Next to tangible and intangible assets, branding is seen as one of the most important success elements of a business. In fact, in a recent listing of the world’s best valued brands by Business Week and Interbrand, the report reveals an astonishing impact and influence of brand equity on the market value of a company. To measure branding therefore should be a major responsibility for the Chief Executive Officer, since well marketed brands translate to higher revenues and shares for the investors. The task however, is not just left to the CEO. Everyone in the company is a cog in the wheel. In this article, learn basic guides in measuring brand.
In order to fully understand the context of brand measurement, it is best to be familiar with the different terms that circulate the process. There are terms like premiums brands, corporate branding, individual branding, family branding, private branding, private label, economy brand, brand leveraging, employment brand and mother brands. These terms are actually referred to as the types of brands. On the other hand, there are also terms like firm level branding, product level branding and consumer level branding. These are referred to as the levels of measuring brand.
The process of gauging the efficiency and effectiveness of brand starts by identifying the type of branding used. Different approaches require also unique ways of scaling the strategic competence. Premium branding, for instance, is to be measured in such a way that its “premium” appeal will be enhanced. This type of branding involves the process of putting first class or high cost to the product to uphold quality. Measuring indicators may include cost attractiveness or the response of people with regards to the price and the quality. Measuring economy brand however entails not just the promise of quality but also the market’s association of the price to its quality.
Aside from the types of branding, the measurement methods are also based on the three levels. The firm level of branding is one that refers to the company’s point of view. In this level, the company regards the brand as an intangible financial asset and therefore a different approach in measuring must be made. Computing the value of the brand can be obtained by subtracting the market value of the organization which is taken from its capitalization with the intangible and tangible assets, the difference is called the brand equity. Interbrand is currently the leading consultation firm that measures brands across America and around the world through the firm level approach. Other basis for measuring via this level are: international reach or impact of the brand, stability, market leadership and risk profile.
The product level approach is made by comparing the prices of two products, a popular brand and a private label brand. The significant difference is said to be the effect of branding. The consumer level approach, on the other hand, measures the way people associate qualities to the brand, often termed as brand recognition or recall.
Among the three levels, though, the most common approach familiar to consumers is the consumer level. This is when they experience products tests, interviews and surveys. This ultimately tests how effective a brand is since it is the perception of the users that are measured here. But remember, there are different considerations when one is to measure branding.
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