Brand Equity

Build the social value and sway of your brand in the minds of consumers

What is brand equity?

The relationship between customers and brands generates a type of value-add which can be described as brand equity. For example, some brands are better known than others, others have more compelling propositions, while yet others have stronger associations and emotional bonds with consumers. Brands with high levels of equity generally do better in terms of market share, are less prone to having to compete on price, and generally have more loyal customers.

How do we measure brand equity?

There are many ways to measure brand equity and, since the early 1990s, a proliferation of models have been developed by marketing and brand researchers. Each of these try to understand the value the brand brings to the consumer against an unbranded product by looking at dimensions such as awareness, trial, quality or performance, brand image or perceptions and, of course, loyalty.

Common customer-based brand equity models

If you want to find out more about the various brand equity models that exist, here are some of the most used customer-based brand equity models out there.

  • Aaker’s brand equity model – a model that consists of five different assets that are the source of value creation. These are brand loyalty, brand awareness, brand quality, brand associations and brand assets.
  • Keller’s brand equity pyramid (requires Academia account to view) – a model which defines brand equity in terms of consumers’ responses to marketing activity. The Keller model identifies six elements including brand salience, brand performance, brand imagery, brand feelings, brand judgements and brand relationships.
  • Yoo and Donthu brand equity model – a complex structural model of brand equity consisting of three components. These are marketing mix elements, brand equity dimensions and overall brand equity.

These models are often proprietary in nature and can be “black boxes” in practice, expensive to access and therefore confusing to understand and integrate into the monitoring of brand health.

Fortunately, there is another way. Using simple brand health metrics already deployed as part of our brand funnel, we can create a set of additional scores that can be used to measure a brand’s equity that’s easy to understand and won’t break the bank. We call it the brand equity web.

Let D&M Research create and tailor a brand health study to suit you.

Example of a brand equity web

These new scores – Salience, Propensity, Proposition, Adoption and Resonance – use a technique called ratio analysis which is a simple process of dividing one brand funnel metric by another to create a ratio of how consumers are being converted through the brand funnel and therefore reflecting aspects of the actual relationship of the brand to consumers.

The scores not only indicate the relative strengths and weaknesses of a brand’s equity, but also can compare brands with different market shares on a level playing field.

Brands with lower awareness can score just as well as brands with higher awareness if they convert through the funnel at equally high levels. For a brand like one plotted in the web above, the key job would be to increase its awareness to be a real threat to the larger brands. Other brands might do well at converting awareness through to trial by having a compelling proposition, but then fail in adoption because the product did not perform to expectations.

Using brand equity webs can reveal these strengths and weaknesses not only for your brand but also for the market leader and your direct competitors, giving real insight into what needs to be done to increase market share. The other benefit is that they are flexible; you can create whatever and as many scores as make sense to your brand and category.

Let D&M Research create and tailor a brand health study to suit you.

For a detailed guide to the techniques and metrics used in brand health studies, download our printable Brand Health and Equity Guide

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