There are two types of method employed to measure brand equity at source. These two methods are qualitative research methods and quantitative research methods. Qualitative research methods are ideal for measuring brand association where in consumer perceptions towards brand are captured. Quantitative research methods are perfect to understand brand awareness within consumer.
Both above mention methods are only able to capture and measure one dimension of brand equity at a time. But brand equity is multi-dimensional and therefore it is important to measure each as it will help in taking tactical as well as strategically important decision.
Comparative methods and holistic methods are designed to directly analyze brand equity. Comparative methods tend to analyze effects of consumer perception towards brand in respect to marketing programs, in terms of change in brand awareness. Holistic methods are designed to analyze the total effect of brand equity. These methods will provide necessary tools to measure outcome
of brand equity. Consumer bases brand equity will lead to loyal customer base, point of differentiation against competitors get better margins, more acceptances of marketing communication, strong standing in distribution channel and also support any form of brand extension.
Comparative methods are research methods which measure brand equity associated with brand association and high level of brand awareness. Comparative methods are again of different types depending on usage of marketing. Brand based comparative methods looks to measure consumer response against same marketing program for different brands. Marketing based comparative method looks to measure consumer response for same brand under different marketing program. Conjoint comparative method looks to combine both brand based comparative method and marketing based comparative method. Each method has its application and drawbacks.
Brand based comparative method, as mentioned, tries to examine consumerâ€™s response to identical marketing response to different brand in the same product category. This could be competitorâ€™s brand, any non-existing brand or preferred brand in that category. A classic example of such comparative method is experiment conducted by Larry Percy; in which consumer were ask to map beer taste and preference. In one first instance brand name were disclosed whereas on second instance brand name was not disclosed. Consumer showed more loyalty when brand name was disclosed. Brand based method really isolated true value of brand name and this concept especially holds true when there is a change in marketing program from past efforts.
Marketing based method tries to understand consumer response under different marketing promotions. Here focus is to understand how much influence marketing program has on brand performance. One such experiment would be to understand consumer response at different price levels; this will reveal level of tolerance before consumer switch to another brand. Marketing based method would also be effective in understanding consumer response to similar marketing program across various geographical locations. The main advantage of marketing based method is that it can be applicable to any marketing program. However drawback of this method is that it is difficult to separate whether consumer preference is towards the brand or product category in general, meaning the price premium discovered may applicable to other brand in similar product category also.
Conjoint method allows simultaneously study of brand as well as marketing program. This method also employs statistical calculation making it possible to study many attributes or association at one time. Disadvantage of this method is that too much experimentation will may increase consumer expectation with respect to the brand.
Holistic method is used to determine financial value or definite utility value of the brand. Holistic method looks to measure consumer brand preference over consumer brand response. Residual holistic approach measures brand equity after subtracting physical attributes of the brand. Valuation holistic approach looks to measure brand equity in financial term which is important during valuation of whole firm in activities of merger/acquisition, fund raising etc.
Comparative method and Holistic method are employed to measure benefit of consumer based brand equity. Comparative method measures consumer response where as holistic method measure consumer brand consumer preference. These methods are relevant to calculate return of investment for marketing activities.