Unit 3 Brand Management in the context of Nepal

Unit: 3
MBS 4th
Sem. Marketing Management:
• Brand Management
• (2081 Kartik 28 Wednesday)
• Shankar Dev Campus
• Tribhuvan University
• Shambhu Pokharel
• (M.Phil, MBA., PGDCP., BA.)

• MKT 687: Brand Management Credits: 3
• Unit 3: Planning and Implementing Brand
Marketing Programs LH 12
• Criteria for choosing brand elements.
• Options and tactics for brand elements.
• Designing marketing programs to build brand
equity: product strategy, pricing strategy,
• channel strategy, marketing communication
options and developing integrated marketing
communication programs.
• Leveraging secondary brand knowledge to build
brand equity.

Criteria for Choosing Brand Elements
• Following are the criteria for choosing
brand elements:
• 1. Memorability: Brand elements should
be easy to recognize and recall.
• For example, a logo is a brand's
personality in an image that's easy to
recognize.
• 2. Meaningfulness: Brand elements
should have some story behind them.
• For example, the Twitter bird logo was
inspired by basketball player Larry Bird.

• 3. Likability: Brand elements should be
visually and verbally appealing.
• 4. Transferability: Brand elements should
add value to new products and markets.
• For example, if a brand develops a new
product, the name and elements should
be transferable to that product.
• 5. Adaptability: Brand elements should be
flexible enough to update over time.
Customer needs change, so the market
will change, too.

• 6. Protectability: Brand elements must be
legally protected from infringement.
• This can be done through registration and
competitive defense.
• Other brand elements
• 7. Typography: The typeface used can
influence the overall brand identity.
• 8. Color palette: A well-defined color palette
ensures uniformity across platforms.
• 9. Brand name: The name is an essential
part of a brand's identity.

Options and Tactics for Brand Elements
• Some options and tactics for brand elements
include:
• 1. Target audience: Researching your target
audience can help you understand their needs,
perspectives, and buying preferences.
• 2. Brand positioning: This involves using
marketing and client experience to establish and
maintain your brand's position in the
marketplace.
• 3. Brand purpose: This goes beyond the product
benefit and looks at what motivates people to
act.

• 4. Brand personality: This is a set of
distinctive qualities that make your
brand stand out.
• 5. Brand voice: This is the consistent
personality and emotion that you infuse
into your company's communications.
• 6. Market analysis:
• This is an analysis of the marketplace
that helps you identify gaps where your
brand can position itself.

• 7. Consistency: This is critical so that
customers know what to expect from
your brand every time they engage with
it.
• 8. Strategy: A brand strategy is the
plan and approach for building and
managing a brand. It includes
elements like brand positioning, target
audience, messaging, visual identity,
and overall brand experience.

• Leveraging secondary brand
knowledge is a marketing strategy
that involves linking a brand to other
entities to build brand equity.
• This can help create new associations
for the brand and transfer existing
associations from the entity to the
brand.

Brand Equity
• The concept of brand equity was first
introduced in the 1980s by David
Aaker, a marketing professor at the
University of California, Berkeley.

• Equity can be positive or negative:
• Positive equity: The proceeds from
the sale of a business would clear
debts, with some left over.
• Negative equity: The sale wouldn't
clear all debts, and the business
would still owe money.

• What is brand equity?
• Brand equity is the value premium that a
company generates from a product with a
recognizable name, when compared to a
generic equivalent.
• Companies can build their brand equity
with their products by making those
products memorable, easily recognizable,
and superior in quality and reliability.
Mass marketing campaigns also help to
create and strengthen brand equity.

• Why is brand equity important?
• Brand equity is important for
increased customer loyalty, which can
translate to repeated and increasing
sales despite higher-priced products
or services.
• Brand equity is also important
because it supports higher perceived
value, greater customer satisfaction,
and a more stable customer base.

• Simply put, consumers are more likely
to choose a brand that they know and
trust.
• Brand equity is a marketing term that
describes a brand’s value.
• That value is determined by consumer
perception of and experiences with the
brand.

• If people think highly of a brand, it
has positive brand equity.
• When a brand consistently under-
delivers and disappoints to the point
where people recommend that others
avoid it, it has negative brand equity.

• When a company has positive brand
equity, customers willingly pay a high
price for its products, even though
they could get the same thing from a
competitor for less.
• Customers, in effect, pay a price
premium to do business with a firm
they know and admire.

• Because the company with brand
equity does not incur a higher
expense than its competitors to
produce the product and bring it to
market, the difference in price goes to
their margin. The firm's brand equity
enables it to make a bigger profit on
each sale.

• KEY TAKEAWAYS
• Brand equity refers to the value a
company gains from its name
recognition and its perceived benefits
and admirable qualities.
• Brand equity has three basic
components: consumer perception,
negative or positive effects, and the
resulting value.

• KEY TAKEAWAYS:
• It has a direct impact on sales volume
and a company's profitability because
consumers gravitate toward products
and services with great reputations.
• Often, companies in the same
industry or sector compete on brand
equity.

Brand Equity's Effect on Profit Margins
• Brand Equity's Effect on Profit Margins:
• The importance of brand equity's potential
to boost profits and increase profit margins
is demonstrated by the effort that certain
companies make to support the high quality
of their products.
• i. Higher Prices:
• When customers attach a level of quality or
prestige to a brand, they perceive that
brand's products as being worth more than
products made by competitors.

• Thus, they are willing to pay more for
them. In effect, the market bears
higher prices for brands that have
high levels of brand equity.
• However, because its customers are
willing to pay more, it can charge a
higher price for that product (brand),
with the difference going to profit.
Therefore, positive brand equity can
increase profit margin per customer.

• ii. Higher Sales Volume:
• Brand equity has a
direct effect on sales volume because
consumers gravitate toward products
that either have great reputations
themselves or come from companies
with great reputations (or both).

• For example, when Apple releases a
new product, customers line up
around the block to buy it even
though it is usually priced higher than
similar products from competitors.
• One of the primary reasons
why Apple's products sell in such
large numbers is that the company
has amassed a staggering amount of
positive brand equity.

• iii. Customer Retention:
• Customer retention is the third area in
which brand equity affects profit
margins.
• Returning to the Apple example, most
of the company's customers own not
just one Apple product, but several.
Plus, they eagerly anticipate new
releases.
• Apple's customer base is fiercely loyal,
sometimes bordering on evangelical.

• The company enjoys high customer
retention, another result of its brand
equity.
• By retaining existing customers, Apple
increases profit margins by lowering
the amount it has to spend on
marketing to achieve the same sales
volume.
• It costs less to retain an existing
customer than to acquire a new one.

Benefits of Brand Equity
• Following are the key benefits or
advantages of brand equity:
• 1. Customer Loyalty:
• Customers with a positive perception
of a brand are more likely to
repeatedly purchase from it, leading to
consistent sales and reduced
customer acquisition costs.

• For example, Starbucks has built an
empire on brand awareness. They’ve
capitalized on brand loyalty by
employing such a great marketing
plan that Americans often associate
‘Starbucks’ with ‘coffee’ without
thinking.
• Although it’s a hugely successful
company, Starbucks’ biggest asset is
their brand equity.

• Brand equity is closely tied to
a brand’s image. A strong and image
can significantly enhance a brand’s
equity. Factors like brand reputation,
consumer perception, and brand
personality contribute to this image.
Brands with strong equity are
perceived as more valuable in the eyes
of consumers.

• 2. Price Premium:
• Brands with high equity can charge
premium prices for their products.
This is the extra amount that
consumers are willing to pay for a
branded product over its generic
counterpart. It reflects the perceived
value and quality associated with the
brand.

• For instance, Bata, a renowned Indian
footwear brand, has built a reputation for
durability and comfort.
• As a result, consumers are willing to pay
a premium for Bata shoes compared to
lesser-known brands.
• Strong brand equity allows companies to
charge higher prices for their products
compared to competitors due to the
perceived value associated with the
brand.

• 3. Brand Awareness:
• High brand equity means consumers
easily recognize and recall the brand,
making it easier to reach new
customers.
• 4. Positive Brand Associations:
• Strong brand equity fosters positive
perceptions and associations in the
minds of customers, enhancing the
overall brand image.

• 5. Brand Extensions:
• A reputable brand can leverage its
equity to successfully launch new
products or services under the same
name, benefiting from existing
customer trust.

• For example, Tata, one of India’s
oldest and most respected
conglomerates, has built a brand
known for trust and reliability.
• This perception has allowed Tata to
enter diverse industries, from salt to
software, and gain immediate trust
from consumers.

• 6. Returns to Shareholders:
• A brand’s financial performance is a key
metric.
• Brands that consistently deliver higher
returns to shareholders tend to have strong
brand equity.
• The stock market performance of a company’s
shares can also reflect brand equity.
• When the market values a brand highly, it
can increase the company’s share price.

• 7. Reduced Marketing Costs:
• Building brand equity reduces the
need for aggressive marketing efforts.
Strong brands can rely on their
reputation to attract customers.
• For instance, the Indian multinational
Infosys (information system) has
become synonymous with IT service
excellence.

• This strong brand equity saves Infosys
substantial marketing costs as clients
come to them based on their brand
reputation.
• Building a strong brand can decrease
marketing expenses as customers are
already familiar with the brand and its
values, requiring less advertising to
generate interest.

Measurement of Brand Equity
• Following are the ways to measure or evaluate
brand equity:
• 1. Brand evaluation:
• One way of measuring brand equity is by
trying to understand the
total value of the brand as a separate
monetary asset, which can be included on a
business’s balance sheet.
• This metric shows the worth of the brand,
reflecting the brand’s contribution to the
company’s success.

• How can we measure a brand’s financial
value? There are differing schools of
thought on this, where results produce
divergent estimates of brand value or
agreement on the direction of change,
differing from one year to the next.
• It’s worth considering the value in
terms of:
• Cost-value to create and build the brand
:- this could include budget spend on
advertising, trademarking or licensing.

• Market-value of what it’s worth when
put into the market to sell, when
looking at similar companies and
brands
• Income-value of what it brought into
the company, or how much the
company saved by growing the brand.

• 2. Brand strength:
• Brand strength, or the power of the
brand, can be measured by emotional
data - the differential value the brand
has acquired in someone’s mind, as a
result of multiple interactions over time.
• Equity is almost synonymous with
‘attitudinal strength’ or ‘strength in the
mind’ and is a proxy measure for the
relative consumer demand for the brand.

• You can capture this data using
consumer surveys, and a series of
evaluative questions that assess the
relative preference, or ‘wantability’ the
consumer has for the brand.

• 3. Brand awareness:
• Brand awareness is how well your brand is
known by your target customers, the
market and by key stakeholders.
• Since brand awareness is an emotional-
based metric, it can be measured with
questions asking about:
• A customer’s future intent to buy.
• A customer’s current brand awareness now
and over time
• The purchase history of target customers

• 4. Brand relevance:
• This is connected to customer satisfaction,
but focuses on whether your customers agree
that the brand provides unique value.
• This can increase your brand equity level as
the brand is perceived to be more valuable
and relevant to a target market or to fulfill a
specific purpose.
• Customer satisfaction surveys can help us to
understand customer’s satisfaction levels with
our company’s brands, products, services, or
experiences.

• 5. Output metrics:
• You can determine brand equity
through outputs like email marketing
or social media messaging about the
brand.
• It relates to ROI operational data that
tells you if your effort (e.g. number of
communications out) was worth the
investment.

• Email marketing won’t singularly
determine your brand equity, but it
will improve your brand awareness
and perception, and as awareness
grows, revenue should improve too.

This information can be gained from
sales transactions about promoted
brand products.
• The pricing power, or the brand’s
ability to command a premium
without losing business to a
competitor is often associated with
“brand equity” in consumer and
service markets.

• 6. Financial data:
• You can understand a product or
services’ brand equity by looking at the
financial results and sales performance
of the business.
• Historical data is necessary to assess
brand performance, like the market
share, profitability, revenue, price,
growth rate, cost to retain customers,
cost to acquire new customers and
branding investment.

• Also, don’t neglect some key
indicators of good brand equity, which
should all be increasing if you’re on
the right path:
• The price premium
in comparison with your competition
• The revenue growth rate.

• 7. Competitive Metrics:
• If competitors are doing badly, or if they are
giving a run for your money and creating
great marketing campaigns, their activities
will have an impact on your brand.
• You can see how your brand equity
performs within a competitive market, but
in particular, you can conduct
Competitor analysis to evaluate your
competitors’ strengths and weaknesses,
how their brand compares to yours.

Components of Brand Equity: David
Aacker’s model

• Components of Brand Equity: David
Aacker’s model
• Aacker has derived a simple framework,
which features the key components
comprising brand equity:
• 1. Brand loyalty,
• 2. Brand awareness,
• 3. Perceived quality,
• 4. Brand association, and
• 5. Other proprietary assets.

• 1. Brand Loyalty:
• Brand loyalty dictates that a consumer
who truly believes in the value of a
brand’s offerings will often make
frequent and repeat purchases from it
instead of switching between brands.
• High brand loyalty ensures that
business is stable and consistent, and
enables the organization to capture a
larger market share.

• 2. Brand Awareness:
• Brand awareness concerns the extent to
which a brand is known or recognizable
to a consumer.
• A brand with high brand equity will
spring to mind when a customer
searches for a particular product. This is
also termed brand salience; the brand
occupies a prominent position in
consumers’ minds.

• 3. Perceived Quality:
• This element centers on the brand’s
reputation for high-quality products
and customer experience.
• Good quality is favored more highly
than particular product features, with
consumers often willing to pay
premiums for high-quality products
relative to other brands.

• 4. Brand Association:
• Brand association involves anything related
to the brand, which evokes positive or
negative sentiments, for example, a
product’s functional, social or emotional
benefits. More broadly, this relates to the
brand’s overall image, and what consumers
associate with that image – if consumers
associate predominantly positive attributes
with the brand, then the brand possesses
high brand equity.

• 5. Other Proprietary Assets:
• Proprietary assets include patents,
trademarks, and channel or trading
partner relationships.
• These assets are vital to ensuring that
other brands cannot compete by
operating under a similar name or
using very similar packaging, which
may confuse consumers and compete
away from a brand’s customer base.

Elements of Brand Equity
Elements of brand equity are as
follows:
• 1. Brand awareness: The extent to
which consumers are familiar with
and recognize a brand.
• 2. Brand loyalty: The degree to which
consumers consistently choose a
specific brand over others.

Elements of Brand Equity
• 3. Brand image: The perception of
attributes that consumers have of a brand,
such as quality, reliability, and
uniqueness.
• 4. Brand associations: The emotional or
psychological associations that consumers
connect with a brand, such as feelings of
trust, reliability, or nostalgia.
• 5. Brand value: The perceived benefits and
overall value that consumers attribute to a
brand.

The Customer-Based Brand Equity
(CBBE) Model
• The Customer-Based Brand
Equity (CBBE) model is a
framework for building and
managing brands, developed by
Kevin Lane Keller, a marketing
professor.

(CBBE) Model
• The model is based on the idea that a
brand's equity is a reflection of the
value that customers attach to it.
• The CBBE model is shaped like a
pyramid, with the stages of brand
equity moving upwards towards the
apex.

(CBBE) Model
The model identifies six components that
contribute to customer brand equity which
are as follows:
• 1. Salience: How well a brand comes to
mind when a customer thinks about a
product category?
• 2. Performance: How well a brand meets
customers' needs?
• 3. Imagery: How customers perceive and
interpret the brand?

(CBBE) Model
4. Judgments: The overall evaluations and
attitudes that customers have towards the
brand.
• 5. Feelings: How customers feel about the
brand?
• 6. Resonance: The final stage, where
customers are highly engaged with the brand
and are ready to advocate for it.
• The CBBE model helps businesses understand
what their customers want and need, and how
to build a strong relationship with them.

(CBBE) Model
• The model can help brands move from
a strong foundation of brand identity
towards brand resonance, where
customers are loyal and ready to
recommend the brand.

( C B B E ) M o d e l O r K e l l e r ’ s P y r a m i d
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(CBBE) Model
• Keller’s pyramid is sectioned off with
four levels. The levels of the Brand
Equity pyramid are (Moving from base
to top):
• 1. Identity
• 2. Meaning
• 3. Response
• 4. Relationships

(CBBE) Model
• How to Use the Keller Model ?

• 1. Start with your brand identity:

Unit 3 Brand Management in the context of Nepal

• The biggest question to answer here is
“Who are you?”.
• Brand salience, or awareness, refers
to how you are perceived by your
customers.
• What do they think about your brand,
and is that thinking even accurate?

(CBBE) Model
• Here are a few things to consider
when trying to establish your brand
identity.
• 2. Understand and communicate
the meaning of your brand:

• The building blocks for step 3 are
Performance and Imagery.
• Performance indicates how well your
product satisfies the needs of your
customers.
• Does the product do as you advertise?
• Does it live up to the hype (buildup)
and get the job done?

(CBBE) Model
To provide clarity, Keller’s model breaks down
performance into 5 specific key performance
indicator categories which are:
1. primary characteristics and features
• 2. product reliability, durability, and
serviceability
• 3. service effectiveness, efficiency, and
empathy
• 4. style and design
• 5. price

(CBBE) Model
• Imagery refers to your brand’s social
currency.
• How does your brand appear to
customers/potential customers and
how will they talk about you?
• Be careful with how you construct
your messaging, where you target it,
and how it is perceived.

(CBBE) Model
• 3. What sort of response does your
brand evoke (suggest) from
customers?

(CBBE) Model

(CBBE) Model
• Look, we may not want to admit it but
we are always judging. Humans are
constantly making assumptions based
on what they observe.
• If someone drives past in a nice sports
car, you’d assume they make good
money.
• If you see someone decked out in Nike
apparel you might assume they are an
athlete or an avid (keen) sports fan.

(CBBE) Model
• What do people associate with your
brand? How is perceived by the
customer and how does it make them
feel?
• 4. Understand the relationship
you’ve built with your customers:

(CBBE) Model
• There is a reason resonance
(significance) sits atop Keller’s
pyramid.
• It’s, more often than not, the most
difficult level for a brand to reach.
• Brand resonance is how a customer
identifies themselves with the brand.

(CBBE) Model
• This is the strong, lasting relationship
your brand hopes to build with each
and every customer you gain along
your business journey.
• The idea is that your brand resonates
with customers so much that not only
do they keep coming back, but they
become your brand’s advocates.

(CBBE) Model
• Loyalty programs, customer
engagement via the internet and social
media platforms, building emotional
connections are great tactics that can
be implemented to assist in building
resonance.

The BrandZ model
• Brandz Model – Measuring Brand
Equity (Phlip Kotler Summary)
• Developed by: Millward Brown and
WPP
• Marketing research consultants
Millward Brown and WPP have
developed the BRANDZ model of
brand strength, at the heart of which
is the Brand Dynamics pyramid.

The BrandZ model
• According to this model, brand
building involves a sequential series of
steps, where each step is contingent
upon successfully accomplishing the
previous step.

The BrandZ model
• The objectives at each step, in
ascending order, are as follows:
• Presence. Do I know about it?
• Relevance. Does it offer me
something?
• Performance. Can it deliver?
• Advantage. Does it offer something
better than others?
• Bonding. Nothing else beats it.

The BrandZ model
• Research has shown that bonded
consumers, those at the top level of the
pyramid, build stronger relationships with
the brand and spend more of their category
expenditures on the brand than those at
lower levels of the pyramid. More
consumers, however, will be found at the
lower levels.
• The challenge for marketers is to develop
activities and programs that help
consumers move up the pyramid.

• The BrandZ model uses consumer
interviews and publicly available data
to understand how consumers
perceive a brand.
• It takes into account the intangible
perceptions that consumers have for a
brand, in addition to the tangible
assets on the company's balance
sheet.
• It provides actionable insights on how
to drive brand growth.

The Brand Dynamics Pyramid Model
• The Brand Dynamics Pyramid Model is a
component of the Brandz model, which
is a brand equity model that measures
brand strength:
• Brand Dynamics Pyramid Model:
• A brand positioning framework that
represents brand development as a
pyramid with five components:
• 1. Core functionality: The products
and services offered by the brand.

• 2. Benefits over competitors: The
brand's advantages over its
competitors
• 3. Desired emotional response: The
emotional response the brand aims to
evoke
• 4. Personality: The brand's
personality
• 5. Essence: The brand's essence

• The Brand Dynamics pyramid is at
the core of the Brandz model, which is
developed by marketing research
consultants Millward Brown and
WPP. The model suggests that
building a brand involves a series of
steps, with each step dependent on
the previous one being successful.

• Similarities between brandz model
and brand dynamics pyramid model:
• The Brandz model and the Brand
Dynamics pyramid model are both brand
equity models that use a series of steps
to build a brand:
• Brandz model
• Developed by Millward Brown and WPP,
the Brandz model uses the Brand
Dynamics pyramid to measure brand
strength.

• The Brand Dynamics pyramid is a sequential
series of steps that brands must accomplish
in order to build their brand. The steps are:
• Presence: Do people know about the brand?
• Relevance: Does the brand offer something
of value?
• Performance: Can the brand deliver on its
promises?
• Advantage: Does the brand offer something
better than its competitors?
• Bonding: Has the brand built a strong
emotional connection with its customers?

• Brand Dynamics pyramid Model:
• The Brand Dynamics pyramid is a
consistent analytical model that can
be used to compare brands across
countries and regions.
• It provides information based on the
characteristics of each market.

• Brandz model (we have already discussed):
• A brand equity model that measures brand
strength based on five factors:
• 1. Presence: Whether the brand is known
• 2. Relevance: Whether the brand offers
something of value
• 3. Performance: Whether the brand can
deliver
• 4. Advantage: Whether the brand offers
something better than others
• 5. Bonding: Whether the brand is unbeatable

The Brand Dynamics
Pyramid Model
• BrandDynamics is a tool that
uses an analytical model to
compare brands or services
across countries.
• It can be used for consumer
brands, business-to-business
services, e-commerce, and the
medical field.

• BrandDynamics provides information
based on the characteristics of each
regional or local market.
• A brand pyramid is a framework that
helps clarify a brand's essence.
• It's a diagram that can help answer
fundamental questions about a brand,
such as who it serves, what its core
values are, and how it should make
customers feel.

• A brand pyramid typically has five
components which are:
• 1. Core functionality:
• The base layer of the pyramid, which
describes the brand's products and
services.
• 2. Rational benefits:
• The second layer, which outlines the
brand's advantages over competitors.

• 3. Emotional benefits:
• The middle layer, which identifies the
intended emotional impact of the
brand.
• 4. Personality:
• The brand's personality.
• 5. Essence: The brand's essence.

• Brand pyramids can help businesses
define their brand's core emotions and
values to inform marketing strategy.
• Based on attitudinal data, the
BrandDynamics Pyramid gives a
graphic representation of the strength
of relationship consumers have with
brand.

Differentiate between Brandz Model and
Brand Dynamics Pyramid Model
• Differences between brandz model
and brand dynamics pyramid model
can be pointed out as folows:
• The BrandZ model is a brand equity
model that uses the Brand Dynamics
pyramid as its core, while the Brand
Dynamics pyramid model is a model
that represents brand development as
a pyramid with five components:

• BrandZ model:
• A model developed by Kantar Millward
Brown that ranks brands based on their
brand equity. The model uses five factors
to measure brand equity: presence,
• relevance,
• performance,
• advantage, and
• bonding.

• Brand Dynamics pyramid model:
• A model that represents brand development
as a pyramid with five components:
• core functionality,
• benefits over competitors,
• desired emotional response,
• personality, and
• essence.
• The model is based on the idea that brand
building is a series of steps that must be
accomplished in order.

The Brand Asset Valuator
(BAV) Model
• The Brand Asset Valuator (BAV)
model is a strategic framework
that measures a brand's value
and strength by assessing how
consumers perceive and relate to
it.

The Brand Valuator (BAV) Model
• The Brand Valuator (BAV) model is
based on four key dimensions which
are as follows:
• 1. Differentiation,
• 2. Relevance,
• 3. Esteem, and
• 4. Knowledge.

• 1. Differentiation: This dimension
measures the distinctiveness and
uniqueness of a brand compared to its
competitors. It assesses whether a
brand stands out and offers
something different or better than
other brands in the market.

• 2. Relevance: Relevance evaluates
the brand's alignment with the needs
and aspirations of its target audience.
• It examines whether the brand is seen
as meaningful, important, and
appropriate to consumers' lifestyles,
values, and preferences.

• 3. Esteem (trust): It assesses the
perceived quality and admiration of a
brand.
• It looks at factors such as the brand's
reputation, reliability, and perceived
value for money. Esteem reflects how
well the brand is regarded and
respected by consumers.

• 4. Knowledge: Knowledge represents
the awareness and familiarity
consumers have with a brand.
• It measures how well consumers know
and understand the brand, its
products, and its values.
• Knowledge encompasses both brand
awareness and brand associations.

Brand Asset Valuation BAV Model

The Brand Asset Valuator (BAV) Model
• The BAV model helps companies
understand their brand's positioning
in the market and its growth
potential.
• It also shows how well a business has
marketed itself in the past.
• The BAV model was developed by
Young & Rubicam, an American
marketing and advertising agency.

• BAV stands for Brand Asset Valuator
and refers to a brand equity model
used to assess and measure the
strength and value of a brand.
• Providing insights into how
consumers perceive and relate to a
brand, it helps companies understand
their brand's positioning in the
market.

The Brand Asset Valuator (BAV) Model
• BAV: Brand Asset Valuator
• It refers to a brand equity model
used to assess and measure the
strength and value of a brand,
to help companies understand their
brand's positioning in the market.
•

How the Brand Asset Valuator BAV works ?
• How the BAV works?
• The BAV model requires brands
to collect and
analyse data through
consumer surveys and research.
Usually, consumers are given
questionnaires designed to capture
their perceptions and attitudes
towards a brand.

• The questionnaires typically include a
series of statements or attributes
related to the four key dimensions
seen above and they are administered
to a representative sample of the
target market or consumer group.
• Consumers are asked to rate the
brand on each attribute using a rating
scale (e.g., Likert scale) or other
appropriate response formats.

Example of The four dimensions of the questionnaire and their distribution

• Once the answers are collected, they
are processed and analysed using
statistical techniques.
• The responses are aggregated and
summarised to derive meaningful
insights about the brand's
performance on each dimension.

The Origins of
The Brand Asset Valuator Model (BAV)
• The Origins of the Brand Asset
Valuator Model (BAV):
• The Brand Asset Valuator (BAV) model
was developed by Young & Rubicam
(Y&R), a global advertising agency.
• Y&R’s inspiration for creating the BAV
was to develop a more holistic and
nuanced approach to measuring brand
value

• . At the time, brand valuation models
focused mainly on financial metrics like
market share, brand awareness, etc.
• But Y&R knew these metrics didn’t tell
the full story.
• Y&R and their clients have been using the
BAV model for years to track and measure
brand value, and it’s been adopted by
many businesses and organizations,
including some of the biggest companies
in the world, universities, and nonprofits.

• . At the time, brand valuation models
focused mainly on financial metrics like
market share, brand awareness, etc.
• But Y&R knew these metrics didn’t tell
the full story.
• Y&R and their clients have been using the
BAV model for years to track and
measure brand value, and it’s been
adopted by many businesses and
organizations, including some of the
biggest companies in the world,
universities, and nonprofits.

Financial Valuation of Brand Equity
• Brand equity valuation is the process
of determining the value of a brand in
financial terms:
• Definition
• Brand equity is the value of a brand
as perceived by consumers, based on
factors like customer loyalty,
recognition, and satisfaction.

• Financial valuation:
• Brand equity valuation can be
expressed as the percentage of a
brand's contribution to a company's
market cap. It can also be measured
using financial metrics like revenue,
profitability, and market share.

• Importance: Brand equity is important
because it can contribute to a
company's stock prices and sales
revenue. It can also help a company
build and manage its potential value.
• Dimensions: Brand equity has four
dimensions:
• 1. brand awareness,
• 2. brand loyalty,
• 3. brand associations, and
• 4. perceived quality.

• Brand equity refers to the customers'
perceived importance of a brand,
while brand value is the financial
value of the brand.
• Both numbers help you understand
how much your brand is worth.
• To determine the brand's value,
companies need to work out how
much the brand is worth in the
market.

Financial Value of Brand (FVB)
• Financial Value of Brand (FVB):
• Definition:
• The financial value of a brand (FVB)
refers to an assessment of a brand’s
total monetary worth at a given
moment in time. Unlike brand equity,
it is only expressed in monetary terms.

• The method chosen for the financial
value calculation or estimate depends
on whether the purpose of the
valuation is to:
– acquire the brand
– sell the brand
– lease the use of the brand, or
– attribute its contribution to monetary
returns.

• The most popular monetary brand
valuation methods are the
• cost approach,
• market approach and
• income approach.

Problems in Brand Valuation
• Some of the key problems or challenges in
brand valuation are as follows:
• 1. Subjectivity: Brand valuation requires
making subjective judgments and
assumptions. Factors such as brand
perception, customer loyalty, and brand
strength can be difficult to quantify
objectively.
• Different experts or valuation firms may have
different perspectives, leading to variations in
valuations.

• 2. Data Availability: Gathering
accurate and reliable data for brand
valuation can be challenging.
• Data on financial performance, market
research, consumer behavior, and
brand-related metrics may not always
be readily available or transparent.
Limited data can affect the accuracy
and reliability of the valuation.

• 3. Brand Dynamics: Brands are
dynamic and can change over time.
Factors such as market trends,
competition, changes in consumer
preferences, and company performance
can influence the value of a brand.
• Valuation models must account for
these dynamics and incorporate
forward-looking projections.

• 4. Contextual Factors: Brand valuation
needs to consider the industry, market
conditions, and competitive landscape.
• Different industries may have unique
characteristics and valuation
approaches.
• The value of a brand may also vary
depending on factors such as geographic
location, target market, and legal or
regulatory environment.

• 5. Lack of Universal Standards:
Unlike financial accounting, there are
no universally accepted standards for
brand valuation.
• Various valuation methodologies and
approaches are used, leading to
variations in results.
• This lack of standardization can make
it challenging to compare and interpret
brand valuations.

•We have
• completed
• unit : 3
•Thank you
•all the students.

Unit 3 Brand Management in the context of Nepal

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