RETURN ON BRAND INVESTMENT â€“ ROBI:Brand dynamics, On the relevance dimension

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Brand Management (MKT624)

Lesson 39

RETURN ON BRAND INVESTMENT ROBI

Introduction

All strategic moves are made according to a game plan that we have learnt through different

stages of the brand management process. From brand picture to positioning to channels to

communication are all strategic formulations that require investment. If these formulations are

put right, the result you get is brand value and profitability. To what extent the strategies in

place are giving return on brand investment should be measured so that you can make

adjustments in your strategic moves whenever and wherever those are required. The lecture

throws light on that!

Return on brand investment ROBI

The basic idea of ROBI is to measure brand's performance. To manage your brand well, you

have got to measure its movement in terms of changing preferences and loyalties. The most

important challenge here is to see that loyalty to the brand does not erode, for it is one basic

measure of keeping your customers, bringing in new ones, and keeping them loyal as well.

There are different measures that are employed to gauge the strategic movement and growth of

your brand. Such measures allow insights into the following factors or formulations that

organizations have in place to ensure growth of their brands:

· Allow to see that overall strategic movement is according to the strategic plans.

· Offer insights into any changes that may be required in adjusting brand position or

further strengthening it.

· Let you adjust or reinforce communication plans for consistent focus.

· Offer insights into provision of resources in a more effective way.

· Let you identify brand strength and potential areas of growth within and across

categories, that is, line or brand stretch.

Why measure performance?

It can be argued that in the presence of accounting measures like revenues, margins, and returns

on revenues and investments, why measure brand's performance? The achievement of financial

goals is a requisite of the highest order. What else is needed? These are interesting questions

and should be answered.

Beneath the surface of accounting and other statistical figures are strategic factors that cause

subtle changes to brand's movement as time passes by. It therefore becomes important to track

such changes in order to make right decisions and adjust tactical moves relating those changes.

In other words, we measure, on the one hand, financial results, and, on the other, strategic

factors that cause those results.

Brand dynamics

There is a cause-and-effect relationship between strategic factors and financial measures. The

strategic factors, according to the most relevant brand equity model by Young and Rubicam

(Y&R) are1:

1. Differentiation

2. Relevance

3. Esteem

4. Knowledge

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According to this model brands are built sequentially according to the four factors as shown in

the graphic illustration.

Figure 43

Differentiation comes first, as no brand with

Model of Brand Dynamics

ambitions can become strong unless it has a

point of real differentiation. It is the bottom line

Differentiation

characteristic of any brand that seeks to acquire

price premium or a decent price with good

margins.

Relevance is next on the model. It means that a

brand must have clear meaning for its users.

Unless it is relevant for the target market, it will

Relevance

not buy it, despite being much differentiated.

Very expensive professional cameras and

chronograph wrist watches are much

differentiated, but they have an appeal for a

niche market and not a large target market.

Therefore, they are no good for a common

Esteem

customer.

If a brand has differentiation and is highly

relevant for a big market, it becomes a big seller

and, hence very strong.

Brand strength, then, is a function of

differentiation and relevance.

Knowledge

We can say that

Source: Building Strong Brands by David A. Aaker

Brand strength = Differentiation multiplied

by relevance

We must try for our brands to become strong on both characteristics, which offer one

"construct" of brand strength. The other "construct" comprises of the other two dimensions that

are esteem and knowledge. Esteem multiplied by knowledge is the brand stature construct. See

the graphics on the following page.

Esteem refers to perceived quality and a rise or decline in popularity. Customers loyal to their

brands hold them in high esteem owing to the quality perceptions. Esteem then has a direct

relationship with loyalty.

Knowledge illustrates that customers are not only aware of the brand and its product, but also

understand the reason for this product's existence. They are aware of the positioning of it and

have a true understanding of the brand. That is the height of the brand building process.

The four dimensions have further variants. You study their variants within the two major

constructs and choose which ones are most relevant for measuring performance of your brand.

In other words, the performance and subtle changes that are caused over time stem from these

dimensions. Starting with awareness, recognition, and recall, these dimensions end with referral

index.

As a reminder, these measures are carried out along side routine financial results to complete a

balanced brand-building process. One important beginning about these measures is that they

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require researching across a representative sample of your customers. Maintaining a contact

with them leverages your knowledge of the brand in a much more structured way. You can also

improve upon the brand-based customer model that is a composite of brand picture, brand

contract, and positioning.

Let us now take a look at the variants of the dimensions that become important strategic

measures of brand's performance as shown by the graphics on the page after next.

On the differentiation dimension:

Awareness and recognition: Customer's ability to recall and recognize the brand as a distinct

identity is a reflection of brand's strength. The more differentiated it is, the easier the recall and

recognition. Awareness and recognition play a dominant role in building brand equity. Being in

the minds of consumers, it also plays a role in developing outreach for the brand. It is similar to

the measure that ad agencies undertake in establishing the aided and unaided recalls to gauge

the success of their campaigns. Used as a measure of brand performance, recall and recognition

should however go beyond just measuring the level of recall. It must provide relevant data that

you can relate with other variables and gauge strategic implications.

Figure 44

Strength

Stature

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Brand Management (MKT624)

Figure 45

Awareness, recognition, and recall

Differentiation

Persona recognition

Contract fulfillment

Market share

Purchase frequency

Relevance

Customer satisfaction

Quality perception

Lost and found customers

Customer loyalty

Esteem

Price premium

Lifetime value of a customer

Positioning understanding

Knowledge

Referral index

While carrying out research, importance should also be given to symbols and imagery. In many

cases, symbols and images cannot be separated from the brand name when it comes to evoking

a recall. Question about what comes to your mind in terms of symbols and images while we

mention this name is important.

Getting people to recall and recognize your brand goes a long way in building brand equity.

The data generated on recall and recognition therefore should be used very strategically in

making decisions about different variables of the marketing mix.

Persona recognition: It measures the extent to which your brand is consistent with its persona.

Are distinct and differentiated features recognized by your customers? Basically, it is a measure

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Brand Management (MKT624)

that tells you whether the brand persona developed by you is being received at the customer

end the way it was intended!

This measure should also be drawn on a representative sample of your customers to find out

how they associate themselves with your brand. It should be judged by the degree to which

customers perceive receiving the benefits and developing emotional associations with your

brand.

You, therefore, have to devise a questionnaire that is intended to evoke the correct and

objective responses. The next step is obviously for you to compare the results with your

original persona. Any variations that you detect have to be taken care of in relation to their

nature and severity.

If you intended to create a persona of a dependable, friendly, and, informal brand and the

results are contrary to that persona, you must make adjustments where ever those are warranted

in quality, packaging, just the visual part, symbols, or maybe your communication.

The chances are that major changes will not be desired, for your persona should not be that

much off the mark to dictate major changes. That will, most probably, bring your focus on to

the imagery, where some adjustments will fix the problem

Contract fulfillment: It measures the extent to which the brand upholds the contract. Are all

promises being delivered? This measure gives a straightforward report on how much your

brand is keeping all the promises it has made with its customers.

Are customers satisfied about whatever they think should be delivered is being delivered? If the

answer is yes, then you are keeping the contract. Any breaches dictate that you must repair the

contract and win over customers' confidence.

You will recall this contract is only emotional and economic in nature. Unavailability or erratic

availability of a successful brand of yours reflects flaws either in distribution system or

company's logistics.

Customers expect regular availability to reap the benefits your brand offers. This is a breach of

the contract and has to be repaired. Not being able to supply or deliver the product through a

direct marketing system is another breach of contract. Compromising quality is yet another.

Conversely, fulfillment of the contract builds trust in your brand. Trust creates loyalty, which in

itself starts off a process of gaining new customers on a continuous basis.

On the relevance dimension

Market share: This measure lets you have a clear picture of the number of customers or usage

of your brand in comparison with competition.

Purchase frequency: This measure lets you have the number of times your customers buy your

brand. Your objective becomes, "how can I have these customers buy more every time they

buy?

Customer satisfaction: This provides a rating on the degree of satisfaction with your brand. It

also shows you how much willing customers are to stick to your brand.

Brand-driven penetration: You use this measure on line and brand extensions. It basically tells

you how many of your existing customers have chosen to buy products and services that are an

extension of your existing brand. It confirms or does not confirm the extendibility of your

brand by giving you a proof of to what extent your customers are willing to go with you on

your extensions. In other words, it is a measure of how rational you are in devising your

product strategies.

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Brand Management (MKT624)

Quality perception: It is a measure of satisfaction with your brand; it shows quality

comparisons with competitors on scales such as

· High quality vs. shoddy quality

· Best in the category

· Consistent quality

Brand-driven customer acquisition: This measure reflects the number of customers that you

have gained in comparison with some preceding period. This could be one year. The difference

between two numbers (if positive) is additional, new customers.

To determine the additional customers is not as difficult as it may sound. If you are selling

consumer durables like TVs, it is pretty much straightforward. The findings can be very

interesting from the standpoint of branding strategies that you have employed.

If you are selling consumables in big quantities, it may be a little more challenging but not

outright impossible. Being the brand and sales managers, you people can draw certain bases of

consumption in relation to population served. You can then ascribe increased consumption to

additional customers based on those bases. The basis of consumption can be per person, per

family of a predetermined number of members to it.

The measure does not end at determining new, additional customers. The challenging part of

the measure is to determine, through the questions to respondents, what drives them to make

buying decisions they make and what is it that is making them leave your brand and for what

reasons? Such findings are the most fascinating part of this measure.

Bibliography:

1. David Aaker: "Building Strong Brands", The Free Press ( )

Suggested readings:

1. Scot M. Davis: "Brand Asset Management Driving Profitable Growth through Your

Brand"; Jossey-Bass, a Wiley Imprint (215-220)

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