Going deeper: Evaluating Brand Equity at a more detailed level - PowerPoint PPT Presentation

Going deeper: Evaluating Brand Equity at a more detailed level Alistair Davidse and Dieudonné Kantu

Introduction Usage of a brand depends on the situation/occasion: • Restaurant – family meal vs. romantic meal • Drinks with a meal – breakfast vs. supper • In private vs. in public 2

Selected Literature • Bearden and Woodside (1976): • Showed that brand purchase intention can be better predicted by including consumption situations along with an aggregated attitude towards the brand variable • Orth (2005): • Found that people will choose different brands for different situations • Attributes desired in a brand a function of consumer personality, situational disposition and demographics 3

Occasion-based Equity If usage changes depending on the situation/occasion then it is reasonable to expect brand equity to change as well. But asking respondents to evaluate every brand at every occasion could substantially increase the questionnaire length. 4

Equity measure: Attitudinal Equity Attitudinal Equity measures a psychological desire for a brand by transforming the ranks of the scores. 1 Attitudinal Equity i =     1  m s Rank i      s  i  1 Rank i   5

Brand 1 Brand 2 Brand 3 Brand 4 Brand 5 Respondent 1 9 6 3 3 3 Respondent 2 9 8 6 3 3 Respondent 3 9 9 9 8 8 Respondent 4 9 9 3 5 3 Respondent 5 9 10 3 3 3 • All five respondents rate Brand 1 as 9 out of 10 – classic approaches would conclude it is a very strong position • But Respondent 5 rates Brand 2 as 10, so this brand is their preferred one • Respondent 3 rates Brands 2 and 3 equal to Brand 1, and Respondent 4 rates Brand 2 equal to Brand 1 – shared preference • Share of Wallet for Respondents 1 and 2 will be higher than for 3, 4, and 5 Relative rating shows a very different story and correlates better with market share 6

Occasion-based Attitudinal Equity Proposed method: 1. Establish which brand a respondent prefers to use for each occasion 2. Rank the preferred brand first and the other brands according to their original scores and calculate Attitudinal Equity using those ranks. Score Original Rank New Rank Brand 1 3 5 5 Brand 2 5 4 4 Brand 5 is the Brand 3 8 2 3 preferred brand Brand 4 9 1 2 Brand 5 6 3 1 7

Applying the method • Italian alcoholic beverages study • Respondents were asked to indicate their preferred brand for three out of thirteen occasions • 1523 respondents, each occasion had 228 to 633 responses 8

Top three brands overall and for each occasion Overall AE At a club AE In a bar AE Party at home AE Brand 1 9.6 Brand 4 9.4 Brand 1 9.4 Brand 2 9.3 Brand 2 8.6 Brand 1 8.4 Brand 4 8.7 Brand 1 9.1 Brand 3 5.2 Brand 5 6.7 Brand 2 6.0 Brand 3 6.9 Before going Having friends At the end of out AE Watching TV AE over for a drink AE a special meal AE Brand 1 7.4 Brand 1 7.7 Brand 2 9.8 Brand 2 10.0 Brand 2 5.9 Brand 2 7.4 Brand 1 9.0 Brand 1 9.2 Brand 4 5.8 Brand 3 5.4 Brand 3 6.4 Brand 3 6.1 At the end of an everyday At the end of Attending an At a meal AE a formal meal AE event AE restaurant AE Brand 2 8.0 Brand 2 9.4 Brand 1 8.1 Brand 2 11.4 Brand 1 6.9 Brand 1 8.3 Brand 2 6.1 Brand 3 9.9 Brand 3 6.6 Brand 3 6.3 Brand 4 6.0 Brand 1 7.5 Brand 2 is first for more occasions than Brand 1, but second overall. This could be due to its relatively poorer performance for clubs and bars. 9

Occasion/Age Correspondence Analysis 10

Occasion/Age Correspondence Analysis The following patterns emerge from the correspondence analysis: • The 18-24 age group is more associated with drinking at a bar • The 25-29 age group is associated with partying in a disco/club • The 35-39 age group is associated with drinking at restaurant • The 40-44 age group is associated with drinking at home with friends • The 45-49 age group is associated with drinking at formal meal or at a party at home The general trend suggests that consumers below 35 tend to consume the brand at parties or pubs. Those above 35 prefer to drink at home or functions. Analysis like this can be used in conjunction with the occasion-based Attitudinal Equity as a dependent variable. 11

Validating the approach • Is it reasonable to expect equity to differ depending on the occasion? • Is the “preferred brand” method a valid one? • How well does it link to real world behaviour? 12

Validating the approach – Will equity differ? • American mosquito repellent study • Respondents gave overall ratings for each brand • Also rated the performance of brands for three out of five occasions • We can compare overall level Attitudinal Equity with occasion Attitudinal Equity • 1454 respondents, each occasion had 496 to 712 responses 13

Top five brands overall and for each occasion Camping and Overall AE Entertaining AE related activities AE Brand 1 22.7 Brand 1 20.4 Brand 1 30.3 Brand 2 11.5 Brand 2 13.2 Brand 5 10.4 Brand 3 11.1 Brand 3 12.3 Brand 7 10.6 Brand 4 9.5 Brand 4 11.2 Brand 4 8.6 Brand 5 7.3 Brand 6 8.7 Brand 3 8.4 Casual outdoor activity Working in Relaxing in your away from home AE your yard AE yard AE Brand 1 21.7 Brand 1 26.1 Brand 1 21.9 Brand 4 13.0 Brand 2 11.4 Brand 2 14.6 Brand 3 11.3 Brand 3 10.5 Brand 3 13.1 Brand 2 11.2 Brand 4 10.0 Brand 4 8.0 Brand 5 6.2 Brand 5 7.8 Brand 6 7.1 Each occasion has at least one brand whose occasion Attitudinal Equity is significantly different from its overall Attitudinal Equity. 14

Validating the approach – Preferred brand • Highest-rated brand at each occasion can be regarded as the preferred brand • Can rank this brand first and rank the remaining brands according to their overall ratings 15

Original and New occasion Attitudinal Equity Camping and related Casual outdoor activity Entertaining activities away from home Original New Original New Original New Brand 3 20.4 20.5 Brand 3 30.3 30.9 Brand 3 21.7 21.8 Brand 1 13.2 13.4 Brand 9 10.4 10.5 Brand 5 13.0 13.1 Brand 4 12.3 12.6 Brand 8 10.6 10.7 Brand 4 11.3 11.1 Brand 5 11.2 11.1 Brand 5 8.6 8.6 Brand 1 11.2 11.0 Brand 6 8.7 8.8 Brand 4 8.4 8.3 Brand 9 6.2 6.2 Working in your yard Relaxing in your yard Original New Original New Brand 3 26.1 26.4 Brand 3 21.6 21.9 Brand 1 11.4 11.2 Brand 1 14.9 14.6 Brand 4 10.5 10.5 Brand 4 13.3 13.1 Brand 5 10.0 10.1 Brand 5 7.8 8.0 Brand 9 7.8 8.0 Brand 6 7.1 7.1 Most brands do not show a significant difference between the original occasion Attitudinal Equity and the new “preferred brand” occasion Attitudinal Equity. 16

Validating the approach – Real world behaviour • UK Retailer study – 500 respondents • Respondents rated retailers on various departments/aspects from which the preferred retailer for each department can be determined • Respondents also indicated whether they have used that department for each retailer • Can compare overall AE and department AE with usage of departments 17

Average correlation with department usage Overall AE Department AE Produce Department 0.50 0.75 Meat Department 0.50 0.75 Fish Department 0.49 0.76 Bakery 0.50 0.76 Delicatessen 0.49 0.76 Other Grocery Areas 0.51 0.74 Non-Grocery Sections 0.50 0.75 Loyalty Program 0.43 0.77 Each department shows an improvement in the correlation with claimed usage of that department when comparing the department Attitudinal Equity against the overall Attitudinal Equity. 18

Conclusions • Brand equity can differ depending on the occasion • Asking the preferred brand for each occasion is a practical way of evaluating occasions without making the questionnaire too long • The preferred brand approach yields similar results to rating every brand for each occasion • An occasion-based Attitudinal Equity offers an improved correlation with usage 19