building a portfolio of brand equity metrics that are sensitive to advertising

Charlotte Amalie Riewerts Eriksen

Student thesis: Master thesis

Abstract

In today’s market place where is becomes increasingly difficult to differentiate own products from competitors’, brands are increasingly recognized as one of the most valuable intangible assets. Accordingly, companies are concerned about building a brand tracking measurement system with a reliable and sensitive set of brand equity metrics. This is also the situation for the media agency Mindshare. The company has experienced how some of their adopted brand equity metrics are not sensitive enough to tap the dynamics of the market for its client brands. This raised the opportunity for this thesis. Consequently, the purpose is to investigate how a portfolio of brand equity metrics, which are sensitive to advertising, can be selected and moreover to study what the effect of TV advertising is on the chosen metrics. Basing the analysis on one of Mindshare’s client brands, Royal Beer, enables a concrete foundation for the analysis. By taking a starting point in the current brand equity literature, the first step is taken towards selecting a portfolio of sensitive brand equity metrics. Thus, 21 brand equity metrics are identified to reflect customer-based brand equity. The metrics are chosen based on four criteria, the most important ones being that they frequently occurs in the literature and has importance to top and marketing management. While this list constitutes the “optimal” list of metrics, the thesis is constrained by the metrics already accessible through Mindshare’s current brand tracking system. The second step is thus to compare Mindshare’s current brand tracking system with the 21 metrics and discussing them in terms of relevance for Royal Beer. Accordingly, nine brand equity metrics are selected to be included in the quantitative analysis. Through taking a deeper look into the literature surrounding how advertising works on the consumer, adstock is identified as the relevant concept for modeling the effect of advertising. Hence, extracting the TRP levels for Royal Beer and an aggregate of the four largest competitors in the beer category and convert them into adstock levels, is a necessary part of the analysis. Based on five hypotheses developed throughout the individual chapters, the problem statement is investigated through nine separate regression analyses. The empirical analysis constitutes the last step in developing a portfolio of brand equity metrics, which are sensitive to advertising. Although all nine metrics proves to be sensitive to TV advertising to some extent, the findings show that especially five brand equity metrics are sensitive and affected by TV advertising in the short run. These metrics are: popularity, unaided brand awareness, brand acceptance, perceived value and behavioral loyalty. The effect of advertising on these five measures is investigated through the correlation coefficient, which ranges from 0.26 to 0.51. The thesis also acknowledge that marketers have both short-term and long-term goals and three extra brand equity metrics are argued to be important in the long run in order to maintain and build a strong brand. These are familiarity, differentiation and perceived quality.

EducationsMSc in International Marketing and Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2012
Number of pages121