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Brand Equity – The classic definition is: a set of brand Assets and liabilities linked to a brand, its name, and symbol that add to (or Subtract from) the value provided by a product or service to a firm and/or that Firm’s customers.

Types of brand Equity

1.Customer brand equity is the value Customers receive from a brand, less the value they receive from a generic product. Customer brand equity comprises value received before purchasepre-purchase Equity, and value received after purchase — post purchase equity.

2.Firm Brand Equity derives from customer brand equity when the firm secures in its customers brand awareness, Positive attitudes, high perceived equality, positive word-of-mouth, intention To purchase, purchase, brand loyalty, positive brand image and association (or Brand personality), and satisfactions

Pre-purchase Equity: what customers believe before purchase that They will receive after purchase. Reduces customer search cost and purchase Risk.

Post-purchase Equity enhances the customer consumption experience. After purchase customers actually receive some combination of functional, Psychological and economic values.

Financial Market methods views of brand equity (market value Method, replacement methods, etc.)

-Market value method: The market provides the best FBE measure; this approach works well for publicly Traded corporate brands.

·FBE = markets value – book value + Plus nonbrand intangibles like human resources, know-how, and patents.

-When market value does not exist — most product brands — the firm must use internal methods.

-Internal Methods

1.Replacement cost - The firm multiplies The anticipated brand-replacement cost by the probability of success

2.Cash flow - This approach is Intuitively more appealing but estimating future cash flows is difficult. Interbrand (brand consultant) uses a proprietary method to estimate FBE based On future cash flows

Brand Identity – What the firm wants the brand to mean to Customers, including brand personality and the brand promise

Line Extension – New but similar product to the product Line, using the same brand name. EXAMPLE: Jell-O comes in different colors and Flavors but same brand name

Flanker Brand – New yet similar brand product, but develops A new brand, or a distinguishing sub brand.

Multibranding Strategy – In multibranding – aka House of Brands Strategy – the firms uses multiple brands for its various products. The firm Seeks target-customer loyalty to individual brands, but not necessarily to the Parent-company brand.

Umbrella Branding – Emphasizes a monolithic brand for several Products/lines.

Product Portfolio – Describes the set of products that the firm Or business unit offers

Portfolio management - is the art and science of making decisions about investment mix and Policy, matching investments to objectives, asset allocation for individuals And institutions, and balancing risk against performance.

Growth-share Matrix (dogs, stars, etc.) – AKA the Boston Consulting group’s product portfolio matrix (BCG matrix) is designed to help With long-term strategic planning, to help a business consider growth Opportunities by reviewing its portfolio of products to decide where to invest, To discontinue or develop products

Dogs: These Are products with low growth or market share.

Question marks or Problem Child: Products in high growth markets With low market share.

Stars: Products In high growth markets with high market share.

Cash cows: Products In low growth markets with high market share

Positive Complementarity – Customers who buy one type of Product are more likely to buy a related product

Ex: Chips and Sandwich

Negative Complementarity – Customer dissatisfaction with one Product may negatively affect sales of another

Equation for return On asset = Net income / Average Total Assets

Rational Advertising - focus on people’s sense of logic

Comparative Advertising - advertising demonstrates superiority over competition

Refutational advertising - a special case of two side advertising explicitly mentioning competitor Claims but then directly refuting them

Selecting Advertising media
- Reach - Percentage of people exposed to ad.
- Frequency - Number of times a person is exposed to advertisement.
- Gross rating points = Reach * Frequency

Timing Pattern: When the advertising will appear. The major options Are

-Flighting - Repeated high advertising Levels followed by low (or no) advertising

Unaided Recall - Widely used for broadcast advertising. The Researcher asks subjects what advertising they remember, without prompting.

Tracking Studies - measure customer responses over time, using Either a customer panel or randomly selected respondents.


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