are measured in the ‘market performance’ stage?
- Price premium
- Elasticity
- Market share
- Profitability
What indicators define the ‘shareholder value’ stage?
- Stock price
- Price-to-earnings (P/E) ratio
- Market capitalisation
What multipliers affect each stage of the brand value chain?
- Programme quality (clarity, relevance, distinctiveness, consistency)
- Market conditions (competition, channel support, segment size)
- Investor sentiment (growth potential, risk, brand contribution)
What are the 3 key implications of the brand value chain model?
- Value starts with marketing programme investment
- Value creation needs more than just investment
- The model helps focus research where it matters
What are some common tools to measure brand equity?
- BrandAsset Valuator (Young & Rubicam)
- Interbrand Brand Equity Model
- Digital economy approaches
What are the 4 core pillars of the BrandAsset Valuator?
- Differentiation
- Relevance
- Esteem
- Knowledge
How is brand strength defined in the BAV model?
Brand Strength = Differentiation + Relevance (future potential)
How is brand stature defined in the BAV model?
Brand Stature = Esteem + Knowledge (current brand perception)
What are the four quadrants of the BAV DREK model?
- Leadership = High Strength + High Stature
- Emerging Potential = High Strength + Low Stature
- Eroding Potential = Low Strength + High Stature
- Unfocused/Unrealised = Low Strength + Low Stature
What did the eBay example illustrate in the BAV model?
eBay scored high across all four pillars, showing a strong brand with both strength and stature.
How did Amazon UK’s brand equity change from 2000 to 2010?
It moved from low Differentiation, Esteem, and Knowledge to high scores in all four pillars, showing major brand growth.
What happened to Gap UK between 1993 and 2005?
- 1993: Low brand equity
- 1999: Significant growth
- 2005: Drop across all four pillars → brand faded after initial success
What does the Sportsgirl case show about brand revitalisation?
- 2000: Low brand equity
- 2003 & 2006: Strong recovery and sustained performance → Fading brands can bounce back with the right strategy.
How can BAV be used in portfolio management?
It helps companies like Unilever compare and position multiple brands based on their DREK scores.
What is the relationship between BAV strength/stature and profitability?
Brands in the top-right DREK quadrant have significantly higher profit margins (~9.3%) than those in lower quadrants (~5.9–6.5%).
What is the link between BAV and earnings growth?
Brands with both high strength and stature show the greatest earnings growth (+122%), while weak brands show decline (-27.2%).
What is the ‘Envy Zone’ in luxury branding?
Top-right quadrant in the DREK model; includes brands like Prada, Ferrari, Louis Vuitton, and Hermes with high strength + stature.
What does the Interbrand brand equity method aim to do?
Link brand performance to financial value using a structured 3-step approach.
What are the 3 steps of the Interbrand valuation process?
- Financial forecasting
- Role of branding
- Brand strength assessment
What internal and external factors define brand strength in Interbrand’s model?
- Internal = Clarity, Commitment, Protection, Responsiveness
- External = Authenticity, Relevance, Differentiation, Consistency, Presence, Understanding
