Unit 41-LO4 Evaluate techniques for measuring and managing brand value over time-BTEC-HND-Level 4 & 5

Course: Pearson BTEC Levels 4 and 5 Higher Nationals in Business

There are two primary methods of measuring and managing brand value over time, and they account for the two different types of drivers of brand equity.

Quasi-experimental techniques use moderators or covariates to control for the effect on consumer perceptions that do not reflect changes in inherent quality attributable to a company’s products. Lab experiments provide consumers with identical sets of products before and after the manipulation that measure changes in preference due to motivations elicited through induced affective states.

Also Read: Demonstrate an understanding of how a brand is built and managed over time

Measuring and managing brand value:

Different brand measurement techniques for measuring brand awareness, market share, consumer attitudes, and purchasing intent

Brand awareness can be measured in three ways.

• The first way is through market research to see how many people are aware of the business or product and what they think about it,
• the second measure for brand recognition comes from customer satisfaction surveys that ask customers if they would purchase a similar item again (or recommend one) as well as their thoughts on price point, quality, etc.,
• finally, there are social media that gauges consumer sentiment based on likes/shares.

Share is the percentage of people that know or own the brand.

Consumer attitudes are a measure of their feelings towards the brand: what’s their opinion, what they think about it, and whether or not they would buy it again.

Finally purchasing intent is how likely a consumer is to buy from this company in the next six months. Brand market share ranges between 14% – 106% internationally as per Nielson Market Size Reports. Some examples of brands with high share rates are Nike (106%), Google (98%), McDonald’s (96%), and Coca-Cola (88%).

Brand equity audit and management and brand tracking techniques

Brand equity management or brand tracking can be helpful in knowing what your company is worth by measuring, quantifying, and analyzing the advantages. This helps determine cost-effective ways to invest in marketing and advertising.

Brands are always looking for new ways to promote their products. A company can use social media, such as Facebook or Twitter, to help them get the word out about their product without spending a lot of money on ads. A person with a small business can post content on social media and not have to spend money on other forms of advertising like TV ads or newspaper spreads so they can be successful with little cost.

The relationship between branding and finance

A brand is a financial asset that has value. Companies that have strong brands are worth more money because people trust their products. Brands can also be risky if the company’s products don’t sell well. For example, Nike and Mcdonald’s are both worth a lot of money but they also risk losing it all if their brands go bad or they stop making money.

The concept of brand value and different approaches: cost, market-based and financial-based methods to brand valuation

There are two main approaches to brand valuation – financial-based methods and marketing-based methods. The most popular financial approach is the royalty relief method, which calculates the residual value of an intangible asset (the intangible being a company’s brand identity).

This is calculated by looking at how much profit a company makes from all of the other investments they have in the market. Net income is different from “rebate” because net income takes into account what they get for using someone else’s intellectual property, and “rebate” only includes what they would pay if it was theirs.

For example, if Coca-Cola makes $10 billion on its top product and has to pay $1 billion a year in royalties, then the net economic benefit is only $9 billion per year.

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