Marketing Officer

Only available on StudyMode
  • Download(s) : 54
  • Published : February 26, 2013
Open Document
Text Preview
M

A

R

K

E

T

I

N

G

S

C

I

E

N

C

E

I

N

S

T

I

T

U

T

E

A Product-Market-Based Measure of Brand Equity
Kusum L. Ailawadi, Donald R. Lehmann, and Scott A. Neslin
WORKING PAPER • REPORT NO. 02-102 • 2002

W

O

R

K

I

N

G

P

A

P

E

R

S

E

R

I

E

S

M

A

R

K

E

T

I

N

G

S

C

I

E

N

C

E

I

N

S

T

I

T

U

T

E

A Product-Market-Based Measure of Brand Equity
Kusum L. Ailawadi, Donald R. Lehmann, and Scott A. Neslin
WORKING PAPER • REPORT NO. 02-102 • 2002

W

O

R

K

I

N

G

P

A

P

E

R

S

E

R

I

E

S

MSI was established in 1961 as a not-for-profit institute with the goal of bringing together business leaders and academics to create knowledge that will improve business performance. The primary mission was to provide intellectual leadership in marketing and its allied fields. Over the years, MSI’s global network of scholars from leading graduate schools of management and thought leaders from sponsoring corporations has expanded to encompass multiple business functions and disciplines. Issues of key importance to business performance are identified by the Board of Trustees, which represents MSI corporations and the academic community. MSI supports studies by academics on these issues and disseminates the results through conferences and workshops, as well as through its publications series. This report, prepared with the support of MSI, is being sent to you for your information and review. It is not to be reproduced or published, in any form or by any means, electronic or mechanical, without written permission from the Institute and the author. The views expressed in this report are not necessarily those of the Marketing Science Institute. Copyright © 2002 Kusum L. Ailawadi, Donald R. Lehmann, and Scott A. Neslin

MARKETING SCIENCE INSTITUTE • Report Summary #02-102

A Product-Market-Based Measure of Brand Equity
Kusum L. Ailawadi, Donald R. Lehmann, and Scott A. Neslin
In spite of all the attention brand equity has received in the past decade, relatively little is known about how to measure it or how it changes over time. In this report, authors Ailawadi, Lehmann, and Neslin propose a simple and easily quantifiable measure of brand equity and validate it by examining its behavior over time and across product categories, and in response to marketing activities such as advertising and promotion. They conceptualize product-market-level brand equity as the incremental revenue that the brand earns over the revenue it would earn if it were sold without the brand name. The equity of the brand is calculated as the difference in revenue (i.e., price x volume) between a branded good and the corresponding private label. They examine the measure for brands in 23 packaged goods categories over a seven-year period. The measure is found to be stable, yet still related in expected ways to marketing activities (that is, positively associated with advertising but not with promotion) and industry trends (in general it declined during the period when conventional wisdom suggests that national brands lost out to store brands). Further, the brand equity measure is positively associated with stockpileability and hedonic categories and negatively associated with private label quality. Finally, the “up” own-price elasticity, i.e., the effect on sales when price is increased, is significantly lower than the “down” own-price elasticity for high equity brands. Overall, this measure of brand equity offers several advantages to marketing managers. It is a simple measure that can serve as a practical standard of performance and it is readily calculable from existing internal statistics or publicly available data. Importantly, it should also have credibility with financial and operating managers who understand and see the value...
tracking img