SU 5: Measuring Brand Equity And Performance Flashcards
Why is measurement important
Different ways of measuring marketing’s effectiveness is necessary because not measuring a brand’s marketing effectiveness may lead to a misguided assessment of a brands potential performance
What are the three levels for measuring marketing effectiveness
Shareholder value added, linking activities and attributes to outcomes, and micro measurement
Define book value
Difference between a companies assets and liabilities
Define brand
Promise to a customer to deliver what the brand stands for
Define brand equity
The value of having a recognised brand
Define brand value
The financial worth of the brand
Define intangible assets
An asset on the companies balance sheet that is not physical
Define goodwill
Represents the premium paid by the acquirer for a brand or company
Define qualitative analysis
Determines the value of an investment (a brand or shares in a company) by examining its non-numeric characteristics
What are the brand equity measurement methods
Qualitative and quantitative
*Explain the brand equity methods - qualitative
- brand awareness: increased brand awareness results in a positive perception of the brand
- perceived quality: demand and desire for a brand increases when consumers perceive a brand to be of high quality especially when comparing two brands (some people say that Burger King is better then McDonald’s, that’s because they perceive Burger King to be of higher quality than McDonald’s)
- brand associations: it’s about recognition of brand imagery, such as a logo this looks like associating an M with McDonald’s
- brand loyalty: loyal consumers prefer the brand and keep on buying the brand or product (loyalty means repeat purchases by customers)
*Explain the brand equity methods - quantitative
> cost: the amount of money needed to replace or reproduce the brand
- the disadvantage of the approach is that historical costs are a poor indication of replacement costs
> market: market share is the volume and value in comparison with a generic product
- the advantage of the approach is that it is transparent because prices and volumes are available, so external comparison is possible
- the disadvantages that it is a static and assumes that both branded and generic products have the same quality
> income/future earnings: future brand earnings are discounted to a present value
- the advantage of this aproache is that it is widely used and recognized
- the disadvantage is is that it involves complex calculations and subjective inputs
Differentiate between brand valuation and brand evaluation
Brand valuation determines a brand’s value and, brand evaluation determines its level of brand equity
*Differentiate between brand value and brand equity
Brand value is the value of the financial asset on the company’s books, whereas brand equity is the value of the brand in the eyes of the customer
*Explain valuing business assets
It comprises of two main types of assets current assets and capital or non-current assets.
- current assets: these are assets that are expected to provide economic value within 12 months or the next financial year. The main current assets are cash, inventory (stock) and account receivable (debtors).
for pick n pay this looks like their physical goods in stores and at the warehouse and the people that owe pick n pay
- capital assets also known as fixed or non-current assets, they represent the fixed investments of the business (they do not vary with the level of business activity) capital assets are long-term assets and tend to relate to infrastructure either physical such as property and equipment or intangible such as patents and rights.
pick n pay warehouses and distribution fleets are capital assets, its IT systems and trademarks are intangible capital assets
