MEASURING BRAND EQUITY
The power of a brand resides in the minds of consumers and how it changes their response to marketing there are two basic approaches to measuring brand equity. An indirect approach assesses potential sources of brand equity by identifying and tracking consumers brand knowledge structures. A direct approach assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing.
The two general approaches are complementary, and marketers can employ both. In other words, for brand equity to perform a useful strategic function and guide marketing decisions, it is important for marketers:
1. Fully understand the sources of brand equity and how they affect outcomes of interest
2. How these sources and outcomes change, if at all, over a time period
Brand audits are important for the former; brand racking is important for the latter.
To better understand their brands, marketers often need to conduct brand audits. A brand audit is a consumer-focused exercise that involves a series of procedures to assesses the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity.
The brand audit can be used to set strategic direction for the brand.
* Are the current sources of brand equity satisfactory?
* Do certain brand association need to be strengthened?
* Does the brand lack uniqueness?
* What brand opportunities exist and what potential challenges exist for brand equity?
As a result of this strategic analysis, the marketer can develop a marketing program to maximize long-term brand equity.
Marketers should conduct a brand audit whenever they consider important shifts in strategic direction. With newspapers experiencing declining circulation as more people rely on radio, TV, and the Internet for their news, some publishers are now commissioning brand audits and attempting to redesign newspaper to be contemporary, relevant, and interesting to readers.
Conducting brand audits on a regular basis (e.g. annually) allows marketers to keep their fingers on the pulse of their brands so that they can manage them more proactively and responsively. Audits are particularly useful background for managers as they set up their marketing plans.
Brand audits can have profound implications for strategic direction and brandsâ€™ resulting performance.
Case of Polaroid:
The results of a brand audit in Western Europe led Polaroid to decide to try to change its conventional photography image there to emphasize the â€œfun sideâ€? of its cameras. Polaroid gave one group of consumers 35mm cameras and another group Polaroid cameras. Both groups went to a wedding and were told to shoot a roll of film. The 35mm photos were typical wedding fareâ€”posed and proper. The Polaroid photos were completely differentâ€”spontaneous and spirited. Those consumers with the Polaroid began to tell stories of the amusing antics that happened when they appeared. Polaroid learned from this research that its cameras could be a social stimulant and catalyst, bringing fun into peopleâ€™s lives, a theme that was picked up in advertising and that suggested new distribution strategies
A brand audit requires the understanding of sources of brand equity from the perspective of both the firm and the consumer. From the perspective of the firm, it is necessary to understand exactly what products and services are currently being offered to consumers and how they are being marketed and branded. From the perspective of the consumer, it is necessary to uncover the true meaning of brands and products to the consumer.