Measuring and interpreting

brand performance
Module 4

Brand value chain

It is a structured approach to assessing the

sources and outcomes of brand equity and

the manner in which marketing activities
create brand value.
The brand value chain thus provides

insights to support brand managers, chief

marketing officers, managing directors and
chief executive officers, all of whom may
need diff types of information.

Brand value chain

The brand value chain has several basic

premises:
1. It assumes that the value of a brand ultimately
resides with customers. It assumes that the
brand value creation process begins when the
firm invests in a marketing program targeting
actual or potential customers.
2. The associated marketing activity then affects

customer mind set what customers know and

feel about the brand.

Brand value chain

This mind set, across a broad group of customers

produces the brands performance in the market

place- how much and when customers purchase,
the price that they pay, and so .forth.
Finally the investment community considers this

market performance and other factors such as

replacement cost and purchase price in
acquisition- to arrive at an assessment of
shareholders value in general and a value of the
brand in particular

Brand value chain

The model also assumes that a number of linking factors

intervene between these stages.

These linking factors determine the extent to which value

created at one stage transfers or multiplies to the next

stage.
Three set of multipliers moderate the transfer between the

marketing program and the 3 value stages; the product

quality multiplier, the marketplace conditions multiplier, and
the investor sentiment multiplier.

Value stages
Brand value creation begins with marketing activity by the

firm
1. Marketing program investment: any marketing program
investment that can contribute to brand value development,
intentionally or not, falls into this first value stage.
. This stage outlines many such marketing activities like
product research, development and design; marketing
communication including advertising, promotion, direct and
indirect marketing etc.
. The ability of a marketing program investment to transfer or
multiply farther down the chain depends on qualitative
aspects of the marketing program and the program quality
multiplier.

Value stages
Program quality multiplier: the ability of the

marketing program to affect customer mind set will

depend on its quality. Four particularly imp ones are:
Clarity: how understandable is the brand marketing
program?
Relevance: how meaningful is the marketing
program to customers?
Distinctiveness: how unique is the marketing
program?
Consistency: how cohesive and well integrated is the
marketing program?

Value stages
2.

.
.
.
.
.
.
.

Customer mind set: customer mind set includes everything

that exist in the minds of customers with respect to a brand:
thoughts, feelings, experiences, images beliefs and attitudes.
Five dimensions have emerged as particularly imp measures
of the customer mind set
Brand awareness
Brand associations
Brand attitudes
Brand attachment
Brand activity.
The ability of this customer mind set to create value at the
next stage depends on external factors i.e the marketplace
condition multiplier.

Value stages
Marketplace conditions multiplier: the extent

to which value created in the minds of

customers affect market performance
depends on factors beyond the individual
customer. They are
Competitive superiority: how effective are the
marketing investments of competing brands?
Channel and other intermediary support
Customer size and profile

Value stages
3. Market performance: Six key outcomes of

that response are as follows:

.. The first two dimensions relate to price
premiums and price elasticity's.
.. A third dimension is market share
.. The fourth dimension is brand expansion
.. The fifth dimension is cost structure
.. All the above said dimension leads to brand
profitability, the sixth dimension.

Value stages
Investor sentiment multiplier:
Considerable factors are:
. Market dynamics: What are the dynamics of

the financial markets as a whole?

. Growth potential: what are the prospects for
the brand and the industry in which it
operates?
. Risk profile: what is the risk profile for the
brand?
. Brand contribution: how important is the
brand as part of the firms brand portfolio?

Share holders Value:

Based on all available current and forecasted

information about a brand as well as many

other considerations, the financial market
place then formulates opinion and makes
various assessments that have very direct
financial implications for the brand value
Three important indicators are the stock
price, the P/E multiple, and market
capitalization rate.

Introduction
Tracking studies collect information from consumers on a routine basis

over time, typically through quantitative measures of brand performance

on a number of key dimensions marketers can identify in the brand
audit or other means.
They apply the brand value chain to understanding where, how much,
and in what ways brand value is being created, thus offering invaluable
info about how well the brand has achieved its positioning.
Tracking studies thus play an imp role by providing consistent baseline
information to facilitate day to day decision making.
Tracking studies involves
. What to track?
. How to conduct tracking studies?
. How interpret tracking studies?

What to track
Product-brand tracking
Corporate or family brand

tracking
Global tracking

How to conduct tracking studies

In general marketers use the brand name, but

it may also make sense to use a logo or

symbol in probing brand structures, especially
if these elements play a visible and important
role in the decision process
You also need to decide whom to track, as
well as when and where to track

How to interpret tracking studies

This may reflects that fact that the

underlying levels of brands awareness, the

strength, favorability, uniqueness, valence of
brand judgments, feelings, loyalty do not
change much over a period of time.