Page 279 - Marketing Management

256 PART 4 BUILDING STRONG BRANDS

|Fig. 9.6| Marketing
VALUE Program Customer Brand Shareholder
Brand Value Chain STAGES Investment Mind-set Performance Value
Source: Kevin Lane Keller, Strategic Brand
- Product - Awareness - Price premiums - Stock price
Management, 3rd ed. (Upper Saddle River, NJ:
Prentice Hall, 2008). Printed and electronically - Communications - Associations - Price elasticities - P/E ratio
reproduced by permission of Pearson Education, Inc. - Trade - Attitudes - Market share - Market capitalization
Upper Saddle River, New Jersey. - Employee - Attachment - Expansion success
- Other - Activity - Cost structure
- Profitability

Program Customer Market
MULTIPLIERS
Multiplier Multiplier Multiplier

- Clarity - Competitive reactions - Market dynamics
- Relevance - Channel support - Growth potential
- Distinctiveness - Customer size & profile - Risk profile
- Consistency - Brand contribution

reinforcement and selling effort various marketing partners are put- Sources: Kevin Lane Keller and Don Lehmann, “How Do Brands Create Value,”
Marketing Management (May–June 2003), pp. 27–31. See also Marc J. Epstein
ting forth), and customer size and profile (how many and what types
and Robert A. Westbrook, “Linking Actions to Profits in Strategic Decision
of customers, profitable or not, are attracted to the brand). Making,” MIT Sloan Management Review (Spring 2001), pp. 39–49; Rajendra K.
Srivastava, Tasadduq A. Shervani, and Liam Fahey, “Market-Based Assets and
• The market multiplier determines the extent to which the value
Shareholder Value,” Journal of Marketing 62, no. 1 (January 1998), pp. 2–18;
shown by the market performance of a brand is manifested in Shuba Srinivasan, Marc Vanheule, and Koen Pauwels, “Mindset Metrics in
shareholder value. It depends, in part, on the actions of financial Market Response Models: An Integrative Approach,” Journal of Marketing
Research, forthcoming.
analysts and investors.

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,
marketers need to fully understand (1) the sources of brand equity and how they affect outcomes
of interest, and (2) how these sources and outcomes change, if at all, over time. Brand audits are
important for the former; brand tracking for the latter.
• A brand audit is a consumer-focused series of procedures to assess the health of the brand,
uncover its sources of brand equity, and suggest ways to improve and leverage its equity.
Marketers should conduct a brand audit when setting up marketing plans and when consider-
ing shifts in strategic direction. Conducting brand audits on a regular basis, such as annually,
allows marketers to keep their fingers on the pulse of their brands so they can manage them
more proactively and responsively.
• Brand-tracking studies collect quantitative data from consumers over time to provide consis-
tent, baseline information about how brands and marketing programs are performing.
Tracking studies help us understand where, how much, and in what ways brand value is being
created, to facilitate day-to-day decision making.
Marketers should distinguish brand equity from brand valuation, which is the job of estimat-
ing the total financial value of the brand. Table 9.4 displays the world’s most valuable brands
51
in 2009 according to one ranking. In these well-known companies, brand value is typically over
half the total company market capitalization. John Stuart, cofounder of Quaker Oats, said: “If
this business were split up, I would give you the land and bricks and mortar, and I would take the
brands and trademarks, and I would fare better than you.” U.S. companies do not list brand
equity on their balance sheets in part because of differences in opinion about what constitutes a
good estimate. However, companies do give it a value in countries such as the United Kingdom,
Hong Kong, and Australia. “Marketing Insight: What Is a Brand Worth?” reviews one popular
valuation approach.