Brand Evaluation Deep Dive: From Fundamental Concepts to Practical Applications
A brand is something that expresses impressions, emotions, values, and more in the minds of consumers. Brands are highly valuable assets for companies, and building a strong brand presence is a significant marketing challenge. However, one characteristic that brand strength has is it is difficult to be assessed in terms of its impressions and strength. As a result, during the branding process, discrepancies can arise between the company’s perception and that of the users, leading to cases where the desired brand effects cannot be achieved.
To avoid such discrepancies, “brand evaluation” is the process of examining how a brand is perceived by users. Brand evaluation is a method of measuring the value of a brand by using appropriate indicators to assess the impact of the brand on users.
This article explains the fundamental concepts of brand evaluation and introduces specific practical applications.
The Concept of Brand Evaluation
A brand represents the perceptions and emotions that users have about a company, product, service, etc., and it becomes a crucial choice and decision criterion in their purchasing behavior.
In this context, we will explain the meaning and importance of brand evaluation.
What is Brand Evaluation?
Brand evaluation is the measurement of a brand’s value using appropriate indicators while assessing the impact of the brand on users. Brand evaluation can be broadly categorized into two aspects: economic value (such as brand economic value) and consumer value (such as brand strength and brand equity).
Brand evaluation not only helps in understanding the asset value of a brand but also reveals its strengths, weaknesses, differentiation from competitors, and market position. This enables companies to accurately grasp the value of their own brand and use it to inform business strategies and marketing initiatives.
The Importance of Brand Evaluation
Brand evaluation is conducted to measure the value of a brand, and this value is assessed from two aspects: economic value and consumer value.
Economic value involves calculating the value of a brand when translated into monetary terms. Understanding the economic value of a brand clarifies its importance in corporate finances. It also serves as a basis for determining brand usage fees and valuation in transactions.
Consumer value measures how a brand influences and is perceived by consumers. Consumer value is sometimes referred to as brand equity or brand strength and is utilized as vital information in marketing strategies.
For example, by analyzing what emotions a brand evokes in users and how it fulfills their needs and desires, you can uncover the direction for branding efforts and differentiation points from competitors.
Methods of Brand Evaluation
There are various methods for evaluating brand value depending on the specific purpose. By utilizing perspectives and indicators aligned with the purpose, it becomes possible to gain deeper insights and conduct specific analyses.
Here, we will explain how to choose the appropriate methods for brand evaluation.
Choosing Metrics for Brand Evaluation
Brand evaluation involves two aspects: economic value and consumer value. Economic value is determined by calculating how much the brand is worth in monetary terms, while consumer value measures how the brand is perceived and its impact on consumers.
In the context of marketing strategy development, consumer value is of great importance. Consumer value can help uncover the strengths and weaknesses of a brand, as well as differentiation points from competitors, but it doesn’t have absolute metrics like economic value.
When evaluating a brand’s consumer value, it’s essential to select the most suitable metrics based on your company’s marketing challenges. If you want to know the brand’s awareness, brand recognition is a relevant metric, whereas if you want to understand the perception of the brand, brand image is a key indicator.
Additionally, there are other metrics you can use, such as brand purpose, which represents the brand’s social responsibility and purpose, or brand affinity, which measures the closeness between consumers and the brand. The choice of metrics should align with the specific aspects of the brand’s consumer value you aim to assess.
Conducting Brand Evaluation from a Consumer Perspective
When conducting brand evaluation, it is crucial to assess it from the perspective of consumers. Often, executives and employees within a company have various emotional attachments to their own brand. As a result, they may tend to have a different image of the brand compared to consumers.
To illustrate this situation, it’s similar to the feelings parents have for their children. Parents have various emotions like love, expectations, and worries for their children, which can lead to bias in their evaluation.
However, when children grow up and enter the workforce, society evaluates them based on different criteria than their parents. A similar situation can occur in brand evaluation.
The value of a brand in the market is determined by consumers, not the company itself. Consumers assess the brand using criteria that may differ from those of the company. To gain insights and guidance for marketing strategies, it’s essential to understand consumer evaluations accurately.
To do so, conducting marketing research is vital to grasp the consumer value of the brand thoroughly. Knowing the brand’s consumer value from a consumer-centric perspective leads to valuable information analysis.
Quantitative and Qualitative Brand Evaluation Methods
Brand evaluation methods can be categorized into two approaches: quantitative and qualitative. Quantitative methods involve numerical assessments, while qualitative methods encompass evaluations that cannot be expressed in numbers, such as characteristics like “trendy” or “sophisticated.”
Quantitative brand evaluation involves quantifying aspects of consumer awareness and emotions to reveal the strengths, weaknesses, and points of differentiation of a brand. Specific research methods for quantitative evaluation include brand awareness, brand preference, and numerical image assessments.
Brand awareness measures whether consumers can recall a brand’s name or logo when they see or hear it. Brand preference quantifies how much consumers favor a particular brand when choosing from multiple options.
Even for aspects of brand image that are typically challenging to capture numerically, there are evaluation methods that use numerical scoring to make them quantifiable. Using this approach, you can understand a brand’s positioning and differentiation factors in numerical terms.
Qualitative brand evaluation expresses consumer perceptions and emotions through words or concepts, allowing for a sensory understanding of a brand’s appeal, characteristics, and issues. Qualitative methods for brand evaluation include brand associations and image assessments through verbal descriptions.
Brand associations involve investigating the words or images that consumers associate with a brand, helping to understand the impressions and emotions consumers have towards the brand.
Image assessments through verbal descriptions involve consumers describing their perceptions of a brand in their own words. Conducted in interview format or similar methods, this approach allows for a deeper exploration of the consumer’s image of the brand and can help uncover their needs and desires.
Brands are inherently abstract entities, so assessing them from only one perspective may lead to a misjudgment of their true value. That’s why evaluating a brand from both quantitative and qualitative aspects allows for a more accurate understanding of its overall evaluation.
Types of Brand Valuation Models
A brand valuation model is a framework used to evaluate the financial value of a brand. There are various types of brand valuation models, but here we will introduce two representative ones.
Cost-Based Brand Valuation
Cost-based brand valuation is a method that evaluates a brand’s value by summing up the costs incurred in establishing the brand. The costs in this context include expenses and investments related to brand development and maintenance, such as the cost of creating a brand name or logo, advertising and promotional expenses, research and development costs, and so on.
One advantage of cost-based brand valuation models is that they are relatively simple and provide an objective way to calculate the brand’s value. However, it’s important to note that costs represent expenditures incurred in the past. Therefore, a significant drawback of cost-based valuation is that it may not reflect the current market value of the brand.
Market-Based Brand Valuation
A market-based brand valuation model is a method used to evaluate the value of a brand by comparing it to similar brands available in the market. Market-based brand valuation takes into account factors such as revenue, profit margins, market share, and the brand’s profitability and growth potential.
As a result, it allows for an understanding of the brand’s current value and the ability to assess its competitiveness in the market and compare it with other competing brands. However, it’s important to consider factors such as susceptibility to market conditions, consumer trends, and the challenges of comparing with similar brands.
Practical Implementation of Brand Evaluation
How should brand evaluation be carried out in practice?
In this context, we will explain the process of brand evaluation using the example of the NPS (Net Promoter Score) metric, which is commonly used to assess brand loyalty.
Application Examples of Brand Evaluation
As an application example of brand evaluation, let’s introduce the NPS (Net Promoter Score) metric. NPS is an abbreviation for “Net Promoter Score” and is a metric used to measure user’s “likelihood to recommend” a brand.
In NPS, a question is asked: “How likely are you to recommend (brand or service name) to a friend or colleague?” Respondents are provided with a scale ranging from 0 (not likely at all) to 10 (extremely likely) and are asked to select the corresponding level. Based on their responses, the population is categorized into three groups: Promoters (those who answered 10 or 9), Passives (those who answered 8 or 7), and Detractors (those who answered 6 to 0). The NPS is then calculated by subtracting the percentage of Detractors from the percentage of Promoters.
The higher the NPS score, the more likely customers are to recommend the brand or service to others. Conversely, a lower NPS score indicates a higher likelihood that customers may distance themselves from the brand or service.
Interpreting Brand Evaluation Results
NPS (Net Promoter Score) alone provides insight into users’ “likelihood to recommend” a brand. However, by combining this metric with other information and conducting analysis, you can gain a more detailed understanding of the brand’s strengths and weaknesses.
For example, analyzing the correlation between the NPS score and customer satisfaction can reveal insights into customer psychology, such as the following:
- Factors with a high correlation to NPS and high satisfaction represent “Brand Strengths.” These elements are crucial to the brand and are highly valued by users.
- Factors with a high correlation to NPS but low satisfaction represent “Brand Weaknesses.” These elements indicate areas where users are dissatisfied with the brand and may lead to customer attrition.
- Factors with a low correlation to NPS but high satisfaction should be considered “Maintenance Items.” These elements are essential aspects that users expect from the brand.
- Factors with a low correlation to NPS and low satisfaction should be monitored closely as “Areas of Concern.” These elements are not highly anticipated by users, and the brand may not be meeting their expectations in these areas.
Based on such correlation analysis, conducting qualitative research like interviews can provide more accurate insights into user brand evaluations. By understanding both quantitative and qualitative assessments of the brand, you can develop more specific marketing strategies.
Strategies to Improve Brand Evaluation
Once brand evaluation analysis is conducted, the next step is to implement strategies to improve and enhance brand evaluation. Here, we will explain strategies to enhance brand loyalty based on brand evaluation.
Methods to Improve Brand Loyalty
To enhance brand loyalty based on brand evaluation, you may consider the following methods:
- Increasing Brand Attachment and Affinity
- Strengthening Fan Solidarity
- Enhancing Brand Strength
- Increasing Perceived Value
Communicate the brand’s story and values to consumers through videos, articles, and other content.
Effective communication between brand operators and consumers through social media and other channels can also foster a sense of connection.
Create communities where fans can share information and opinions related to the brand and interact with each other. Utilize platforms such as social media, online forums, and consider hosting offline events or workshops.
Analyze consumer needs through marketing research and feedback collection, then offer products or services that reinforce those aspects. It’s crucial to incorporate the results of brand evaluation into product/service improvements and development.
Provide rewards and benefits such as loyalty points programs to consumers. However, be cautious with discount sales like coupon offers, as they may potentially devalue the brand. Instead, consider exclusive membership services or limited-edition products to enhance consumers’ sense of exclusivity and superiority.
Building a Positive Feedback Cycle
By enhancing brand evaluation, you can establish a positive feedback cycle that boosts brand strength while ensuring steady profits.
Here, we will introduce four steps to create this positive feedback cycle.
- STEP 1: Defining the Target
- STEP 2: Cultivating Core Fans
- STEP 3: Stabilizing Sales and Profits
- STEP 4: Cost Reduction and Investment Expansion
First, clarify which target audience your brand will appeal to.
Consumers typically only purchase their number one brand. Analyze your brand evaluation to determine in which target audience your brand can be recognized as the number one brand.
Furthermore, in cases where there are competing brands, it is essential to analyze the strengths and weaknesses of your brand and develop a strategy on how to highlight the differences at various points.
Once the target users are identified, the next step is to convey the strengths of your brand to them. The key point here is to ensure that the target users can achieve a high level of psychological satisfaction by engaging with your brand.
Physical satisfaction factors such as price and specifications can easily be replaced by competing products, especially when new alternatives emerge. If you focus solely on physical satisfaction, it may be challenging to establish a positive brand cycle.
On the other hand, psychological satisfaction is more abstract and, as a result, users are less likely to switch to other options even when competing products become available. For instance, in the cola beverage market, no matter how delicious a competitor’s product may be, it is challenging to change the brand image that Coca-Cola has established.
To enhance users’ psychological satisfaction, it is crucial not only to offer attractive products but also to improve communication with users. By providing platforms for social media interactions and communities, you can elevate users’ psychological satisfaction.
The increase in psychological satisfaction will transform your brand from being the number one choice to the only choice for users.
Once your brand becomes the only choice for users, even if powerful competing products are introduced, users will not easily switch to other brands. This is because, despite the superior specifications or prices of competing products, users cannot obtain the same level of psychological satisfaction.
As a result, your brand will face less direct competition from similar products, and you can expect stable sales at higher prices due to users’ loyalty.
Products with strong brand power are purchased by loyal customers, leading to a significant reduction in costs related to acquiring new customers and retaining existing ones. As a result, the brand’s profitability expands significantly, thanks to the synergy of high-profit margin sales and reduced customer acquisition costs.
The brand can leverage this profitability to reinvest in itself, creating a substantial gap between itself and the competition. As brand power continues to grow through reinvestment, more and more exclusive customers are cultivated, leading to a further expansion of the brand in a virtuous cycle.
Important Concepts Related to Brand Evaluation
To enhance the value of a brand, it is crucial to formulate a strategy based on the results of brand evaluation. In order to devise such a strategy, it is essential to have an understanding of concepts related to the brand. In this context, we will introduce two important concepts related to brand evaluation: “Brand Loyalty” and “Brand Strategy.”
What is Brand Loyalty?
Brand loyalty refers to the loyalty and preference that consumers have for a specific brand. When brand loyalty is high, consumers tend to take actions such as repeatedly purchasing products or services from that brand and recommending it to others.
Users with high brand loyalty exhibit the following behaviors:
- Consistently purchasing products or services from the same brand.
- Influencing other consumers through word of mouth or recommendations.
- Being less likely to switch to products or services from competing companies.
Increasing brand loyalty leads to the long-term stability of a brand’s sales and profits.
What is Brand Strategy?
Brand strategy is a strategic plan that defines a company’s brand purpose, direction, positioning, and how it aims to penetrate the consumer market. It serves as the fundamental guideline for enhancing the brand’s value and plays a critical role in determining the brand’s significance and purpose.
It’s important not to confuse brand strategy with branding. Brand strategy is the overarching concept that guides the specific activities related to establishing a brand in the market, which falls under the umbrella of branding.
Summary and Next Steps
In this discussion, we have covered the foundational concepts of brand evaluation and explored specific application methods.
Brand evaluation is crucial for understanding how consumers perceive a brand. With this information, you can assess the current state of your brand and determine the direction for future brand penetration strategies.
After conducting an accurate brand evaluation, the next step is to move forward with strategies to enhance brand visibility. By doing so, you can transform your brand into the consumer’s “one and only” choice.
Author
Asmarq Editorial Office
Marketing Communications Group , Sales Department, Asmarq Corporation
They oversee all of Asmarq’s website content and are also involved in the development of new research solutions and branding. They also contribute to planning marketing research seminars and writing research-related content.
Supervision: Asmarq Marketing Communications Group
