Brand Valuation Case Study

Question 1:

1.1

Brand equity is the set of associations and behavior on the part of a brands customers, channel members and parent corporation that permits the brand to earn greater volume or greater margins that it could without the brand name (Leuthesser, 1988 in Laforet, 2010). For example, the extra money that consumers are willing pay to buy a BMW instead of a cheaper version made one of BMWs competitors is an example of brand equity as the consumers are willing to pay extra for the name and heritage that comes with buying the BMW.

1.2

Brand valuation is a way of recognizing the value of brands as intangible assets on a company’s balance sheets and offering some information on companies brand equity. There are many different brand

For example if consumers willing to pay millions for Lamborghini’s then their brand value would equal what the people are willing to pay.

Question 2:

2.1

Brand assets are elements that are able to evoke the brand in the memory of consumers. Creative elements such as logos, slogans, colors, shapes etc. have the potential to become brand assets if they are unique and creative. For example if we look at the mini division of the BMW motor group, one of minis most valuable brand assets is that a mini is regarded as a friend or a person and more than just a car.

2.2

Brand strength refers to the strength of consumer demand for a brand relative to its competitors. For example BMW has 2 main competitors namely Audi and Mercedes so if BMW’s brand is strong they will sell more cars than their competitors as consumer demand for BMW is higher its competitors.

2.3

Brand value or brand equity refers to the additional money that consumers are willing to spend on a name brand rather an equivalent generic. For example consumers are willing to pay extra for a BMW instead of buying a cheaper equivalent as they feel they are buying a name and a legacy and not just a car.

Question

4.2

• Brand identity: the unique set of functional and mental associations the brand aspires to create or maintain. BMW’s brand identity would be high quality, luxury German cars.

• Brand image: what currently resides in the mind of consumers. BMW cars are seen as a status symbol of wealth and success.

• Brand positioning: the process by which companies try to create an image or identity in the minds of their target market for their brand. BMW is associated with performance and driving experience in the minds of its consumers.

• Brand equity: values that can make profits, increase market share and enhance organization performance. BMW has values such as good quality and well-engineered German luxury cars.

Section B

Question 1:

1.1

Brand resonance refers to a strong connection/ relationship between the consumer and a particular brand, therefore a brand resonance model is a graphical representation of the relationship between consumers and brands. It is made up of a pyramid which consists of 6 headings (resonance, judgments, feelings, performance, integrity and salience) broken down into 4 categories (identity, meaning, response and