Measuring Corporate Brand Equity in WB 270410 2

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Measuring Corporate Brand Equity in Winning Brands

Filename: Measuring Corporate Brand Equity in WB (270410)Released on April 27, 2010

IMPORTANT! FOR INTERNAL USE ONLY

Measuring Corporate Brand Equity in WB

April 27, 2010

Confidential & ProprietaryCopyright © 2010 The Nielsen

Company

PrefaceA corporate brand can be define as an overarching brand used across multiple products or categories.

Typically, a corporate brand is used to enable the product brands to leverage on its equity, gain economies of scope and facilitate new product acceptance. Hence, it is not uncommon for brands to measure their corporate brand equity as it determines the “extendibility” of the brand.

Nonetheless, for the purpose of identifying the most appropriate approach, we have further define the difference between:

Corporate EquityCorporate Brand EquityParent Brand Equity

This is outlined in subsequent slides.


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Comparison of Approaches – Nielsen’s Definition

Corporate Equity Corporate Brand Equity

Parent Brand Equity

Definition

Corporate equity is all encompassing. It takes into account the response of all key stakeholders i.e. customers, employees, trade partners, media, stock markets and general public.

Corporate brand equity is a component of corporate equity. It focus solely on the marketing/brand aspect and end-users’ perception.

Parent brand equity is the ‘combined’ equity of sub-brands or variants* of the same product or category*.

Examples of brands

Sony Bravia (TV), Sony VAIO (Notebook/PC), Sony PlayStation (Video Game Console), Sony Cyber-Shot (Camera), etc. which are marketed under the SONY brand across categories.

Classic Coke, Cherry Coke, Vanilla Coke, Diet Coke, Coke Zero, etc. which are COKE’s sub-brands/variants in the Carbonated Soft Drinks category.

* Refer to Appendix 1


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Comparison of Approaches – Outcomes & Drivers


Parent Brand Equity

Equity Outcomes

Level of trustRecommend to work/invest/use Interest to follow their progressWillingness to use their products/services

Favorite brandRecommended brandWillingness to pay price premium

Equity Drivers

FamiliarityVision & LeadershipBusiness ConductFinancial HealthEmployee RelationsProduct & Service QualityCustomer focus Social & Environmental Responsibility

AwarenessConsideration Brand associations (Imageries)


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Comparison of Approaches - Study Design


Parent Brand Equity

Type of Study

Corporate Equity Study

Part of a Winning Brands Study

Part of a Winning Brands Study

ResearchObjectives

To measure corporate equity across a competitive set To determine outcomes and drivers of equity across stakeholders

To determine the equity of own corporate brand and interactions with product BEIs

To gauge parent BEI


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Nielsen’s Corporate Equity Model


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Attitudinal andBehavioral Outcomes

Attitudinal Drivers

Corporate Equity Index

Product and service quality** Recommend to:

work invest use

TrustVision and leadership

Employee relations*

Financial health

Customer focus**Social and

environmental responsibility

Familiarity

Business conductWillingness to

use their products/servic

esInterested to follow their

progress

Page 7

* This factor may be appropriate only for a study involving an Employee audience** Depending on the corporate business activities, these two factors could be combined

Measuring Corporate EquityThe recommended approach to measure corporate equity is the Corporate Equity Model shown below. Please contact Jacqueline Lew for more details.

mailto:[email protected]


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Winning Brands – Corporate Brand Equity


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Measuring Corporate Brand Equity The Corporate Brand Equity Index is computed at the respondent level. There are two ways to calculate the index, using the questions below:

Method 2 is recommended if most of the target respondents have not used all services/products within the category. Typically, in non-FMCG categories such as finance, automotive or durables.

The Product BEI is calculated as we typically do (Method 1 above).

CORPORATE BEI Method 1 Method 2Emotive Loyalty Favorite – Single

answerLikeability – 5-point scale

Recommendation – Single answer

Recommendation – 5-point scale

Willingness to pay Price Premium

Price Premium – 6-point scale

Price Premium – 6-point scale


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Understanding the Interactions between Corporate and Product Equity

Once the Corporate BEI and Product BEI are determined, we can examine:1) Relationship between product and corporate equity2) Implications for strength of relationship and

equity between corporate and product 3) Halo impact of corporate equity and strength of

product brands4) Brand positioning and source of interactions

between the corporate and product brands


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1) Relationship between Product BEI & Corporate BEIWe will establish the relationship between product and corporate brand equity using correlation analysis as shown in the example below:

0.40

0.45

0.49

0.51

0.54

0.60

Sony α DSLR

Sony VAIO

Sony W alkm an

Sony Cybershot

Sony Handycam

Sony Bravia

SONY

Prod

uct Br

and

Equi

ty

Corporate Brand Equity

Among the categories covered, the Sony corporate brand is most strongly associated with Bravia (flat TV), Handycam (DV) and Cyber-shot (DSC). Hence, corporate advertising/PR and multi-brand advertising would benefit Sony the most in these categories. It is important for Sony to perform well in these categories to maintain their corporate image.On the other hand, Sony VAIO and Sony α DSLR would require support/marketing activities more specific to their own categories.

BEI of 4.0


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2) Implications for Strength of Relationship and Equity between Corporate and Product

α DSLR

HandymanCybershot

Walkman

Bravia

VAIO

0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.65

0.70

3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5

Corr

elatio

n Sc

ores

Brand Equity Index

Emphasize & maintain both corporate & product

equity

Improve product equity to minimize negative implications on corporate brand

Emphasize & maintain product equity. Marketing

support should be category specific.

Improve equity of product category


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3) Determining the Halo Impact of Corporate BEI The following method is recommended to determine and ‘remove’ the halo impact of the Corporate BEI on Product BEI.

Assuming the Product BEI is 4.0 and the correlation is 0.7, the Halo Impact is 4.0*70% = 2.8 i.e. 70% of the product equity of 4.0 is contributed by the corporate brand equity. Subsequently, we remove the halo impact by deducting 2.8 from the product BEI of 4.0 i.e. 4.0 – 2.8 = 1.2 as shown below:

Brands Product BEI

Correlation Score

Halo Impact (DO NOT SHOW)

Product BEI after

Halo Impact is Removed

Sony Product X 4.0 0.70 2.8 1.2


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Brands Product BEI

Correlation Score

Halo Impact (DO NOT SHOW)

Product BEI after Halo

Impact is Removed

Sony Handycam 5.9 0.54 3.2 2.7

Sony Cybershot 5.2 0.51 2.7 2.6

Sony Bravia 4.0 0.60 2.4 1.6

Sony Walkman 4.3 0.49 2.1 2.2

Sony αDSLR 4.9 0.40 1.9 2.9

Sony VAIO 3.3 0.45 1.5 1.8

3) Strength of Product Brands

In this example, we see that the halo is strongest for Handycam and Bravia. However, α DSLR is has the strongest product equity indicating that users value it’s product features and are less affected by its corporate branding.


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Willing to recommend to others

Leader in electronics productsBest quality

Proud of being its owner

Good reputation

Stands for most advanced technology

Professional

Beloved by youngstersTrendy

Provides much more fun

Feel affinityEasy to use

Good customer service

Social responsibility

Value for money

Innovative

Axis 1 56.7%

Axis 2 25.6%

Fun & Trendy

Hygiene/Mainstream

Personal image/Non-mainstream

Technology

4) Brand Positioning - Source of InteractionFinally, we can run a Correspondence Map to determine which associations are shared between the corporate and product brands, and which ones are unique to each of them.Please see ‘Notes Page’ for the commentaries and diagnosis of this slide.

SONY CORPORATE

Sony α DSLR Sony Handycam Sony Walkman

Sony Bravia

Sony VAIO

Sony Cybershot


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Winning Brands – Parent Brand Equity


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Measuring Parent Brand EquityIf the client is interested in measuring the parent brand equity, we must ask the BEI questions (favourite, recommend and price premium) for all the brand’s key sub-brands/variants and then, infer the scores to estimate the parent brand’s score. The following approach is used:

Favourite = Maximum of sub brandsRecommend = Maximum of sub brandsPrice Premium = Average of sub brands

The recommend and favourite measures for the parent brand are inferred from the maximum of all sub-brands. So if any of the sub-brands were a respondent’s favourite then parent brand itself would be considered favourite. The same applies for recommend. However, taking the maximum of the sub-brands for the price premium question seems less intuitive because of the length of the price premium scale, so using the average score for price premium amongst the sub-brands is preferred.

Note that sub-brands/variants are not SKUs (e.g. Coke 375mL). We should not ask the BEI questions at the SKU level. Further details of how this is done is available in our Winning Brands WatchBuilder. Please contact your country’s SCA colleague for details.

* Refer to Appendix 1


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Appendix 1 - DefinitionsCategory = This is a name given to a class of products or services that serves a purpose that is very similar to each other. Examples of category include Carbonated Soft Drinks, Instant Coffee, Shower Liquid, Cough Medication, Pet Dogs and Audio-Visual products. Every brand operates within the context of a category.

Sub-category = Types of products within the category that may substitute or complement each other. Examples of sub-categories within:

Carbonated Soft Drinks category includes colas, lemon flavored, orange flavored, etc.Shower Liquid category includes whitening, anti-bacterial, etc.

Mega-category = This is a name given to a class of categories that serve a common purpose. Examples include Beverages, Personal Care, Over-The-Counter Pharmaceutical products, Pets and Consumer Electronics.

Brand = Refer mainly to the Parent/Main Brand such as Coke, Nescafe, Palmolive, Colgate, etc.

Variant = Refer mainly to the Sub-brand such as Vanilla Coke, Cherry Coke, Nescafe Gold Blend, Palmolive Naturals, Colgate Herbal, etc. not flavors

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Thank you

We appreciate any questions, comments or feedback that you may have. Please contact Jacqueline Lew (mailto: [email protected]).

mailto:[email protected]

Measuring Corporate Brand Equity in WB 270410 2

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