Why Brand Evaluation is Important and How This Could Be Done?
Companies have been asked in a survey for their most valuable assets to be named and their brands have been considered as the most valuable asset, by 90% of them. So, to manage what in most cases is considered the most valuable asset of a company; it has to be searched and evaluated.
Answering Very Important Questions
Companies have to evaluate their brands so that the following questions would be answered:-What is the general status of their brand?
-What is their brand’s status, compared to that of competitors?
-What are the strength and weaknesses points of the brand?
-What actions have to be taken for brand optimization? How and to what extent these brands would be optimized, through these actions taken?
-How much investment is required to upgrade the brand to the intended level?
-What about return on investment and its risk level?
-What is the financial value of the brand?
questions, companies have to make a brand evaluation. Moreover, through brand evaluation, the positive outcomes of every activity performed by the company could be achieved.
Brand Evaluation Method
Here, an effort would be made for the method of brand evaluation to be explained, through examples and plain language. Various methodologies have been presented and used by researchers, for brand evaluation. The following simple model has been provided by Lehmann and Keller (2003) for the brand value chain. According to them, desirable marketing activities have primarily good effects on customers’ minds; then, these effects show themselves in form of marketing indices. Improvement of these indices creates value for shareholders and stakeholders which is indicative of brand function for value creation in the company.
To measure and evaluate brand, marketing indices of the two middle rectangles have to be specified, primarily. In the paper, indices related to the measurement of customers’ mindsets would be stated, in brief.
In general, customers’ mindset or brand equity concerns the mindset of customers and stakeholders about a brand, and how they behave in relation to that brand. Customers’ mindset about a brand is by itself divided into various indices; and, various indices have been stated for it by researchers. In continuation, you will find these indices and their method of evaluation.
Brand Preference
Brand preference has been defined as the “Relative preference of choosing and using a brand”. Brand preference can be measured through the correctness level of such phrases as: “At the time of choosing this product, brand X is the first name coming to my mind”.
Brand loyalty
Brand loyalty is one of the important dimensions of brand value which has been referred to, in many articles. Brand loyalty means the frequency of using and buying brand X which makes its market stable, and generates revenue for the company. Loyalty could be of various definitions in different industries, and for various products. Moreover, there are different degrees of loyalty. Loyalty could be evaluated through this phrase: “I consider myself loyal to brand X”.
Purchase Intention
The purchase intention index makes focus on the possible level of purchasing a product. Purchase intention can be measured through such phrases as: “I want to buy the product from brand X”.
Willingness to Pay a Price Premium
When a group of customers are willing and ready to pay a higher price for a certain product, compared to a similar product without that brand, that brand is of a price premium. The index can be evaluated through such phrases as: “I am willing to pay extra for brand X”.
Liking or Attachment
Brand liking is an index showing emotional evaluation and general brand image from the customer’s perspective. Liking a brand could be measured through such phrases as: “I like this brand”.
Perceived Quality
Perceived quality is reflective of customers’ judgment about the quality of products and services provided by the brand so that the quality would be tested, or physically measured. Perceived quality could be evaluated through this phrase: “Products provided by this brand are of high quality”.
Uniqueness
By uniqueness, we mean how much the brand is different from other competing brands, in what is felt by customers. Brand uniqueness could be measured by: “This brand is different from other brands”.
Brand Extension Potential
Brand extension potential could be described as a specific form of purchase intention. That is, knowing that customers have a tendency towards buying new services or products provided by a brand.
The index could be evaluated through such questions as: “How much is it possible for a new product from brand X to be bought by you?”
Satisfaction
Satisfaction is one of the important concepts in marketing and customer orientation. The satisfaction level of customers from the brand somehow shows how well the brand has been experienced by customers. Satisfaction could be measured through: “How much are you satisfied with the brand X?”
Recommendations
By recommendation or word of mouth, we mean the power of indirect promotion of a brand, as one of its important components. Many people consider the word of mouth or recommendation as the best way to promote a brand and make it famous.
Recommending a brand can be measured through such questions as: “How much is it possible for you to recommend the brand X to a friend or colleague?”
As a branding agency in Vancouver (Canada) with more than 20 years of experience in the field of branding and management, Absolute Creative is ready to cooperate in relation to brand evaluation.