How to manage brand equity?

The author of this article introduces in detail how to manage brand assets from four aspects: academic theory on the composition of brand assets, industry practice on brand asset evaluation, how to evaluate brand assets, and how to manage brand assets.

In the 1980s, Europe and the United States saw the fourth wave of large-scale corporate mergers and acquisitions. For example, in 1984, California Standard Oil Company merged with Gulf Oil Company for US$18.5 billion; in 1985, General Electric purchased American Radio Corporation for US$6 billion.

The number and amount of this round of mergers and acquisitions are unprecedented, and a phenomenon often occurs in corporate mergers and acquisitions, that is, the valuation of a company by the capital market is often higher than the company's own book value. This is because an excellent company has a lot of intangible value in addition to book assets, especially the existence of the brand.

At this time, a question naturally arises: how to measure and calculate the intangible value that a brand brings to a company? So in 1988, the year when the wave of mergers and acquisitions in the United States reached its peak (the annual merger and acquisition finance reached 350 billion US dollars), the American Marketing Science Institute proposed the concept of brand equity to reflect the valuation and premium that brand ownership brings to a company. It has become the most important research direction in the field of marketing.

Academic research results soon emerged. In 1991, David Aaker published Managing Brand Equity. This book and the subsequent Building Strong Brands (1995) and Brand Leadership (1998) are collectively known as the brand management trilogy. They were bestsellers around the world and had a broad and far-reaching impact on the business community of countries around the world. Aaker thus became a world-class brand management master, the most influential and authoritative scholar in the field of brands, especially brand assets, and was hailed as the "forefather of brand assets."

In the book, Aaker regards brand as the most valuable intangible asset of an enterprise and defines and describes brand equity. In 1993, another brand guru Kevin Keller further expanded the connotation of brand equity and proposed the customer-based brand equity concept, namely the CBBE (Customer-Based Brand Equity) model.

Brand equity theory looks at brands from the perspective of business operations and finance, which improves the status and role of brands in corporate management and provides a strong reason for companies to build brands. From then on, brands are no longer a tool for short-term promotions and sales stimulation, but their significance and importance have risen to the level of corporate strategy.

In 2014, when Aaker published his book Brand Masters, he specifically recalled that “the popularity of the concept of ‘brand as an asset’ has a lot to do with the decline of the once popular view that ‘the main function of brand marketing is to stimulate sales.’”[1]

Professor Lu Taihong also emphasized in his book “History of Brand Thought” that modern brand theory has two cornerstones: brand assets and brand strategy . The transition from brand to brand assets and from tactics to strategy are the two watersheds between modern brand concepts and traditional ones [2].

Nowadays, brand asset management has become part of the daily operations of enterprises, and its role is beyond doubt. But what exactly is brand asset? How to define, measure and manage brand asset? In today's lecture, we will talk about these three topics.

1. Academic Theory on the Composition of Brand Equity

There are two classic models for defining brand assets, David Aaker's Five-Star Asset Model and Kevin Keller's CBBE Model.

1. Five-star asset model

In his book Managing Brand Equity, Aaker proposed that brand assets can be roughly divided into the following five categories[3]:

1. Brand name awareness
2. Perceived quality
3. Brand associations other than perceived quality
4. Brand loyalty
5. Other proprietary brand assets

In the industry, people are accustomed to calling these five major brand assets "awareness, recognition, association, loyalty and proprietary assets". However, in my opinion, the terms "awareness" and "recognition" are inaccurate and problematic. Let us explain them one by one.

(1) Brand awareness

Awareness refers to the strength of a brand in the minds of consumers, that is, the degree of memory.

It uses brand names and logos as carriers and measures consumers’ different ways of remembering them. The first is recognition (having seen the brand before and being able to recognize it), followed by recall (being able to remember the brand when a certain type of product is mentioned), then primary recall (the first brand recalled), and finally dominance (the only brand remembered) [4].

Fame determines whether consumers can think of you when shopping and add you to their consideration list. If consumers don’t remember you at all, they will naturally not buy from you. Moreover, people like familiar things, and familiarity represents credibility.

Consumers’ logic is: if a brand is well-known, then there must be a reason for it , just like it is always a good idea to go to the most crowded restaurant for dinner. Well-known symbolizes success, reliability, and popularity. In many industries, the most well-known brands are often the ones with the largest market share. Therefore, well-known is the most basic and important asset of a brand.

But its importance is often underestimated. The value of brand awareness cannot be overemphasized. It affects people's perception and preference of the brand and directly influences purchasing behavior.

The English word for awareness is "Awareness", which means knowing, perceiving, and being aware. Its essence is that consumers are aware of the existence of the brand. It is not enough to be famous. The key is that consumers can remember you and think of you when they buy things . This brand awareness is very important, so I think it is more accurate to translate awareness into " brand awareness ". Acker himself also started using the concept of "brand awareness" from the book "Building Strong Brands".

(2) Perceived quality

Perceived quality refers to consumers' overall feelings about a brand's product quality, including their understanding and evaluation of product functions, raw materials, workmanship, features, services, durability, ease of use, technical content, and reliability. Compared with "brand awareness", the term "perceived quality" is more accurate, as it accurately points consumers' perception to product quality.

Perceived quality is actually a type of brand association. Aaker lists it separately because he believes that perceived quality is the key to consumers' purchasing behavior and can directly promote sales performance. Among all the brand knowledge that consumers have, the association with quality is the lowest criterion. From the perspective of brand assets, perceived quality will drive consumers to perceive and associate other aspects of the brand.

However, it should be noted that perceived quality is a subjective feeling of consumers, which is different from actual quality. A company's products may actually be of very high quality, but it is useless if consumers cannot feel it. Because consumers are not product experts and do not understand the internal technology and craftsmanship of the products, it is difficult for them to know the best criteria for judging product quality and make objective evaluations; and consumers do not have the time or interest to learn in detail about every product they buy.

(3) Brand association

Brand association refers to all the relevant information and elements that consumers think of when they mention a brand, including product features, product design, product quality, product price, product innovation, representative items and product line width, user image, consumer interests, usage scenarios, corporate history, origin, social image, globalization process, as well as brand personality, representative symbols and other aspects.

This kind of association of consumers will combine into some meaning, form certain logos and symbols, and become a personalized description of the brand. This is the brand image and brand personality.

Brand association also affects consumers' purchasing decisions and loyalty, and is the basis for forming brand attitudes, building word-of-mouth, customer evaluations, and customer relationships. The English word "association" for brand association not only means association, connection, and connection, but also represents community and union. This is its underlying meaning. Brand association establishes a connection between the brand and consumers.

(4) Brand loyalty

Loyalty represents consumers' habitual purchasing behavior for a brand, their fondness for the brand, and their strong tendency to share and recommend the brand to others. It includes three levels.

If loyalty is simply defined as repeated purchases of a brand, I think this is very one-sided, because repeat purchases are not only related to consumers' emotional and spiritual identification with the brand, but also to product attributes.

For example, for durable goods such as automobiles, consumer electronics, home appliances, home furnishings, and real estate, even if consumers identify with the brand, the possibility of repeated purchases is still very low. However, they can strongly recommend the brand to their relatives and friends, and maintain the brand's reputation on the Internet, which is also a manifestation of brand loyalty. Therefore, loyalty should be defined as the psychological tendency of consumers to identify with and like a brand, as well as the behavioral response of repurchasing and recommending.

Once consumer loyalty is cultivated, the brand will gain huge benefits. This loyalty can often last for a long time and form customer lifetime value. In addition, it can help the brand build a moat, because it is extremely difficult and costly for competitors to steal a brand's loyal customers. Therefore, cultivating consumer loyalty is one of the important goals of brand building.

(5) Proprietary assets

Proprietary assets mainly refer to intellectual property rights such as trademarks and patents owned by the brand, as well as channel relationships, etc. However, proprietary assets are tangible and fixed assets for enterprises, and do not seem to belong to the category of intangible brand assets. Therefore, in his book "Building Strong Brands" written a few years later, Aaker removed proprietary assets from brand assets and only retained the first four items.

In 2014, Aaker incorporated perceived quality into brand association in his book "Brand Master", and the elements of brand assets were finally reduced to three: brand awareness, brand association, and brand loyalty.

2. CBBE Model

Keller and Aaker are two peaks in the branding world. Keller is another recognized pioneer in brand management. His book Strategic Brand Management is known as the "Brand Bible". At the same time, Keller is also the co-author of Philip Kotler's Marketing Management.

The CBBE model proposed by Keller emphasizes judging brands from the perspective of customers. Brand assets represent the differentiated responses of customers to brand marketing activities based on their brand knowledge. This means that brand assets depend on three points: first, customer brand knowledge, second, the results of brand marketing activities, and third, customer response to the brand.

Brand equity is affected by a company’s various marketing activities, but ultimately depends on the customer’s response to the brand. Keller believes that customer response includes four levels [5]:

1. Brand identity
2. Brand meaning
3. Brand responses
4. Brand relationships

Brand recognition refers to whether customers know who the brand is and whether they can form a clear identification and broad understanding of the brand;

Brand meaning means that customers understand the purpose of the brand's products and form an awareness of the brand's differentiated value;

Brand response indicates how customers feel about the brand;

Brand relationship represents the degree of customer affection and closeness of connection with the brand.

These four levels are logically and temporally sequential, representing the steps a company takes to build a brand: first create identity, then establish meaning, then guide customers to have a positive response to the brand, and finally create a strong and close relationship.

(1) Six elements of brand composition

Based on these four levels, Keller believes that building a brand requires the following six elements: Brand Salience, Brand Performance, Brand Imagery, Consumer Judgment, Consumer Feeling, and Consumer Resonance. The corresponding relationship between the two is shown in the figure below.

Prominence means that customers can recognize and recall the brand in different situations, remember some basic elements of the brand such as name, logo, slogan, etc., especially to help customers understand the scope and product categories of the brand, so that customers can be sure that the brand can meet their needs. It can be seen that Keller has very high requirements for prominence. It is not just about remembering the brand, but about connecting the brand elements with product categories, consumption, and scenarios, so that they can appear in people's minds when they shop.

Therefore, if a brand wants to be distinctive, it must have a loud name, a bright logo, a vivid image, unique and outstanding product value and an ultimate user experience, so that customers can recognize you.

Effectiveness, also known as performance, represents the degree to which a product/service meets the functional needs of customers , including product features, design, service, price, product reliability, durability, convenience, etc.

Image represents the way a brand meets the psychological and social needs of customers, including user image, consumption scenarios, personality, experience, etc.

These two together make up the brand meaning.

Judgment, also known as evaluation, represents the customer's overall evaluation of the brand's quality, reputation, and advantages, and whether the brand will be considered. Feeling represents the customer's emotional response to the brand. These two together constitute brand response. Finally, resonance represents the customer's sense of identity, belonging, participation, and repeated purchases in behavior , which constitutes the brand relationship.

This is the complete CBBE model, which proposes the premise and unique perspective of examining brand assets from the perspective of consumers, emphasizes that brand assets exist in consumers' understanding and response to the brand, and provides a complete description of how brands work at the consumer psychological level.

Its structure is quite strict. It not only tells us what elements a brand is made up of, but also divides the logical levels of different constituent elements. It not only divides the levels of brand elements, but also provides process steps on how to build a brand, pointing out the direction for building brand assets and evaluating brand marketing results.

Therefore, CBBE is a very representative brand equity model, which is both academic and practical. Even Kohler himself believes that most other brand equity models are a subset of his CBBE model. The CBBE model and the five-star asset model can be said to be a comprehensive and in-depth interpretation of the brand equity theory, and they are quite concise, profound, and in line with the MECE principle.

If you want to study brand equity, you can use these two models as a blueprint. If you think there are too many concepts to remember, just remember that Kohler's model is 4 and 6, and Aaker's model is 5 and 3 .

2. Industry Practices in Brand Equity Assessment

In addition to the two classic models in academia, there are many companies in the business world that make a living from brand assets. For example, market research companies help companies value their brands for use in transactions and acquisitions, and regularly publish brand rankings; brand agencies help companies build brands, audit and manage brand assets. Therefore, these companies in the industry also have their own brand models.

However, brand valuation is not the same as brand asset evaluation, because valuation simplifies the value of a brand into a simple financial number, which is too simplistic and arbitrary. However, brand asset evaluation is an indispensable part of calculating brand value. Because, although it is difficult for us to clearly say what proportion of a company's revenue is contributed by the brand, there is no doubt that the stronger the brand power, the greater its contribution to the company's revenue.

Therefore, the methods of calculating brand value and the models of brand asset evaluation of these institutions responsible for brand valuation are very worthy of our reference.

Here is a brief introduction to the three most internationally recognized and authoritative brand value assessment agencies, namely Interbrand under Omnicom Group, Kantar Millward Brown under WPP Group, and the independent company BrandFinance.

1. Interbrand

Interbrand (hereinafter referred to as Interbrand) was founded in 1974 and is the world's largest brand management and marketing consulting company. As early as 1984, Interbrand began to study the evaluation method of brand value. In 1988, it was the first in the industry to launch a proprietary brand value evaluation model, and in the Grand Met acquisition case the following year, it conducted an epoch-making brand value evaluation for the Pillsbury brand group. Interbrand's evaluation system was the first to pass ISO international certification and is recognized as an authoritative brand evaluation tool in the industry.

In 1993, Inter merged into Omnicom, the world's second largest communications group. In 2000, Inter began to cooperate with the top business magazine Bloomberg Businessweek to jointly publish the annual "Best Global Brands" list, which was earlier than the other two.

Kantar’s BrandZ ranking was not published until 2006, while Brand Finance’s “Global 500” ranking began in 2007.

Inter uses the income approach for evaluation, and its logic is that brand valuation is to evaluate the present value of the income and cash flow that the brand can generate in the future. Therefore, brand value is the present value of future brand ownership income.

As an Intel official said, “The evaluation of brand value must not only take into account the impact of the brand on the company’s economic added value, but also the expected future benefits that the brand will create for the company’s long-term operations.”[6] In short, Intel’s calculation method is: Brand value = intangible benefits x branding role x brand discount rate

The first step is financial analysis, which is to analyze the financial performance of branded products or services based on the public financial reports of listed companies and determine their economic added value.

The second step is to evaluate the role of brands in driving demand in different industries and market segments. This role is called the Role of Brand, or RBI index for short. This index is used to measure the proportion of brand factors in intangible benefits.

The RBI index varies greatly from industry to industry. Some common industries have RBI indexes as follows: less than 10% (chemical industry), 30% (hotel industry), 40% (finance), 55% (household products), 70% (consumer electronics), 80% (soft drinks), and 90% (perfume). [7]

The third step is to determine the brand discount rate, which is converted from the brand strength score (BSS) and reflects the risk of the brand's future earnings.

In this formula, RBI evaluates the impact of the brand on the company's current business, reflecting the driving force of branding on customer demand compared to those unbranded products or services. This is the basis for the existence of brand value, and it allows the company's economic benefits to be converted into intangible benefits brought by the brand itself.

BSS evaluates the impact of a brand on a company's future earnings, reflects the brand's ability to create customer loyalty, and its influence on customer decisions. It represents the level of a company's brand management. Therefore, BSS is Intel's understanding of brand assets.

Intel has made several revisions to the factors for measuring BSS. In 1996, Intel used a four-factor weighted comprehensive method, including:

• Heavy refers to market share.
• Broad refers to market distribution.
• Deep refers to customer loyalty.
• Length (Long) refers to the elongation of the product [8].

Another theory is:

• Market positioning (premium, market share).
• Customer privilege (loyalty, recommendation, satisfaction, consideration, awareness).
• Image (relevance, differentiation).
• Support (legal support, visual and textual recognition, marketing support) [9].

Later, Intel revised it to 7 indicators, including:

1. Leadership.
2. Stability.
3. Market power (Market).
4. Internationality.
5. Trend force (Trend).
6. Support.
7. Protection[10].

Since 2012, Intel has further refined its model and evaluation indicators, which currently stand at 10 indicators, including four internal factors:

• clarity.
• commitment (belief and commitment to the brand).
• governance.
• responsiveness (update).

And six external factors:

• authenticity.
• relevance.
• differentiation.
• consistency.
• presence (external image).
• engagement [11].

2. Kantar Millward Brown

Millward Brown is a world-leading brand asset research organization, known as Huatong Minglue or Mingluexing in China.

Its parent company is Kantar Group, a world-renowned data, insight and consulting group. Its 12 member companies are leaders in their respective fields, providing professional consumer research, market analysis, media monitoring and strategic communication services to more than half of the world's top 500 companies. Kantar is affiliated to WPP, the world's largest communications group.

In 2016, Kantar released a new brand strategy, requiring all sub-brands to carry the prefix Kantar, use a unified logo style and font, and strengthen the recognition of Kantar’s parent brand. Millward Brown became Kantar Millward Brown, and for the sake of narrative method, we will refer to it as Kantar below.

Kantar named its annual brand value evaluation list BrandZ, the full name of which is BrandZ Top 100 Most Valuable Global Brands. It has become one of the most well-known online brand evaluation platforms in the world.

Kantar’s logic for evaluating brand value is also the income approach, that is, how much of a company’s total income is contributed by the brand effect. The specific calculation formula is: Brand value = brand income x brand contribution x brand multiplier [12].

The first step is brand revenue. Decompose the company's overall revenue into the revenue of specific product brands to see what proportion of a company's revenue is generated under the brand banner;

The second step is brand contribution. Analyze the proportion of brand revenue that is truly attributed to brand factors. Consumers choose it because of the brand, not other factors such as promotion. Brand contribution reflects consumers' attitude towards the brand and their relationship with the brand, and is the real brand asset;

The third step is brand multiplier. Analyze the future growth potential of brand-driven revenue. The brand multiplier is aggregated by indicators such as brand momentum, market value, and growth potential. Kantar’s specific model for evaluating brand contribution is called “ MDS ”, which includes three dimensions:

• Meaningful - The brand meets consumer needs and builds relationships. It is divided into two key indicators: needs satisfaction and affinity. Consumers' perception of product performance and needs satisfaction, and whether they feel close to the brand.
• Differentiation - Differentiation is also divided into two indicators: uniqueness and vitality. Uniqueness represents whether the brand is different and unique in its category; vitality represents whether the brand can lead the development trend of the category and is innovative.
• Salient - Whether consumers can quickly identify a brand. There is only one indicator of salience, which is the first recognition in the minds of consumers.

This is the brand asset model that Kantar has updated since 2011. You can compare it with the previous CBBE model. It is basically a replica of CBBE.

3. Brand finance

Brand Finance is also a brand valuation and market strategy consulting company headquartered in London. Its business includes marketing, valuation, taxation and strategy. Its founder, David Haigh, was the global brand valuation director of Interbrand. In his early years, he worked as a chartered accountant at PricewaterhouseCoopers and founded a financial market service consulting company.

Therefore, Brand Finance's idea of ​​calculating brand value is completely based on finance and accounting. The specific method is called the " franchise fee method ". It assumes that a company's brand does not belong to the company, but is authorized by a third-party organization for use by the company. For this reason, the company needs to pay a certain brand franchise fee, and this amount is the brand value (this idea is really good).

Brand Finance determines the range of royalties for each industry based on publicly available transaction records, and determines the upper and lower limits. It then calculates the Brand Strength Index (BSI) of a brand in the industry, and uses this to determine the royalty rate for using the brand in the industry[13].

For example, the brand franchise fee rate in the beauty industry ranges from 10% to 20%. At the same time, the BSI score of the Mentholatum brand is 50 points out of 100, so the franchise fee rate of Mentholatum is 15%. Then, Brand Finance will estimate the future expected sales of Mentholatum's parent company brought by the Mentholatum brand. The sales revenue multiplied by the franchise fee rate is the brand value.

The core BSI of this method consists of three parts: current performance, customer evaluation and future expectations . Current performance includes profit, sales, market share, pricing, etc.; customer evaluation includes popularity, association and reputation; and future expectations include repeat purchases, competitor strategies, etc.

In addition to these three major institutions, we will introduce two more representative models.

(1) BAV model

It was developed by two important members of the WPP Group, Young & Rubicam (Y&R), one of the oldest and largest advertising companies in the United States, and Landor, the world's largest image identity and strategic design consulting company. BAV stands for Brand asset valuator, which believes that brand assets have four pillars.

• Differentiation – measures the degree to which a brand is recognizable and distinguished from other brands.
• Relevance - measures the breadth of a brand's appeal, i.e. the total size of the brand's franchise and its coverage of consumer demand.
• Esteem – measures how much consumers value and respect a brand; how good people think the brand is.
• Knowledge – measures consumers’ familiarity and affinity with a brand.

Differentiation and relevance represent the brand’s future growth potential, while respect and knowledge reflect the brand’s current position of strength.

(2) The Brand Dynamics Pyramid

This model was also proposed by Kantar (i.e. Millward Brown) and was proposed by Dyson, Farr and Hollis. This model evaluates brand value based on the strength of the relationship between the brand and the consumer. It divides brands into five levels: presence, relevance, performance, advantage and binding .

The lowest level is existence, where the brand has a sense of existence in the minds of consumers, people recognize the brand, and know that it represents a certain product. The second is relevance, where the brand must establish a connection with consumer needs, meet certain core needs of consumers, be relevant to people, and be useful to people. The third is performance, where the brand's product functions and performance meet consumer requirements and perform well in people's lives. The fourth is advantage, where the brand must demonstrate unique advantages over competitors to differentiate itself from them.

Finally, at the highest level, the brand must establish a certain emotional connection with consumers and be bound to consumers. This is the top of the pyramid.

Only by knowing which level of the pyramid the brand is in can the company know how to formulate an appropriate brand strategy. Because Kohler's CBBE model is also called the Brand Resonance Model, the two pyramids are easily confused, so please note this.

Today, this article introduces 7 brand models. Because there are so many models, and each model contains many measurement indicators, especially the indicators used by different models are repeated or similar, or different concepts are used to express the same meaning, such as differentiation, salience, resonance and binding, etc., so you must feel dazzled after reading these models and can't tell which one is which.

In fact, every scholar who wants to write a book naturally has his own unique views and concepts; every company that wants to do business naturally has to come up with its own proprietary tools and methodologies. So don't be confused by these different names, but look at the commonalities and logic behind each model.

If you look closely, you will find that there are only three levels of dimensions for brand evaluation in different models.

The first is to measure consumers' memory responses.

Do consumers remember you, recognize you from the many brands on the shelves and in the media, and think of you in daily life and when shopping? You can call this indicator popularity, prominence, presence, or differentiation, it all means the same thing.

The second is to measure consumers’ cognitive and evaluative responses.

Consumers’ understanding, feelings, evaluation and associations of the brand, what value the brand holds in their minds, what it looks like, and what attitude they have towards the brand. Awareness, brand associations, performance, image, evaluation, feeling, relevance, and brand knowledge all belong to this level.

The last is to measure the relationship between the brand and the consumer.

Consumers' emotional inclination towards the brand (resonance, binding, respect, meaningfulness, reputation), as well as consumers' behavioral responses to the brand (loyalty).

Brand equity essentially reflects the degree to which a brand influences consumers’ thinking, feelings, and behavior about the brand. Brand power varies because brands have different abilities to evoke consumer responses. This is how Mr. Kotler defined brand power: brand power is the brand equity viewed from the customer’s perspective[14].

My understanding of brand equity is based on these three levels. If you want to study brand equity, my suggestion is to compare and analyze different models and find their similarities and differences. The commonalities of different models represent the essence of brand equity; while the differences can inspire you to think more and discover more. Insights always come from comparisons. If you only recognize a certain model, you will inevitably fall into a dead end .

However, the focus of introducing these models used in the industry is not on the analysis model itself, but on another question: how to measure these brand evaluation indicators? Kantar, Inter and Brand Finance are also very representative in this regard.

Kantar uses consumer research to evaluate brands, based on a market database of more than 3 million consumers interviewed online or in person in more than 50 regional markets. Inter uses expert scoring.

Brand Finance only looks at company financial reports and transaction data, and uses data such as sales and profits to speak. Kantar believes that it has a great advantage. When introducing its evaluation method on its official website, it directly stated that the voices of 3 million consumers are more scientific and reliable than Intel's use of a group of experts or Brand Finance's use of pure financial and market data[15].

3. How to evaluate brand assets?

How do we evaluate brand assets? The most common method in the industry is to conduct consumer research. Many of my clients in the past, mature domestic and foreign brands, have hired professional market research companies to interview consumers one by one through questionnaires or in-depth interviews according to pre-designed brand models and evaluation indicators, and finally form a brand asset evaluation report.

By comparing the evaluation reports of different years, and based on the changes in various indicators, we can analyze the gains and losses of brand marketing promotion within the reporting period, diagnose the problems of the brand, and point out the direction for future brand building. However, today is an era of big data. In addition to research, we have more ways to evaluate brands.

1. Evaluation of brand awareness

Awareness is the most easily quantifiable indicator of brand assets, and is therefore best assessed using survey questionnaires. Generally speaking, awareness assessment focuses on three indicators: prompted awareness, unprompted awareness, and first mention rate. Prompted awareness is to directly ask consumers whether they know the brand and whether they can recall and recognize it when prompted with the brand name.

Unprompted awareness refers to asking consumers to recall which brands they can think of in a certain category without any prompts, and whether this brand is included. First mention rate refers to the proportion of consumers who think of this brand first in the market and specific category where the brand is located.

For example, if I ask, what brands can you think of when you mention shampoo, and 7 out of 10 people mention Head & Shoulders, then the unprompted awareness of Head & Shoulders is 70%.

Question: Do you know Head & Shoulders? If 9 out of 10 people know it, then the awareness of Head & Shoulders is 90%.

If we ask you again, what brand do you think of first when you mention shampoo? If 5 out of 10 people answer Head & Shoulders, then the first mention rate of Head & Shoulders is 50%.

In addition to surveys, we can also evaluate a brand’s popularity by analyzing its online popularity, including exposure, topicality, and searches. Commonly used data sources include Baidu Index, WeChat Index, the total number of views of brand topics on Douyin, and the total number of brand notes on Xiaohongshu.

2. Evaluation of brand associations

The main means of evaluating brand associations is also market research, but to explore consumers' feelings, evaluations, attitudes, and emotions towards a brand and analyze their inner world, questionnaires alone are far from enough.

You can't just give consumers some adjective options and ask them to check whether the brand is modern, traditional, warm, cool, fashionable, or technologically innovative. The research results obtained in this way are too general and lack details, which is of no practical significance for guiding brand building and communication and promotion. To research brand associations, you can use the focus group method to find several groups of typical consumers for in-depth interviews. Through chatting and continuous questioning, as well as mutual infection and communication between different group members, consumers can open their hearts and share their true thoughts on the brand and its competitors.

Another method is projection method. Projecting a brand into a specific person or item, and letting consumers describe it. For example, you can ask consumers if the brand is a song or a movie, which song or movie do you think the brand is, and why?

Or if the brand is a planet, then what kind of landforms, weather, vegetation and creatures will be there on the planet, what kind of urban buildings and life, etc. Or if the brand is a person, then what consumers think of the person's age, gender, occupation, family status, dress, and hobbies.

We can also regard the brand as a brand in other industries. If the brand is a mobile phone, then which of the brands consumers think is Apple, Huawei, OPPO, VIVO, Xiaomi and other brands?

Other projection techniques include photo display, painting, word association, sentence and story cloze test, etc. Projection can give consumers an unrestrained and free-acting situation, bypass their psychological defense mechanism, reveal their true feelings and attitudes towards the brand, and help consumers show potential ideas that they do not know how to express and do not express themselves.

In addition to research, another great way is to analyze it through big data, such as capturing consumers' post-buy evaluations of the brand by major e-commerce platforms, and then using text mining technology to analyze which words consumers use most often to describe the brand, and find high-frequency keywords. The word cloud formed by this represents consumers' feelings and evaluations of the brand.

In addition, brands should go to more social platforms, user communities, and vertical websites to see how consumers evaluate and describe the brand and how to use the brand in daily life, such as Weibo, Xiaohongshu, etc. This is first-hand brand data. With text mining technology, especially after the recent breakthrough of AI in LLM (Large Language Models, large-scale language models), its value is extraordinary.

3. Evaluation of brand loyalty

On the one hand, loyalty assessment requires investigating consumers' purchasing behavior and understanding their purchase frequency, usage frequency, purchase channels, usage scenarios, etc. On the other hand, it is understood through sales data from e-commerce platforms and private domains. There are three commonly used indicators: latest consumption (Recency), consumption frequency (Frequency), and consumption amount (Monetary).

This is the RFM model proposed by Arthur Hughes, an American Database Marketing Institute. These three elements are considered the best indicators for data analysis. You can use these indicators to evaluate brand penetration, layer customers, distinguish between heavy customers, general active customers, and silent customers, and then implement separate, targeted customer relationship management.

Although multiple brand equity models do not include loyalty and only emphasize psychological resonance with consumers, in fact, whether consumers' behavior is loyal or not can better reflect the relationship between the brand and the consumer. Behavior is more direct than emotion, and can better measure a customer's ability to create benefits for the brand and the customer's lifetime value.

4. How to manage brand assets?

For the maintenance and management of brand assets, efforts need to be made from three aspects: organizational guarantee, management norms and daily supervision.

1. Organizational guarantee

The first thing to emphasize is the setting of the brand organization. I have already talked about this topic in the previous lecture "Brand 30 Lectures: 18 | Building a Brand Organization", and I will not go into it here. But one thing to note is that the brand department is only a functional department within the enterprise, but the brand spans multiple departments of R&D, product, marketing, sales, and after-sales. Everything that the enterprise does ultimately forms a brand in the minds of consumers.

Therefore, it is necessary for enterprises to establish a communication mechanism across various departments within the enterprise at the decision-making level, and coordinate various functional departments to build a good brand. This is the establishment of the brand management committee. For example, in March this year, Xiaomi Group issued an internal letter announcing the adjustment of its personnel appointments to its brand committee.

After the adjustment, Xiaomi President Lu Weibing served as the chairman of the committee, and the group's senior vice president and general manager of the China Marketing Department serve as the vice chairman. His members also include the group's chief of staff, the group's design committee, the group's quality committee, the group's vice president of the group's public affairs department, the group's legal department general manager, the group's internal control internal audit department general manager, the business department general manager, the international business department marketing department, and the three major product departments of Xiaomi, the mobile phone department product department general manager, the automobile department industrial design department general manager, and the ecological chain department general manager.

Xiaomi's Brand Committee was established in 2021. It was initially a functional department. Later, with the urgent need for Xiaomi's brand strategy upgrade and its business development, especially after the announcement of car manufacturing, more and more department heads began to join the committee. It gradually became a top-level decision-making department, which is responsible for formulating brand strategies and major brand decisions, such as which brand to use for the group's new business, external brand cooperation and adjustments, etc.

In order to formulate a brand strategy, we are responsible for major brand decisions, such as which brand to use for the company's many businesses and products, and external brand cooperation.

In fact, every company needs the existence of such a brand management committee, coordinates internal departments to work together to build a good brand, and building a brand is not just the business of the brand department.

2. Management specifications

One of the biggest enemies of brand assets is the personnel adjustment of corporate management and the replacement of brand agency companies. Once many companies have changed their new CEOs, CMOs, or new agency companies, the first fire of a new official taking office will often burn the brand first, change the logo, change the slogan, overturn the past brand strategy, and start another set.

It seems that not so is not enough to demonstrate one's own value and presence. Because strategic and business adjustments require years to show results, and changes in trademarks, advertising, and brand image are the most intuitive for employees, customers and the general public. However, brand assets need to be accumulated and persisted, frequent changes in brand logos and themes, and easy abandoning the accumulated results in the past are a huge destruction of brand assets. It will make consumers unable to adapt and do not know what the brand actually represents.

It is said that since Leo Bena created the classic cowboy image for Marlboro in 1954, for a long time since then, in addition to cowboys, the advertising scenes may be changed from wilderness to mountains, from horseback to straw sheds, but cowboys are everywhere.

The president of Marlboro once expressed dissatisfaction with this: so many agency fees are given every year, but the works paid by advertising companies are exactly the same, so why do you still have to spend money to hire you? Leo Bener's reply to this is: You spent so much money, isn't it just that I asked me to supervise you not to replace the denim? It is precisely because of the decades of persistence in the brand asset of "denim" that Marlboro has become the first choice for men and the world's number one tobacco brand.

In order to ensure the consistency and consistency of brand assets, enterprises need to formulate a series of management specifications as standard documents within the enterprise to regulate various business behaviors of the enterprise, guide brand building and management, and reduce the "rule of man" phenomenon of arbitrary changes in brand strategies. This document should regulate brands on the following contents:

Brand Asset Management Specifications

• Basic definition of brand - requirements for product quality, price range, determination of core target groups, locking of core competitors, basic description of brand, etc.;
• The core elements of the brand - regulations on brand names, trademarks, standard colors and fonts, core values ​​and claims, packaging design, representative logos, brand image, and directions for future modifications; protection of intellectual property rights such as brand patent technology, patent packaging, copyright, and anti-counterfeiting marks, especially trademark registration protection, domain name registration protection, and major social platform account name registration protection;
• Brand concept and culture - the establishment of brand mission, vision, values, brand concepts, accurate definition of brand culture, brand development goals and planning of medium- and long-term development blueprint;
• Brand asset management - the requirements for the time and method of regularly implementing brand diagnosis and auditing for the determination of brand asset models and specific measurement indicators;
• Brand communication and extension - establish standards for review of brand advertising information, establish principles for handling public relations activities, especially crisis public relations, standards for terminal management and promotion, as well as implementation requirements for product line extension and brand extension.

In the past, the advertising company I worked in had such a tool called the Brand Constitution. As the name suggests, its existence is the fundamental rule for corporate brand management. I have also helped one or two clients formulate this brand constitution. It seems that it is just a PPT, but the entire project process is cumbersome, long time, and huge workload.

First, we must draft the first draft with the customer brand management department, consider and confirm each clause; then hand it over to the customer management for hearing and refine it; finally report it to the customer president and the brand management committee for approval, and the entire project has been implemented, and one or two years have passed. Despite this, once the document is approved by the customer, it becomes a standard that plays a programmatic role in the operation and operation of the company for a considerable period of time. It will be distributed to various departments of the company for study and must be followed, and departments and employees who violate the regulations will be notified and punished within the company.

3. Daily supervision

Today's times are changing, the business world is changing rapidly, and data and technology are emerging like mushrooms after a rain. Enterprises may not need a complex set of brand management standards, but it is very necessary to establish some basic regulatory principles in daily operations and brand communication. Because the second biggest enemy of brand asset management is today's increasingly complex media environment and increasingly fragmented and picky public opinion space.

Looking back on the business news in recent years, you will find that companies have encountered crises, public relations, brand marketing has been overturned, and public opinion controversy is becoming more and more common. The brand assets accumulated over decades may be lost due to the mistake of saying a wrong sentence during the live broadcast, the wrong copy in the tweet, and the wrong customer reply. The hard work of many years is ruined. This is because companies need to use a lot of materials in marketing today, and the risk of making mistakes has increased exponentially.

In the traditional era, the company's brand output may only have one TVC and a few print drafts in a year, but now it has to post tweets, notes, short videos, live broadcasts, etc. every day, and it is difficult to cover all internal reviews of the company;

Moreover, these content materials have high requirements for timeliness. They are created in the morning and will be released in the afternoon. It is extremely difficult to ensure efficiency while reviewing.

On the other hand, the marketing needs of enterprises are diversified, and there are more and more agencies and teams providing services to them. In the traditional era, a company may have only one brand agency and a media agency, but now companies need to have separate companies and personnel in e-commerce, live broadcast, self-media, grass planting, private domain and other sectors. Because of this, a large number of new people have flocked to the marketing industry in recent years, but they have not received systematic training and their professional qualities are of varying quality.

They only have traffic, only hot spots, only grasp pain points and urge orders, so they say things like "Women's feet are 5 times smelly than men", "Specialized in fishing for fresh women", "What is the difference between you who don't wear lipstick and men", "Chinese people don't use kitchen knives". Moreover, many agency companies have been established for a few years, with high personnel mobility and lack of daily operating procedures, which are extremely irregular. Once a link is wrong, it will not be the agency company but the company, and the company's brand assets will be damaged.

Faced with this series of problems, enterprises must attach importance to brand building and professional talents, and set some basic brand marketing principles, strengthen daily supervision, adhere to brand values, hold high marketing knowledge, and reiterate the bottom line of communication. In addition, we must strengthen training for internal employees and external agents to clarify what can be done and what cannot be done.

I think this "Ten Commandments on Corporate Marketing" is very meaningful for any company. Don't step on these big marketing pitfalls:

• Don’t take advantage of the hot spots of major social events, especially those involving natural disasters and casualties.
• Don’t touch on political, ethnic, and religious topics. Be cautious when using cultural symbols with symbols of nation and country.
• Don't make your customers feel disgusted. David Ogway said: Don't design advertisements that you don't even want your family to see. Are you willing to read the copy of the advertisement you wrote to your parents, sons and daughters?
• Fear demands are more suitable for public welfare rather than commercial advertising, and anxiety marketing should be moderate.
• Don’t plagiarize, don’t be lucky, the Internet has memories.
• Have a weak awareness of copyright, especially pictures and fonts.
• Do not discriminate against specific consumer groups, do not create gender confrontation, do not harm others and animals during communication and promotion, and damage the public environment.
• Avoid the father-like taste and don’t teach consumers how to live condescendingly.
• The best way to deal with crisis PR is to apologize, then correct it, and wait for time to dilute. Don't be arrogant, don't bully the weak, and don't try to fight against public opinion.
• It is recommended to train the advertising method first for newcomers to join.

For the specific interpretation of these terms, I have specially written the "Ten Commandments of Corporate Marketing". Please check it if you need it. The above is all about brand assets. First of all, you need to clarify the definition of brand assets, which components and modules are included; then based on the determined asset model, set specific brand building goals and measurement indicators, find measurement methods that conform to the actual situation of the enterprise to complete the diagnosis and evaluation of brand assets; finally, maintain and enhance brand assets through a series of means, so that the brand can continue to shine and heat up.

Notes to this article:

[1] David Aker, "Brand Master: 20 Rules for Shaping Successful Brands", CITIC Publishing House, 2015-7-1;

[2] Lu Taihong's "A Brief History of Brand Thought", Machinery Industry Press, 2020-6; [3] David Ake's "Management of Brand Assets" (collector's Edition), translated by Wu Jincao and Chang Xiaohong, Machinery Industry Press, 2019-1;

[4] David Aker, "Creating a Strong Brand" (Collectible Edition), translated by Li Zhaofeng, Machinery Industry Press, 2019-1;

[5] [7][9] Kevin Ryan Keller, "Strategic Brand Management" (3rd Edition), translated by Lu Taihong and Wu Shuilong, Renmin University of China Press, 2009-6-1;

[6] "A Brief Analysis of Trademark Brand Value Evaluation Methods", Source: China Intellectual Property News, 2018-7-2, http://ip.people.com.cn/n1/2018/0702/c179663-30099324.html;

[8][10] "Inter Brand Value Evaluation Model", source: Guayunfan Learning Network, 2021-5-13, https://www.guayunfan.com/baike/165668.html;

[11][15] Shi Yunhe, "Brand Personality: Falling in Love at First See to Ultimate Faith", Machinery Industry Press, 2019-7;

[12] "Analysis of the distribution of my country's brand development pattern and its internal industrial coordination - Comparison of brand value lists based on Interbrand and BrandZ", authors: Chen Feilong and Gong Yanping, Source: Lanzhou Journal, 2014-07;

[13] "Brand Finance (British Brand Financial Consulting Company): International Brand Evaluation System", author: Royal Charter GASCONY, source: Zhihu, 2022-05-29, https://zhuanlan.zhihu.com/p/506249922;

[14] Philip Kotler/Kevin Ryan Keller/Alexander Chernev, "Marketing Management" (16th Edition), CITIC Publishing Group, 2022-9-5;

Author: Husband

Source: WeChat public account "Empty Hand (ID: firesteal13)"