[et_pb_section fb_built=”1″ _builder_version=”3.29.3″ custom_padding=”1px|||||” global_colors_info=”{}”][et_pb_row _builder_version=”3.29.3″ custom_padding=”0px|||||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”3.29.3″ global_colors_info=”{}”][et_pb_text _builder_version=”4.11.0″ text_text_color=”#000000″ custom_margin=”36px|||||” inline_fonts=”Trebuchet” global_colors_info=”{}”]<\/p>\n
Brand equity, as\u00a0the central control variable in brand management, can be regarded\u00a0from\u00a0a\u00a0financial\u00a0as well as\u00a0from a behavioral perspective.\u00a0In financial terms, brand equity represents the value of all future cash surpluses the company\u00a0is able to\u00a0generate from the brand.\u00a0In terms of behavioral science, measurement takes place\u00a0with reference to the\u00a0associations the brand conjures up in the\u00a0minds of consumers.\u00a0Yet brand equity\u00a0is determined not\u00a0merely\u00a0by\u00a0customer\u00a0activities and opinions, but also by those of competitors, trading partners,\u00a0and capital providers. Due to international accounting regulations, many large companies, notably those operating in the United States,\u00a0even have to report their brand equity in the balance sheet. But how\u00a0one\u00a0measure\u00a0brand equity in the first place?\u00a0Below, we take a look at models that\u00a0models that combine both perspectives.<\/span>\u00a0<\/span><\/p>\n Monetary brand equity can be either estimated or\u00a0forensically\u00a0measured by\u00a0using\u00a0various models.\u00a0Generally, measurement models consist of several parts:\u00a0some methods identify the proportion of sales\u00a0attributable to\u00a0the brand, then multiply that figure by\u00a0total sales to\u00a0arrive at a calculation of\u00a0brand value. Other models use a more forward-looking approach, calculating the potential future revenue that the company could generate using the brand.\u00a0Then\u00a0this potential revenue\u00a0is discounted\u00a0to calculate a\u00a0\u201cnet present value\u201d\u00a0of the brand.\u00a0The brand\u2019s potential future stock, among other things,\u00a0will shape\u00a0this discount rate.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.11.0″ custom_margin=”61px|||||” global_colors_info=”{}”]<\/p>\n In all models, one\u00a0influential factor is brand strength as\u00a0perceived\u00a0by the target audience. This\u00a0factor\u00a0is usually surveyed qualitatively and quantitatively in\u00a0a two-stage process.\u00a0Depending on the brand model and provider selected,\u00a0the survey measures\u00a0dimensions such as relevance, uniqueness,\u00a0and emotional attachment, among others.\u00a0Next,\u00a0the contribution of brand strength to brand performance,\u00a0is assessed. For example, an analysis is performed of\u00a0the\u00a0brand\u2019s\u00a0influence on purchase decisions.\u00a0Hence the\u00a0models\u00a0measure the\u00a0degree to which the brand is contributing to sales.<\/span>\u00a0<\/span><\/p>\n In order to estimate this contribution, sellers will use varying approaches. Some sellers present the contribution as a percentage figure, relying upon extensive data sources containing information on customers and brands worldwide. Other companies make the greatest possible use\u00a0of existing\u00a0company data on target groups and competitors, in order to assess the impact of brand strength.<\/span>\u00a0<\/span><\/p>\n The primary advantage of models that use a company\u2019s own data is that such models will dispense with a standard model; instead, they apply basic theoretical insights to the brand\u2019s individual situation. Doing so allows them to refine brand valuation to the point at which it can even, in some cases, withstand an auditor\u2019s scrutiny. Some research institutes also offer information on brand strength as compared to competitors. The type of data used by the research institutes will often depend upon the company\u2019s size and nature – e.g., global market leaders prefer to rely on publicly available information where appropriate, whereas in the case of a planned ISO certification, more detailed analyses of controlling data and\/or in-house and outside interviews are also used.<\/span>\u00a0<\/span><\/p>\n If you want to determine brand equity,\u00a0including your monetary brand equity, several measurement models\u00a0are\u00a0available\u00a0to you.\u00a0Any\u00a0decision\u00a0in favor of\u00a0against a\u00a0particular\u00a0model\u00a0will\u00a0depends on the\u00a0data available, and, if applicable, the brand models already\u00a0being\u00a0used to measure brand strength. Further criteria are planned balance sheets or ISO certifications.<\/span>\u00a0<\/span><\/p>\n With BESTVISO\u2019s consulting services, your company\u00a0will enjoy\u00a0access to the insights needed to select the best\u00a0research\u00a0institutes and the most appropriate, effective model\u00a0in order to\u00a0ensure\u00a0results of the highest quality.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" Brand equity, as\u00a0the central control variable in brand management, can be regarded\u00a0from\u00a0a\u00a0financial\u00a0as well as\u00a0from a behavioral perspective.\u00a0In financial terms, brand equity represents the value of all future cash surpluses the company\u00a0is able to\u00a0generate from the brand.\u00a0In terms of behavioral science, measurement takes place\u00a0with reference to the\u00a0associations the brand conjures up in the\u00a0minds of consumers.\u00a0Yet brand […]<\/p>\n","protected":false},"author":4,"featured_media":11007,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[71],"tags":[],"class_list":["post-11020","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brand-equity"],"yoast_head":"\nMonetary brand equity measurement<\/h2>\n
Valuing brand strength and brand performance<\/h2>\n
Conclusion<\/h2>\n