Now that we understand how brand equity is built, we must consider how it can best be measured. Measuring brand equity using brand research and performance tracking will allow your organization to maintain and leverage your brand equity and ensure it is growing over time. In a previous blog we discussed 4 Tips for Measuring Brand Perception/Equity. But beyond those more specific tips, what are some additional best practices?
1. Measure brand knowledge
Brand knowledge is a key driver of brand equity, so it's important to measure this factor. Brand knowledge is not the facts about the brand, but rather all the thoughts, feelings, perceptions, images and experiences that become linked to the brand in consumers’ minds. Two important components of brand knowledge are brand awareness and brand image.
Brand awareness is characterized two ways: depth and breadth. The depth of brand awareness refers to the likelihood that the brand can be recognized or recalled. The breadth of brand awareness refers to the variety of purchase and consumption situations in which the brand comes to mind.
Brand image is defined as consumer brand perceptions and preferences reflected by various types of brand associations held in consumers’ memory. Strong, favorable and unique brand associations are critical sources of brand equity that help drive consumer behavior.
2. Employ multiple measurement techniques
Because any one measure typically captures only one particular aspect of brand knowledge, multiple measures should be employed to provide a multi-dimensional view of brand knowledge. For example, brand awareness can be assessed through a variety of aided and unaided memory measures that can be applied to test brand recall and recognition.
3. Include both qualitative and quantitative techniques
Qualitative research techniques are often employed to identify possible brand associations and sources of brand equity. Qualitative research is often a useful "first step" in exploring consumer brand and product/service perceptions because it allows researchers broad latitude in probing as well as offers participants great freedom in their responses.
Although qualitative measures are useful in understanding a wide array of brand associations, a quantitative study is more desirable for the creation of confident strategic and tactical strategies. Brand knowledge factors best measured using quantitative techniques include brand awareness, recognition, recall, image, performance and judgments like quality and creditability.
Successful brand management requires a keen understanding of exactly how consumers think, feel, and act towards brands. This requires the performance of regular and ongoing brand equity measurements to ensure your brand's equity is growing in a positive direction. Additionally, multiple techniques and measures should be employed so a variety of various brand equity sources and outcomes are included. Resist the temptation to employ a one-dimensional approach to measuring brand equity – e.g., using only one method or metric – so your organization can acquire robust brand equity intelligence.
Strategic Marketing Services has conducted numerous custom brand research studies to help clients measure brand equity. Contact us to discuss your organization's brand equity intelligence needs and one of our experienced project managers design a research plan for your unique situation.
All business professionals agree having positive brand equity is an important asset, but how does an organization actually build brand equity? In previous blogs we defined brand equity and identified the 5 stages of brand experience. Now, let's take a look at 5 key ways you can build positive brand equity.
1. Differentiation
Building brand equity through differentiation
involves offering unique benefits that other brands in the market do not provide at all or do not provide well. This is the most important thing a brand can deliver. Relevant differentiation today is a leading indicator of future profitability and market share. However, building brand equity with differentiation requires an organization to focus on brand positioning and invest in marketing to communicate differentiators effectively. Specifically, you must consider whether your brand owns consumer-relevant, consumer-compelling benefits that are unique and believable.
A great recent example of building brand equity using differentiation is the Mac vs. PC ads. These advertisements clearly and effectively communicate the unique benefits offered by Apple's Mac product line as compared to PCs.
2. Value
Utilizing value to build brand equity requires consumers to believe your product or service adds enough value to be worth the price and effort of acquiring it. More specifically, this means your brand must be easily accessible and priced accurately based on the brand experience. Consider whether your brand delivers a good value for the price or if consumers believe it is worth the price. Regardless of whether it is expensive or inexpensive, high end or low end, it must deliver at least a good value.
3. Performance
Performance-based brand equity involves a brand meeting consumers' expectations based on their perceptions. In other words, consumers must believe the brand will live up to its communicated brand promise across all business areas such as service, pricing, warranty, etc. A great example of successfull performance-based brand equity is Toyota. This company was able to survive recent recall issues based on their high and consistent performance-based brand equity. Consumers continued to believe in Toyota's brand promise and that the company would make things right in the present as well as continue to meet future expectations.
4. Emotional Connection
Building trust through experiences over time leads consumers to develop an emotional connection with a brand. First, the consumer must know your brand. Second, a consumer must like your brand. Finally, the consumer must trust your brand and feel an emotional connection to it. Keep in mind consumers often develop emotional connections as a result of performance.
There are many innovative ways to achieve this emotional connection---from advertising and the quality of front line consumer contact to consumer membership organizations and company-sponsored consumer events.
5. Engagement
Engagement brand building takes consumers' emotional connection one step further where they experience the brand with other consumers. When this occurs a brand reaches another level of success, often referred to as a cult brand or true relationship brand. Brand enthusiast communities are very powerful and can have a strong impact on a brand's sales, word-of-mouth marketing and ultimately brand equity. Iconic examples of brands that have reached this level of consumer engagement include Harley Davidson and Apple.
Regardless of how your organization builds positive brand equity, you must remember it is an ongoing effort. It's also important to continually monitor and measure your brand's performance. Measuring brand equity will help your organization maintain, build and leverage brand equity as you move forward. We'll look at the specifics involved in measuring brand equity in our next blog.
If you would like more information about building and measuring brand equity, please contact Strategic Marketing Services. One of our experienced project managers would be happy to discuss your organization's brand challenges and offer a custom market research solution that will deliver the business intelligence you need to employ the appropriate business strategy.
Strategic Marketing Services recently 
awarded a prize of a $10,000 market research project to Hal Hudson of MockWall Systems LLC at the 2012 EntreFest! MockWall Systems is located in Mason City, Iowa and creates full scale, reusable cardboard mockups of construction projects during the design phase. This allows users to participate in the design experience and to simulate activities within that space before commiting to final design and construction. By experiencing a prototype prior to construction, MockWall Systems gives customers a better understanding of the product they plan to order, thereby reducing change orders after construction has begun. MockWall is a young company—launched in 2011—and their innovative wall system has a patent pending.
Strategic Marketing Services will assist MockWall Systems in new market development by conducting a representative market assessment. This assessment will focus on determining the product's value and acceptance, as well as identifying attractive target market segments.
Strategic Marketing Services works with businesses of all shapes and sizes. Contact us to discuss your organization's unique marketing challenges with one of our highly skilled and experienced project managers.
Brand equity is usually the result of brand loyalty, which leads to increased market share. So if positive brand equity is the goal, how do you work backward from brand loyalty? Let's take a closer look at the 5 stages of brand experience that lead to positive brand equity.
1. Brand awareness
Brand awareness simply refers to how many people know your brand, and is often the result of the brand's marketing communications. Usually awareness is measured through studies that ask participants a series of questions like “What brand comes to your mind if you want to buy coffee?" In general, companies measure unaided brand awareness, i.e., what percentage of study participants mentioned the brand without any kind of hint.
2. Brand recognition
Brand recognition is the extent to which a brand is recognized for stated brand attributes or communications. In some cases brand recognition is measured by aided recall or extent to which a brand name is recognized when prompted with the actual name. A broader view of brand recognition is the extent to which a brand is recognized within a product class for certain attributes. Logo and tagline testing can be seen as a form of brand recognition testing.
3. Brand trial
Brand trial is related to first time, first-hand brand experience, whether or not it involves a purchase. The most common factors influencing brand trial are product sampling combined with recommendation, and spontaneous purchase.
4. Brand preference
Brand preference is the time period in which a consumer will choose a particular brand in the presence of competing brands, but will accept substitutes if that brand is not available. During this period, consumers typically become repeat purchasers and start developing emotional connections to the brand.
5. Brand loyalty
Brand loyalty is influenced by a complex array of attitudes, behaviors and customer experiences, but ultimately comes down to one factor: trust. Brand loyalty is the customer's trust in the brand or company to repeatedly deliver on its promise to the customer. As loyalty increases so do emotional connections to the point that there is no adequate substitute for the brand in the mind of the consumer.
It is important to keep in mind that your work isn't done once consumers reach the brand loyalty stage. The challenge is not merely building brand equity that inspires brand loyalty, but also sustaining your brand loyalty and equity for years to come.
Is your organization just getting started with the 5 stages of brand experience? If so, Strategic Marketing Services can help. Contact SMS to speak to one of our highly skilled project managers to learn more about building positive brand equity.
Building brand equity is an integral part of business success; however, it requires time, patience and lots of effort. Susan Gunelius best defines brand equity as follows:
"The tangible and intangible value that a brand provides positively or negatively to an organization, its products, its services and its bottom-line derived from consumer knowledge, perceptions and experiences with the brand."
This definition has three key components as follows:
- Tangible and intangible value: includes tangible elements like revenue or premium prices or intangible elements like awareness or goodwill.
- Positive or negative effects: organizations either benefit or suffer from brand equity.
- Consumer catalysts: brands are built by consumers, not companies; therefore, brand equity is also built by consumers.
As mentioned above, organizations benefit from positive brand equity effects in a variety of ways. Five common benefits are highlighted below:
- Charging a premium price for a brand
- Expanding an organization through successful brand extensions and expansions
- Increasing sales and revenue
- Reducing marketing or promotional costs
- Positioning an organization for long-term success where consumers are more likely to overlook brand set-backs
If those benefits are not compelling enough, consider that an organization with strong brand equity is better able to navigate market and economic challenges compared to organizations with little or negative brand equity. Given most organizations' current economic and competitive landscapes, that alone is reason enough to consider building and/or measuring brand equity.
If your organization is new to developing, building or measuring brand equity, consider consulting with experienced professionals like Strategic Marketing Services' project managers. Let SMS help guide your organization through the complexities of building and measuring brand equity.
Employee satisfaction surveys provide critical 
insight to widely shared employee perspectives on a full collection of workplace issues. Incorporating these surveys allow organizations to measure and improve employee loyalty and commitment, which directly impacts the organization’s productivity, performance and profitability. Effectively portraying employee attitudes and opinions through these surveys can boost morale and relationship building among employees.
The importance of employee satisfaction is highly critical in any organization. To ensure that organizations receive the best results, it is essential to take into account the four Cs of employee satisfaction.
- Commitment: Assesses employee engagement.
- Culture: Defines employees view on leadership and accountability.
- Communications: Determines and distinguishes roadblocks to effective management.
- Compensation: Measures employee perceptions on pay and benefits.
After you’ve developed the survey, complete with the four C’s, it is important to advertise the survey. Repeatedly notifying your employees of the upcoming survey via company newsletter, email or bulletin board has been linked to improved response rates. It is also important to also provide anonymity in the survey because employees should not fear that their identities are linked to their responses. Additionally, demographic questions should not be included on the survey to avoid biased responses.
Employee satisfaction surveys can provide helpful insights that may help your company improve profitability and organizational performance. Strategic Marketing Services has valuable experience in employee satisfaction surveys and would be glad to work with you.
Not only is diversification the most risky of growth strategies, it is also the most complex. Several key strategic decisions must be made by management prior to implementing this strategy. First, an organization must decide whether to diversify by going into related (concentric) or unrelated (conglomerate) businesses. Next, the organization must also decide whether to diversify by developing the new business in-house (internal) or to buy an existing business (external). Lastly, management must also determine at what stage in the production process they wish to diversify (vertical vs. horizontal).
Concentric diversification happens when an organization adds related products or markets with the goal of achieving strategic fit or synergy. Synergy can be achieved by combining firms with complementary marketing, financial, operating or management efforts. Here are a few examples of concentric diversification synergy:
- Marketing synergy can be achieved by a large number of small or regional organizations combining into a national network for advertising and distribution.
- Financial synergy is achieved when a firm with strong financial resources but limited growth opportunities combines with a firm that has great market potential but limited financial resources.
- Operational synergy results by combining operating units to improve overall efficiency by eliminating duplicate equipment or research and development, receiving quantity discounts through combined ordering or using by-products from existing operations.
- Management synergy can be achieved by applying management experience and expertise to different situations. However, caution must be applied in assuming management experience is universally transferable. Personality clashes or other differences may make this type of synergy hard to achieve.
Conversely, conglomerate diversification occurs when an organization diversifies into areas that are unrelated to its current line of business with the primary goal of improving profitability and the firm's growth rate. However, one disadvantage associated with this type of diversification is the increase of administrative problems associated with operating unrelated businesses. Management issues and competition between strategic business units for resources can result.
After a concentric or conglomerate diversification strategy has been determined, an organization must next determine whether to grow (internal diversification) or buy (external diversification). Internal diversification involves an organization marketing new and unrelated products or services to new markets. This strategy is highly risky and therefore least utilized as the probability of failure is much greater when both the product/service and market are new. External diversification is more commonly utilized. Common forms of external diversification are mergers and acquisitions. Mergers occur when two or more organizations combine operations to form one corporation, perhaps with a new name. An acquisition occurs when the purchased corporation loses its identity and the acquiring organization absorbs its. This typically occurs when a larger organization purchases a smaller firm.
The last consideration for a diversification growth strategy is the direction of the diversification: vertical or horizontal. Vertical integration occurs when an organization undertakes operations at different stages of production. More specifically, when an organization diversifies closer to the sources of raw materials in the stages of production, it is pursuing a backward vertical integration strategy. An example of this would be a distributor becoming involved in production. Forward vertical integration occurs when an organization moves closer to the consumer in terms of the production stages. An example of this would be a producer becoming involved in sales by opening its own retail outlets.
Horizontal diversification occurs when an 
organization enters a new business (either related or unrelated) at the same stage of production as its current operations. An example of this would be selling new products/services using existing distribution channels.
While pursuing a diversification growth strategy is risky, it also can be highly effective. If your organization is considering a diversification growth strategy be sure to invest in marketing research to ensure your new product/service has potential in the new market you are venturing into. Want expert assistance navigating this new marketplace? Contact Strategic Marketing Services to talk with one of our highly experienced project managers.
The final growth strategy we will discuss is diversification, which is investing in or acquiring products/services/businesses outside an organization's core competencies or industries. Diversification strategies are used to expand an organization's operations by adding markets, products, services or stages of production to the existing business. The purpose of this strategy is to allow the organization to enter lines of business that are different from current operations.
Typically, this strategy is utilized only after all other growth strategies within current markets have been exhausted as diversification can be very risky. The first three growth strategies are usually pursued with the same technical, financial and merchandising resources used for existing product or service lines. However, diversification requires organizations to acquire new skills, techniques and facilities. This required acquisition of skills, techniques and facilities can be achieved through several various actions, such as:
- Internal development of new products or services for new markets
- Acquisition of another firm
- Alliance with a complementary firm
- Licensing of new technologies
- Distributing or importing product or service lines produced by another firm
Some successful examples of diversification include:
- Virgin moving from music producing to travel and mobile phones
- Walt Disney moving from producing animated movies to theme parks and vacation properties
- Apple moving from personal computers to music (iPods and iTunes) and mobile phones (iPhone)
There are two major types of diversification: concentric and conglomerate. Concentric diversification means the new venture is strategically related to the existing lines of business, while conglomerate diversification occurs when there is no strategic fit or relationship between the new and old lines of businesses. We will dig deeper into each of these major types of diversification in our next article.
If your organization is considering diversification as a growth strategy be sure to utilize marketing research to minimize risk. Marketing research is essential because an organization needs to determine if customers in the new market(s) will potentially value and purchase the new products or services. Strategic Marketing Services would be happy to assist your organization with diversification-based marketing research needs. Please contact us for more information.
Another important consideration in the strategic planning process is whether or not to hire an experienced professional to facilitate your strategic planning process. An experienced professional can save you both time and money and deliver a superior plan that is unbiased and balanced. An outside professional also brings a fresh perspective, is not hampered by company politics and doesn’t have a hidden agenda. In addition, they do not have to worry about keeping their job as an internal employee would. Here are some additional circumstances in which an external facilitator should be utilized:
- Your organization has not conducted strategic planning before
- For a variety of reasons, previous strategic planning was not deemed to be successful
- There appears to be a wide range of ideas and/or concerns among organization members about strategic planning and current organizational issues to be addressed in the plan
- There is no one in the organization with sufficient facilitation skills
- Management believe an inside facilitator will inhibit participation from others
- The inside facilitator will not have an opportunity to fully participate in planning themselves
Some organizations insist on using a facilitator that specializes in planning for companies in their industry. The logic is that these individuals will bring beneficial information to the planning process based on what they have learned from other businesses in the same industry. Unfortunately, they may eventually use what they learn from you with your competitors which results in your strategic plan not setting you apart from your competition.
If your organization is in need of a seasoned, external strategic planning facilitator, Strategic Marketing Services can help. All of our project managers are skilled facilitators that excel in leading organizations through the strategic planning process. Please contact us for more information.
Market research plays a significant role in product
development and can be utilized at all stages of the product life cycle. As a new product or service is developed, it progresses through a sequence of stages: development/introduction, growth, maturity and decline. This article will focus in on the specific market research strategies can be applied at each stage.
Development/Introduction Stage
Developing and introducing new products/services is an essential activity for all organizations. Although very few innovations are the direct result of market research, market research does play a role in determining the need for most new products or services. More specifically, market research provides valuable insights into unmet needs and a thorough understanding of the marketplace in which the product or service would be offered. The most effective types of market research at this stage are needs-based assessments and concept testing. Here are key areas that should be addressed in any development/introduction stage research.
- Behavior of people buying similar existing products/services
- Gaps in the market
- Clarity and purpose of the offering (concept testing)
- Demand for the offering (concept testing)
- Pricing (concept testing)
- Purchase intent (concept testing)
Growth Stage
In the growth stage, an organization seeks to build brand preference and increase market share. There are three critical questions that should be answered for products/services in this stage.
- Where does the product/service stand at this point in time?
- Where does it wish to go?
- How can it achieve its goals?
Market research can be utilized to answer all three of these questions by providing information such as market size assessments, market segmentation and purchase decision factors. Market research can also guide all areas of the marketing mix. Typical market research studies at this lifecycle stage include market assessment studies, pricing research or marcom testing.
Maturity Stage
At the maturity stage, sales growth flattens as competitors enter the market with similar products/services. So the primary objective shifts to defending market share and mazimizing profits. Market research can help optimize price points, assess strengths and weaknesses of competive products/services and uncover potential new product/service development or redevelopment opportunities. Typical market research studies performed in this lifecycle stage include customer satisfaction studies, segmentation research and pricing research.
Decline Stage
As a product or service drifts into the decline stage an organization has several options. The product/service can be maintained, harvested (reduce costs and offer to small niche) or discontinued. Market research at this stage can help determine which option is best choice for a specific product/service. Not all products/services need to be discontinued as market research often identifies opportunnities for modifications or improvements which can rejuvenate the life cycle. Market research can also assist an organization in finding new markets for aging products and services. Typical market research studies for the declining stage include needs-based assessments and market-based assessments.
As we have discussed, product development research should be applied to all stages of product life cycle from concept to maturity. It offers numerous benefits as wells as provides a high return on investment. It is also important to note product development research should encompass the entire customer value proposition, not just the product or service alone.
Strategic Marketing Services is available to assist your organization with your product development research needs. We are highly experienced in helping organizations conduct research throughout all stages of the product life cycle. Please contact us for more information or to talk with one of our skilled project managers.