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A comparison of
Brand Equity Indices – from ACNielsen | Winning Brands
– with in-market performance data reveals that Brand
Equity valuation can be a tangible and accountable measure
for understanding the extent to which Brand Equity drives
market share. Marketers can therefore develop strategies to
build market share based on strengthening the sources driving
brand equity or other marketing variables – such as
distribution, pricing or targeting – that may be impeding
the brand’s in-market performance.
A comparison of the Brand Equity Indices of FMCG brands, as
well as a few in other industries, reveals that for most,
their BEIs relative to the competition are in proportion to
the market shares for the category. This demonstrates that
brand equity is a strong driver of market share, and the sources
of brand equity – familiarity and brand associations
– should be examined to determine how share can be built.
However, in some cases, BEIs do not correlate with the brand’s
in-market performance, indicating there are factors other
than Brand Equity, eg distribution, pricing or targeting,
that must be addressed to build share.
Strengthen Sources of Brand Equity to Drive Market Share
Case Study 1: Multinational Personal
Care Brand
Brand A should strengthen its brand image in Country X and
familiarity in Country Y
All key brands in
the category across two countries are multinational with relative
brand equity indices in proportion to market shares. In both
countries, Brand A must strengthen its equity to drive market
share. The relative importance of the sources of brand equity
for the category in both countries is fairly similar. In Country
X, Brand A and B are level on familiarity but A has negative
'old-fashioned' brand associations. Brand A must focus on
becoming more contemporary and create a distinct positioning
on associations that are strong drivers of brand equity. In
Country Y, however, Brand A has very low familiarity and must
focus on strengthening its awareness and brand consideration.
Case
Study 2: Web Portals
Brand equity metrics
were modified to compute Brand Equity Indices, which were
measures of brand loyalty based on ‘stickiness’
of web portals. Brand equity indices were in proportion to
market performance – measured by the number of hits
to the portal according to Nielsen//NetRatings.
In this category, awareness contributed 55% of the source
of brand equity (in contrast to a median of 32% across FMCG
categories) and the weaker web portals, Brands C and D, suffered
from relatively low brand awareness. To drive market performance,
web portals C and D must first increase their brand awareness.
Brand Equity Out of Proportion to Market Performance: Focus
on Other Marketing Mix Variables to Build Share
Case Study 3: Food
Brand A should increase its distribution
In the absence of
brand equity valuation it could be concluded that Brand A’s
equity must be strengthened to increase market shares. However,
Brand A has stronger equity than Brand B, but lower distribution,
resulting in weaker market performance. Brand A should maintain
its familiarity levels and current positioning but increase
its distribution coverage.
Case
Study 4: Baby Food
Brand A should leverage its equity and launch a low price
line extension
Equity for Brand
A is significantly stronger than for Brand C, but their market
shares are comparable. Brand A is priced at a 151% premium
over C, which results in a lower brand equity to market share
ratio for Brand A. Brand A has strong brand awareness and
a distinctive image on attributes that are important in the
category, which drive its strong brand equity. However, due
to its price premium, its brand equity does not translate
into an equitable market share. Brand A can leverage its equity
and launch a lower price line extension to compete with Brand
C and increase overall brand share.
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