Three Ways to Measure Brand

Brand Measurement Processes For Every Budget

One of the reasons given for not investing in a brand, particularly a technology brand, is that it is difficult to measure the return on investment.  Patently not true!  In actuality, there are a number of ways to measure the impact of the brand. 

Here are three brand measurement processes.  The Brand Report Card, Brand Equity Measurement and Brand Valuation Which one is right for your company?  That depends upon the strategic importance of brand to your company, available resources (including budget), and the desired level of measurement sophistication.

Let’s look at each from the easiest and least expensive to use to the most expensive and sophisticated.

Brand Report

In the January-February 2000 Harvard Business Review, Kevin Keller introduced the Brand Report.  This very simple, very easy to use tool measures brand equity as a creative asset.  The report card identifies 10 traits shared by the strongest global brands.  Marketers can use those traits to grade their own brand (a 1-10 scale is recommended, with 10 being best of class). 

Weighting each trait according to importance to a particular industry segment increases the tools sophistication and asking a broader sample of knowledgable individuals to complete the report card enhances the probability of accuracy.  Better yet, tap into the customer base for their input.

Apply the report card to both your own company and to your competitors.  The  objective is to identify areas of strengths, weaknesses, and areas for improvement. 

The brand report card’s main value is that it is relatively quick and easy to complete, requiring few resources.  The downside is that it is not very sophisticated from a quantitative perspective and will reflect the bias of the participants.

Brand Equity Measurement

David Aaker and Erich Joachimsthaler in their book “Brand Leadership” proposed measuring a brand’s equity. Brand equity measurement evaluates the brand assets (or liabilities) linked to  a brand’s name and symbol that add to (or subtract from) a product or services.  Brand equity is measured over the five  dimensions and 11 constructs (see below).

Awareness Perceived  Quality Association/ Differentiation Loyalty Market  Behavior
Brand Awareness Perceived Quality Perceived Value Price Premium Market Share
  Leadership Brand Personality Satisfaction Price Indices
    Organizational Associations   Distribution Indices

This system taps into the full scope of brand equity, focuses on sustainable advantages, reflects constructs that drive the market, are sensitive to change and are applicable across brands, product categories and markets.  Marketers should mix and match dimensions and constructs to accurately reflect their markets’ dynamics.  On the downside, brand equity measurement is subjective and requires more resources. 

Brand Valuation

Brand valuation is the practice of assigning a dollar value to the brand.  Brand valuation  was driven by the increase above stock market value of consumer company acquisitions in the mid ’80s. Since the 1990’s there has been an increasing need to establish a dollar valuation for all categories of intellectual capital assets. 

There are four broadly accepted brand valuation methodologies: Cost, Market, Income and Brand Strength.  Brand Strength is the most sophisticated and widely accepted of these methodologies.

The advantage of brand valuation is that it is extremely comprehensive and uses proven statistical techniques to reach its conclusions. Some critiques point out that there is sill a qualitative influence on the processes and, while the process is highly sophisticated and answers management’s challenge (“so what’s the brand worth?), it is expensive and requires the services of a specialized outside vendors.

I have posted a brand measurement presentation under the case history section  of www.b-practicum. com.  Take a look at it. 

How do you measure your company’s brand value?  Tell me and I’ll post your comments.

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About businesspracticum

Chuck Byers is the Managing Director of Business Practicum & Adjunct Professor at Santa Clara University
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