Brand Strength

As a consequence of its attributes, the strength of the brand can be gauged. Another set of measures needs to be used to assess brand strength.

Leadership not only identifies the most successful brand, but also whether it is technologically or socially innovative within its category. This dimension can be measured, besides using market audit data, with questions such as –

Do you regard brand X as being a leading, ‘rather than following brand?’

‘Is brand X the first to break with tradition?’

‘Does brand X offer you the latest technological development?’

‘Is brand X a fashion leader in its category?’

The price premium reflects the brand’s ability to command a higher price or to be less price sensitive than its competitors.

This measure needs to be defined relative to those brands consumers consider as substitutes. A brand’s price premium can be identified by informing consumers of the price of competitors’ brands, then asking consumers how much more, or less, they would pay for the brand. A more involved, albeit some argue a more reliable method, is to use trade-off analysis. A simpler way of assessing the price premium of the brand is employed by Intel who regularly interview potential customers, asking how much discount they would require before they would accept a PC without ‘Intel Inside’.

Price premium is not a suitable measure in markets with legal restrictions which prevent companies from charging a premium price. Also, it is not appropriate for strong brands, such as Swatch, that intentionally charge lower prices to keep competitors out of the market, or for brands such as Mars Bars, that have no direct substitutes for their products.

There are numerous measures of loyalty, for example measuring actual purchasing behavior over time which reflects the degree of satisfaction; existing customers have with the brand. Loyalty can also be gauged asking questions such as –

‘Next time you buy this product category, would you buy this brand again?’

‘Thinking about the few brands of this product category that you often buy, is this brand one of your more frequently bought brands?’

‘If someone were thinking of buying this product, which brand would you recommend?’

Managers should be aware that the responses to these questions may reflect past ‘behavior rather than intended future behavior and that the favorableness of replies may be more a reflection of brand size than loyalty.

Another method of measuring loyalty is provided by the concept of ‘Share of Category Requirement’ (SCR). The SCR for, Ski yogurts volume expressed as a share of all yogurt bought by consumers who purchase Ski yogurt during a defined period, such as a yea An alternative is to define loyalty by considering consumers’ purchasing patterns over time and estimating the probability of their buying the brand on the next purchasing occasion. However, this analysis should also include data on price variations, as most patterns are strongly influenced by promotions.

Market share and distribution data indicates brand strength without recourse to consumer surveys. To obtain realistic results, however, marketers need to define the market and the competitor set from consumers’ perspectives and recognize that market share indicators are often distorted by short-term price and promotional activities.

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