Measuring Brand Equity

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as published on October 1, 2010 by the Dallas Business Journal

Brand Equity Sources

Branding adds a dimension that differentiates a product from others that meet the same need. Regardless, whether the product is a physical product, a service, a retail store, an organization, a person, a place, or an idea, they are all subject to a “branding” process in customers’ mind. In the brand realm, reality is always perception.

As customers’ experience competing products and are exposed to different marketing messages, they associate certain attributes and benefits to these products and perceive differences among competing products based on what they value the most. That’s how brands are born.

Customers’ brand associations may or may not match the intended message marketers want to convey about the brand and the company behind it, which is why it is important to keep an eye on the brand’s health and sources of brand equity with the help of market research.

Branding is about differentiation, which can be rational and tangible (e.g. product performance) or more emotional and symbolic (e.g. what it represents, what feelings it elicits). The sum of all the customers’ associations, perceptions and feelings about a product’s attributes, performance, its brand name, symbols, and the company associated with it gives equity to a brand. Brand equity plays an important role in customers’ purchase intentions and behavior. Companies that track sources of brand equity, how they affect customer behavior, and how they change over time are often steps ahead of the competition.

Measuring brand equity sources requires that marketers have an in-depth understanding of:

  • How customers shop for and use the products
  • What customers think about the brand and its competitors
  • What aspect of awareness and brand image have an impact on customer response

Several qualitative and quantitative research techniques are used to identify sources of brand equity. Qualitative measures can help identify associations to a brand, its strength, favorability and uniqueness. However, quantitative measures are desirable to provide a more solid ground for strategic and tactical recommendations. Quantitative brand tracking studies are often used for this purpose. They act as a marketer’s stethoscope to listen to the brand’s heart and check how healthy it is.

When setting up a brand tracking study, brand managers should include measures of brand awareness, usage, attitudes, and perceptions. Different aspects of awareness such as recall and recognition tell us how strong a brand is, but depending on how and when the purchase decision is made (e.g. at point of purchase or away from it) one may be more important than the other for different product categories.

Usage and customers’ experience with different aspects of product have an impact on perceptions about product performance, but often go beyond product attributes to encompass an overall attitude towards the brand and its maker. In the quest for sources of brand equity, product and non-product related associations and perceptions should be tracked. All these measurements will inform marketers about how to design marketing strategies and tactics that strengthen a brand’s appeal, uniqueness and thus increase its equity.


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