BRAND EQUITY

BRAND EQUITY
 If there is one goal for all the marketer’s duties and responsibilities, it would be the building up of brand
equity.
 Refers to the value of the brand. Ideally, this value would be expressed in the form of peso value.
Unfortunately, figuring out the peso value of a brand is not quite that simple to do. This is because brand
equity is, for the most part, intangible and near-speculative. That is to say, there is really no way to figure
out the exact value of a brand in real time.

 Brand equity can be calculated using the following ingredients:

 The Present Value (PV) of the income stream from an average customer of the brand, also known as the
Costumer Lifetime Value(CLV). CLV is the present value of the anticipated profit stream S (anticipated
revenues minus anticipated costs) throughout the costumer’s lifetime relationship with brand.
 The current market size of the brand (MS).

 The average expected growth rate of the brand from here on (G).
 The expected commercial lifespan of the brand (LS), which is pretty much a rough estimated but can be set
to 20 years for practical purposes.
 BRAND VALUATION
 Brand valuation can be a number of metrics that are deemed to be important for gauging how much
consumers appreciate a brand, such as the number of times a costumer patronizes the product per annum,
how costumers rate the brand versus competitors on key attributes, and how much customers say they “like”
the brand on scale of 1-10.
 Index is a single number that summarizes the quantifications of essential brand elements that have to be
monitored. It could be something like:
Brand Value Index = (Number of Patrons) x .15 + (Number of Facebook Likes) x .05 + (Average
satisfaction rating for brand) x .30 …
Once the index value is calculated, a marketer can compare this with previous periods’ performance
in order to determine if the brand asset is improving or not.
 DEVELOPING A NEW BRAND
 A well-designed brand strategy can help to enhance a product’s chances of being accepted by the market and
of surviving for the long term. But you just cannot just plug in the first words that come to mind and
scribble an ad hoc logo to go with it. The following is a recommended process for building up a new brand.
Step 1. develop the brand strategy
Before you even contemplate on what the brand name should be, you must first have a good
understanding of the business and of the business model that the brand will be representing.
 Product information.
 Market information
 Trademark criteria
 Brand name objectives
 STEP 2. DEVELOP THE CREATIVE THEME
The elements in this step will take off from the groundwork of the first step, so issues such as brand
name objectives and market information will be applied to the points of this step.
 Brand personality

 Inferences and connotations

 Color palette style sheets
 Font

 Visual cues
 Acceptable uses and materials
 Retail placement
 STEP 3. CREATE THE NAME
Finally, after all the groundwork has been laid, it is now time to create the actual brand name.
 Keep it short- notice how the most memorable brand names are only up to three syllables long.
 Make it easy to pronounce and remember- it will not pay to have a brand name that is hard to spell,
remember, or pronounce.
 It should translate well in the target market- especially if you plan on selling your product to the
international market, your brand name should not connote anything negative in those territories.
Brand names can be:
 Eponyms or names of people as the founders or even historical people.
 Descriptive, connoting something about the product it self or its benefits
 Abbreviations or portmanteaus the latter referring to the combination of words to make a new word
 Symbolic or image-driven
 Synthetic which means the brand name is not dictionary word but instead an invented one
 STEP 4. TEST THE NAME
Apply your proposed brand name to your creative theme (from step 2), incorporating
the selected font, color scheme, and imagery to it. Next create a mockup of your product,
applying your proposed branding to its label or signage.
Find a few people who are representatives of your target market and test your brand
imagery with them. If you are selling a tangible product, have them look and touch your product
properly.

STEP 5. SCREEN FOR TRADEMARK

AVAILABILITY
Finally, if your proposed brand passes the test marketing, you will need to make sure
that it is actually available at the INTELLECTUAL PROPERTY OFFICE
 GOING BEYOND ONE PRODUCT

Small enterprise would likely begin with just one product, effectively behaving just like a single business unit.
Sooner or later, however, the business will likely need to expand its product line. For most business, this is an
inevitability.
Why should firms expand their offerings? Mostly, it will be about economies of scope. Whereas economies of
scale pertains to the reduction in costs of goods when production is ramped up, economies of scope pertains
to the reduction in overhead costs that is possible when the enterprise produces more than one good.
 THE PRODUCT MIX
The product mix is the set of all the products that a business offers sale and is categorized along with the following
dimensions:
 Length- the length of the product line

 Width- the number of different product lines carried.

Depth- the number of variants per product in line.
Length pertains to the number of products offered in a product line. As mentioned earlier, this typically involves
having each product in the line targets a distinct market. This is actually an important point because what you do not
want is to have two different products in the line that inadvertently target the same target market. If this happens, then
cannibalization is the result, with one product simply stealing market share from the other.

Width refers to the number of product lines that a marketing entity may have.
Depth pertains to variety, which is typically manifested as flavors, colors, sizes, or formulations for a particular
product.