Brand Asset Valuation

 

Brand Asset Valuation

According to the BAV model, it’s important to measure how differentiation, relevance, esteem, and knowledge relate to one another so you can determine your brand strength and stature. Here are the most important dynamics to note:

  • Differentiation is higher than relevance.When your brand is different, consumers are curious as to why and want to learn more. This can attract customers, get them to explore the brand, and find out if it is relevant to them.
  • Relevance is higher than differentiation.When your brand is more relevant to consumers than it is differentiated from other brands, your brand is no longer interesting or pulling in consumers. You are now competing on relevance alone, which means that consumers will only purchase your product or service based on price or convenience.
  • Esteem is higher than knowledge.When consumers hold your brand in high esteem, they respect and desire your brand because it is so well regarded. Consumers want to purchase your product or service to find out why it garners consumer loyalty.
  • Knowledge is higher than esteem.When consumers claim to already know all about your company, this can lead to problems, especially if they believe they know negative things about your brand. Consumers who think they don’t need to learn anything else about your brand have already judged it—and this means they may be looking to learn more about your competition and less about you.

The Power Grid

Y&R plots brands on a ” Power Grid ” reflecting each brand’s Strength and Stature.The Power Grid sets the strategic process by identifying the strength or weakness of a brand. On the vertical axis we plot the brand strength – its relevance and differentiation, while on the horizontal axis, the brand stature -esteem and knowledge.

Brand Strength

Brands must possess both differentiation and relevance to be strong(Disney, Britannia, Hallmark)

Brand Stature

This strategic indicator is a combination of Esteem and Knowledge and reflects current brand performance(BPL, Pepsi).Esteem increases before knowledge for chocolates, soft drinks and other impulse-purchase products.

Further diagnostic information can be obtained from a stature-by  strength diagnostic framework termed a power grid, as shown in the figure below:

 

The Power Grid sets the strategic process by identifying the strength or weakness of a brand. On the vertical axis we plot the brand strength – its relevance and differentiation, while on the horizontal axis, the brand stature -esteem and knowledge.

Brand Stature

Quadrant I: Weak brands that could not leverage their strengths.

Quadrant II: Here the brand managers have not been able to realize the true potential of the brand. The strategy should be to build the stature of the brand.

Quadrant III: The challenge for the brand here would be to continue being a leader.

Quadrant IV: The last quadrant spells “Danger” for the brand, an indicator of eroding potential.

These brands have failed to maintain their Relevant Differentiation (their core strength). If unattended, their Stature will also begin to fall. Unless steps are taken to stimulate the differentiation and relevance, these brands will lose Esteem and could eventually fade from consumers’ consciousness.

The value of a brand depreciates if there is no continuous value addition. This is critical for the brand to be a source of competitive advantage. The task of a marketer is to go beyond measuring and leveraging the value of the brand and add perceptible value continuously.

Brand Asset Valuation

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