Brand Equity

Introduction
• Brand: A brand is a name, term, sign, symbol or design, or a combination of them, intended to
identify the goods or services of one seller or group of sellers and to differentiate them from those
of competitors.
• Branding: Branding is endowing products and services with the power of the brand.
• Brand Equity:
• In the field of marketing, Brand Equity means the value of a brand. 
• Brand equity is the added value endowed on products and services, which may be reflected in the
way consumers, think, feel, and act with respect to the brand.
• Brand equity refers to the perceived value of a company or product based on its reputation among
customers and consumers as well as its assets beyond mere revenue. 
• Positive equity is always a good thing. It means that company has built up assets that it can later
convert to cash if necessary.
• Brands are seen as the major enduring asset of a company, outlasting the company's specific
products and facilities.
 Introduction
• A great example of brand equity lies in the endless battle between Apple and
Microsoft.
• The two companies consistently wage war over market share.
• Microsoft, so far, has won every time. But that doesn’t necessarily mean that it has
more brand equity.
• Apple users are always quick to spend money when the company releases a new
product.
• If you are an Apple fan and you own an iPhone that works perfectly well, you might
buy the new version the moment it’s released because of your brand loyalty.
• This isn’t always true for Microsoft.
• Microsoft has more market share, but Apple’s market is more devoted and more
willing to spend money.
 Brand Equity Models
1. BAV MODEL (BRAND ASSET VALUATOR)
2. DAVID AAKER’S BRAND EQUITY MODEL 
3. BRANDZ MODEL
4. KELLER’S MODEL
 Brand Asset Valuator Model (BAV MODEL)
• Brand Asset Valuator (BAV) is a metric applied for the measurement of brand value of an entity.
• Brand Asset Valuator was developed by an agency called “Young and Rubicam”.
• BAV measures a brand under the 2 broad heads of:
1. Brand Vitality which refers to the current and future growth potential that a brand holds in it.
2. Brand Stature which refers to the power of a brand.
• Both of these heads can be further divided to have the following parameters for judging the
brand:
• Brand Vitality-Comprises of 1) Differentiation and 2) Relevance
• Brand Stature-Comprises of 1) Esteem and 2) Knowledge

Dictionary definition:
Stature-Importance, Reputation, Status, Rank
Vitality-Energy, Strength
 Brand Asset Valuator Model (BAV MODEL)
1. Differentiation: It is the ability of a brand to stand apart from its competitors in terms of
momentum and leadership. A powerful driver of curiosity, advocacy and pricing power.
Differentiation has three constituents to it. These are
Different-refers to how do the brand’s offering differs from its rivals.
Unique- refers to the brand’s quality and carries the essence of its existence. It has more to
do with the credibility, authenticity and originality of the idea that the brand carries.
Distinctive-refers to the worthiness of a brand.
2. Relevance: This refers to how closely can the consumers relate to the brand’s offering and
is a significant driver for a brand’s penetration.(Personal Appropriateness of brand to the
consumers. It drives brand’s consideration and trial)
3. Esteem: This refers to the consumer perception about the brand, i.e. brand reputation
and respect. Whether a brand is popular or not, whether it delivers on its stated
promises- all this contribute in building up the esteem of the brand. This leads to trail and
commitment. (Quality and popularity-both of which vary by country and culture)
 Brand Asset Valuator Model (BAV MODEL)
4. Knowledge: This refers to the degree of awareness about a brand & its identity in the
minds of its consumers. The depth of understanding people have of a brand – both its
positive and negative information. This is very important in building a brand and making the
consumers understand of what the brand actually stands for and its implicit message to the
consumers.
Brand Asset Valuator Model (BAV MODEL)
 Brand Asset Valuator Model (BAV MODEL)
• One of the most important key factors to consider in analysing any brand value is
about its consumer awareness.
• When you examine a product, you go through all aspects of how it’s made in the
factory; whereas in brand it is how it’s bought by the customer; a product is
something which can be easily copied by its competitor, a brand holds a unique
position into the heart and minds of its consumers.
• A product can easily get faded however, a brand is everlasting.
• The BAV also helps to evaluate where a brand stands and how to cope up with other
competitors in order to formulate different strategies accordingly.
• The BAV is considered to be a helpful tool to determine the brand’s relationship with
its company, the consumer group and the demographic segments that reverberates
at its best with the brand and the celebrity who’s ideal for endorsing the brand.
 Brand Asset Valuator Model (BAV MODEL)
• The BAV constructs a Power Grid that’s plotted as Emerging Brands,
Power/Unrealized Potential of a Brand, New/fading brands and Eroding brands.
• On the vertical axis, the Brand strength is plotted i.e. Differentiation and relevance.
• On the horizontal axis, Brand stature is plotted i.e. Esteem and knowledge.
• The Power Grid helps out in differentiating a brand’s strength and weaknesses, it
predicts the growth prospects of a brand as whether it’s able to establish itself
successfully in the market or erosion may cause the brand to lose its mark
 Brand Asset Valuator Model
NEW OR UNFOCUSED OR UNKNOWN
Build Awareness and Traction. Must define a clear point of
view.

NICHE OR UNREALIZED POTENTIAL

MOMENTUM LEADERSHIP
High Earnings. High Potential.

MASS MARKET
High Earnings. Low Potential.

COMMODITY OR ERODED
Seriously challenged, hanging on.

https://www.bavgroup.com/about-bav/brandassetr-valuator
 Brand Asset Valuator Model

https://www.bavgroup.com/about-bav/brandassetr-valuator
 David Aaker’s Brand Equity Model
• Aaker Brand Equity model was developed by Professor David Aaker of the
University of California.
• His model viewed the brand equity as a combination of brand
awareness, brand loyalty and brand associations, which then combine with
each other, to finally offer the value provided by a product or service.
• For Aaker, brand management begins with building up a brand identity, which
is one of a kind arrangement of brand affiliations speaking to what the brand
stands for and offers to consumers a desiring brand picture.
 David Aaker’s Brand Equity Model
• Aaker states that brand value is controlled by associated five components.
• This is essential for understanding the general picture of brand equity.
• These components are:-
• Brand Loyalty – The extent to which people are loyal to a brand
• Brand Awareness – The extent to which a brand is known among the public
• Perceived Quality – The extent to which a brand is considered to provide good
quality products
• Brand Associations – The associations triggered by a brand
• Other Proprietary – Assets like patents and intellectual property rights, relations
with trade partners. The more proprietary rights a brand has accumulated, the
greater the brands competitive edge in those fields.
 David Aaker’s
Brand Equity
Model

http://www.simplynotes.in/mbabba/a
akers-brand-equity-model/
 Brandz Model-Measuring Brand Equity
• 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 brand Dynamics model understands the brand
strength based on “customer level” in a pyramid.
• The Brandz model distinguishes customers based on
their reach on the pyramid.
• According to this model, brand building involves a
sequential series of steps, where each step is
contingent (or dependent) upon successful
accomplishion of the previous step.
 Brandz Model-Measuring Brand Equity
• The objectives at each step, in ascending order, are as follows:
• Presence: Do I know about it? Awareness of brand promise.
• Relevance: Does it offer me something? How far product is relevant to customer needs .
• Performance: Can it deliver? Customer believes that product delivers what is expected.
• Advantage: Does it offer something better than others? Particular brand is preferable
than others.
• Bonding: Nothing else beats it. Emotional attachment with the brand and exclusion of
others.
• 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.
 Brandz Model-Measuring Brand Equity
• Advantages:
• Brandz provides a proven diagnostic and predictive tool that evaluates the
strength of brands and can relate it to future changes in the market share.
• They Brand Dynamics Pyramid quantifies the extent to which a brand has
converted consumers into a pool of bonded or loyal and committed consumers
(helping companies identify how many loyal customers they have)
• Disadvantage:
• The model is based on Customer-based brands and not so much focus on
Business-Business (B2B)
Branz-Top 10 Brands in 2020

Source: https://www.theautochannel.com/news/2020/06/30/827931-brandz-top-100-most-valuable-global-brands-2020.html
 KELLER Model (Customer –Based Brand
Equity ) Brand Resonance Pyramid
• The Brand Resonance refers to the relationship that a consumer has with the product and how well
he can relate to it.
• The brand resonance model also views brand building as an ascending series of steps, from bottom
to top:
• (1) Brand Identification: (Who are you?) Ensuring customers identify the brand and associate it with
a specific product class or need;(i.e. creates awareness about the product and establish an
association in the minds of customers with respect to its usage and the segment for which it exists.)
• This is how customers look at your brand and distinguish it from others. It’s the most important
stage and must be strong to support the rest of the pyramid above it. Brand identity builds when
customers start off unaware of your products and values, then you can attract them with ad
campaigns and targeted marketing that increase awareness.
• This Brand Salience means, how well the customer is informed about the product and how often it is
evoked under the purchase situations? The marketer should not only focus on just creating the
awareness about the product but also includes the ease with which the customers can remember
the brand and the ability to recall it under the different purchase situations.
 KELLER Model (Customer –Based Brand
Equity ) Brand Resonance Pyramid
• (2) Brand Establishment : (Brand Meaning)-What are you?
• Firmly establishing the brand meaning in customers’ minds by strategically linking a host of tangible and
intangible brand associations.
• When customers become aware of your brand, they’ll want to know more about it. Do its features work
well? Is it reliable? Does it look good? Is the customer service good? Is it value for money?
• Brand Establishment is divided into two:
• Brand performance: when a brand ‘does what it says’ and performs well over time, it will be loved and
trusted (e.g. Miele, Apple, Microsoft, Virgin).The Brand performance means, how well the functional needs of
customers are met? At this level of the pyramid, the marketers check the way in which product is performing
and how efficiently it is fulfilling the needs of the customers.
• Brand imagery: What does the brand appear to be to customers?
• The Brand Imagery means, what product image the customer create in their minds?
• This aspect deals with the customer’s psychology or the feelings that how they relate to the product in terms
of their social needs. E.g.: Land Rover must appear rugged, but Kleenex must appear soft, and this
messaging must come out in targeted marketing.
 KELLER Model (Customer –Based Brand
Equity ) Brand Resonance Pyramid
• (3) Eliciting Response (what are the customer’s feelings for the brand?):
• Eliciting the proper customer responses in terms of brand related judgment and feelings
(i.e. what customers feel about the brand?), and
• Once a customer has bought the brand, does it live up to the hype and expectation for
them?
• Brand Judgements: The Brand Judgement means What customer decides with respect to
the product? The customers make the judgment about the product by consolidating several
performances and the imagery associations with the brand. On the basis of these, the final
judgment is made about the product, in terms of, its Perceived Quality, Credibility,
Consideration, and Superiority.
• Brand Feelings: The Brand feelings means, what customers feel, for the product or how
the customer is emotionally attached to the product? The consumer can develop emotions
towards the brand in terms of fun, security, self-respect, social approval, etc.
 KELLER Model (Customer –Based Brand Equity )
Brand Resonance Pyramid
• If they love the product, they have feelings for it, and they’ll tell friends, family and social
media to buy one. They start becoming brand advocate. If they’re disappointed with their
purchase, their judgment of it will be negative and they won’t buy another one, and may
criticise it widely. They become a brand detractor.
• Companies need to address judgments and build positive feelings at this level.
• 4) Relationship: Converting customers’ brand response into building the customer’s strong
relationship with the brand, i.e. to an intense, active loyalty.
• The Brand Resonance means, what psychological bond, the customer has created with the
brand?
• When a customer loves a brand so much they would not consider buying another one,
feels a relationship with it and a connection with other buyers, they are that very rare and
precious thing: a brand advocate.
 KELLER Model (Customer –Based Brand
Equity) Brand Resonance Pyramid
• Harley-Davidson is a powerful example of this: two Harley bikers in a parking lot may be
strangers, yet instantly feel a connection and have something to talk about. And they
would never consider buying another bike brand.

• In order to accomplish these four pre-requisites for creating the brand equity, the Six
brand building blocks need to be followed that are arranged in a pyramid-like structure
called as Brand Resonance Pyramid.
KELLER Model
(Customer –
Based Brand
Equity) Brand
Resonance
Pyramid
KELLER
Model
(Customer –
Based Brand
Equity) Brand
Resonance
Pyramid
 KELLER Model (Customer –Based Brand
Equity) Brand Resonance Pyramid
• The purpose of the Aaker Model is to help in creating a brand strategy
consisting of different brand elements or patterns, so as to clarify,
enrich and differentiate a brand from its competitors.
• An organization carefully employs several of these elements to
communicate to the consumers what their brand stands for.
 Brand Equity Measurement
• Brand equity is different from brand valuation.
• Brand equity is the job of creating brand value.
• Brand valuation is the measurement of brand equity in financial terms.
• The measurement and ranking of brands is a complex task and hence tough to define
and specify the parameters.
• There are varieties of measurement methods and often they differ on ranking of most
values brands.
• Interbrand (https://www.interbrand.com/thinking/best-global-brands-2020-download/ )measures brand equity
every year to rank Indian best brands.
 Measurement of Brand Equity
• 1. Financial analysis: This measures the financial performance of the brand in terms of
economic profit. Economic profit is the after-tax operating profit of the brand minus a
charge for the capital used to generate the brand’s revenues
• 2. Demand analysis: This measures the role of brand in purchase decision relative to
other factors such as price, features, convenience etc. The Role of Brand Index (RBI)
quantifies this as a percentage. Customers rely more on brands to make choices when
competing products cannot be easily compared.
• 3. Competitive analysis: This measures the competitive strength of the brand; where
brand loyalty attracts more demand and profit into the future. Brand strength is scored on
a scale of 1 to 100, based on an evaluation across ten key factors that Interbrand believes
make a strong brand.
• The strength of the brand is inversely related to the level of risk associated with the
brand’s financial forecasts. A formula is used to connect the brand strength score to a
brand-specific discount rate.
How Is it Measured?
Top Ten-2020:
• #1. Apple retained its top spot in the table
• #2. Amazon was a top performer, increasing brand value
by 60%, with a valuation of US$200,667m.
• #3. Microsoft's increase in value this year
(US$166,001m) means it has overtaken Google (#4) to
reach the number 3 spot.
• #4. Google has moved out of the top three for the first
time since 2012.
• #5. Samsung (US$62,289m) has broken into the top five
for the first time ever.
• The remainder of the Top 10 comprises: #6 Coca-Cola
(US$56,894m), #7 Toyota (US$51,595m), #8
Mercedes-Benz (US$49,268m), #9 McDonald's
(US$42,816m) and #10 Disney (US$40,773m). The top
ten brands accounts for 50% of the total table value
this year.
• Amazon, Spotify and Netflix Are Among the Biggest
Risers in Ranking Amid Global Covid Lockdowns.
• New entrants for 2020 include Instagram (#19),
YouTube (#30) and Zoom (#100);
• Re-entrants include Tesla (#40) and Johnny Walker
(#98)
 David Aaker’s Brand Equity Model
• Aaker primarily sees brand identity as a combination of 8-12 elements which fall under four
perspectives:
• Brand as Product – This consists of product scope, product attributes, quality or value of the
product, uses, users and country of origin.
• Brand as Organization – it consists of organizational attributes, local workings versus
global activities.
• Brand as Person – it consists of brand personality and consumer brand relationships.
• Brand as Symbol – it consists of audio and visual imagery, metaphorical symbols and brand
heritage.
• The motive of the Aaker Model is to help in making a brand strategy comprising of various
brand components or patterns, in order to illuminate, advance and separate a brand from
its rivals.
• An organization deliberately utilizes a few of these components to impart to the buyers what
their brand stands for.