Principia Consulting

Strategy Consulting for Companies
in Materials-Related Industries

Brand Equity Measurement

Brand equity is the incremental profit obtained for a branded product in comparison to competitive offerings. Brand equity is the platform upon which a defensible competitive positioning can be built, ensuring future earnings and increasing shareholder value. Brand equity derives from a combination of factors including the degree of brand name recognition, perceived brand quality, strong mental and emotional associations, as well as other intangible assets such as patents, trademarks, and channel relationships.

A number of techniques are available to measure and track brand equity. However, a more important issue to address is: What is the source of my company's brand equity? To understand the sources of brand equity, Principia Partners divides it into four components:

Familiarity
Product attributes/performance
Product availability
Corporate image/value perception

By applying a robust brand equity model that is based on the fact that awareness breeds familiarity and familiarity along with positive experience breeds favoritism. By measuring familiarity and favoritism, the underlying sources of a brand's equity can be determined as well as the absolute value (at a point in time) of the brand. Principia's methodology also provides the market share premium (how much additional share you garner due to branding) and the price premium attributable to brand equity. The model permits 'what-if' analyses to test changes to your marketing strategy, product mix, pricing strategy, and other factors.

CASE STUDIES

Fortune 100 Chemical Producers

Brand Equity Measurement:
Assess Corporate Image for Fortune 100 Chemical Producers

Challenge:
As part of an industry-sponsored public relations campaign, a leading chemical industry association needed to assess perceptions of chemicals and chemical companies held by various target audiences.

Principia developed an image assessment program to measure the brand image of 20 leading chemical producers, as well as certain key products among consumers, municipal governments, the press, financial institutions, and various special interest groups. The research measured the importance of a range of both positive and negative attributes of chemicals and the companies that produce them, and determined the key brand images associated with the producers.

Result:
The association uses the program results in programming its public relations campaign and in working with the media to present the positive impact that chemicals have on everyday life.

Brand Equity Measurement:
Identify Key Value Drivers for ETP Producers

Challenge:
An producer of specialty ETP resins and compounds required insight to the key profit drivers in the ETP industry.

Principia collected sales and operating data for 30 ETP producers in five world market regions, and assessed these suppliers' product lines, approach to market, and technical resources. A multivariate regression model quantified the importance of such factors as critical mass, product line breadth, and applications development support. More than 20 factors were assessed to identify the key determinants of value creation in the ETP industry.

Result:
The company now clearly understands the impact that its strategic decisions will have on future profitability of its ETP business. Several longstanding strategies were modified to leverage key profit drivers in the short term. New investments in product development and technical resources are assessed using the model to determine their likely effect.

Brand Equity Measurement:
Quantify Brand Equity for Wood Composite Decking Products

Challenge:
In the rapidly evolving market for wood composite decking, the Client found it difficult to maintain pricing discipline and to differentiate itself among an ever-growing array of competitors.

Principia designed and conducted a combined adaptive conjoint and choice-based conjoint program to pinpoint the reasons that customers selected various decking products, and the perceived value of each product feature, including product brand.

The analysis was conducted separately for each key customer type: retailer, contractor, and homeowner. These statistical techniques provide very accurate insight into the actual purchase decision processes, and results are used to tailor product, pricing, and marketing strategies.

Result:
The company gained an accurate measure of price sensitivity for its product relative to key competitive products, and set a pricing strategy to yield the greatest share while maintaining margins. The company tailored its marketing materials for distribution channels and end users (i.e. contractors, homeowners) to focus on factors important to each group. The overall brand image was strengthened.

Brand Equity Measurement:
Determining Brand Value in Specialty Electronic Chemicals

Challenge:
Following the merger of two smaller companies, an international chemical company needed to understand which of the two brand names were most valuable for its new business unit. The new Client company would be focused on the specialty electronic chemicals business.

Principia investigated the value of each brand, and determined which created a positive and preferred value perception among OEMs in the electronics industry. The assignment provided the Client with a mapping of the sources of brand equity, and Principia recommended ways the new business unit could leverage the brand, including the likely price premium attributable to the brand for new products and services.

Result:
The Client used the analysis to plan their overall marketing strategy, product and service mix, and determine pricing as they entered the market, helping improve both top and bottom line value in the new business unit.

Brand Equity Measurement:
Measuring Brand Equity for Heavy Truck Wheel Producer

Challenge:
A leading producer of heavy truck wheels sought ways to increase market share in truck wheels without decreasing market prices.

Principia conducted an in-depth market assessment in parallel with a detailed image and branding study. Several key attributes of the company's brand correlated strongly with important market needs. A brand positioning was developed and tested with large existing and potential customers of truck wheels, and was found to be highly desirable.

Result:
The company found that its product brand strength was primarily driven by its superior product performance. The ability to increase market share was a function of improved sales outreach and follow-up customer service. No changes in pricing were required and the company improved market share by 10% within one year of the engagement.