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Measuring and valuing brands

The secret power of brands Week 2

How can you measure a brand?


If a brand is A set of ideas in peoples minds That influences how they think, feel and act And so creates commercial and social value Then you can measure, at least in theory: IDEALIST The strength of those ideas BEHAVIOURIST The change in how people act FINANCIAL The value created

Measuring ideas

Measuring ideas
Traditionally, these five things are measured:
SATISFACTION DO THEY HAVE A POSITIVE EXPERIENCE? LOYALTY WOULD THEY RECOMMEND YOU TO FRIENDS?

AWARENESS HAVE POTENTIAL CUSTOMERS HEARD OF YOU?

CONSIDERATION DO THEY CONSIDER WHAT YOU OFFER?

PREFERENCE DO THEY BELIEVE YOURE BETTER?

Measuring ideas
The advertising agency Y&R has a methodology called BrandAssetTM Valuator which measures four things and combines them to measure the strength of the brand:

YOUNG-RUBICAM.DE

Measuring ideas
WPP surveys over 150,000 consumers each year to build its BrandZ database, which measures these five things in its BrandDynamics Pyramid:

WPP.COM

Measuring behaviour

Measuring behaviour
Three typical behaviours to track are:

NUMBER OF CUSTOMERS Influenced by Awareness Consideration

AVERAGE SPEND Influenced by Preference

FREQUENCY OF BUYING Influenced by Satisfaction Loyalty

REVENUE

Measuring value

Measuring value
Tim Ambler of London Business School has defined a brand as an upstream reservoir of future cashflow On this view, the value of a brand can be measured by combining its strength or equity with the likely future revenues it will generate Three agencies use sophisticated techniques to create dollar valuations for the worlds biggest brands Their latest figures are on the next page

Brand valuations, in $ billion


Interbrand 2013
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Apple 98 Google 93 Coca-Cola 79 IBM 79 Microsoft 60 GE 47 McDonalds 42 Samsung 40 Intel 37 Toyota 35

BrandZ 2013
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Apple 185 Google 114 IBM 113 McDonalds 90 Coca-Cola 78 AT&T 76 Microsoft 70 Marlboro 69 Visa 56 China Mobile 55

Brand Finance 2013


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Apple 87 Samsung 59 Google 52 Microsoft 46 Wal-Mart 42 IBM 38 GE 37 Amazon 37 Coca-Cola 34 Vodafone 31

What conclusions would you draw from these figures?

Measuring value
The next step in brand measurement is to find a way to quantify a brands social impact, as well as its commercial impact the two dimensions we explored in week 2.

How would you go about doing this?

Find out more


The topic of measurement and valuation is becoming increasingly important, as companies seek to understand their return on investment (ROI) in marketing A good guide to this thorny subject is Jonathan Knowles and David Rutherford's Vulcans, Earthlings and Marketing ROI (2008)

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