Producing a Measure of Brand Equity by Decomposing Brand-Benefit Beliefs into Brand and Attribute Sources

Abstract:     
In 2003, P&G rolled out a new proprietary brand tracking system based on Keller's (2003) consumer-based brand equity framework. This system produces a brand equity score for all brands in the categories in which P&G competes. In this short period of time, P&G has fully embraced this new system, with managers and executives using this brand equity measure as an indicator of brand health, as well as for reward and compensation. Since its inception, P&G has already studied hundreds of brands, including all of its billion dollar brands, in more than 30 countries, and has its brands slated for continuous tracking. The survey consists of hundreds of questions that are primarily collected in check-box format, which give a general idea of how favorable consumers' beliefs are about brands. What these questions do not provide is any insight concerning how consumers arrive at those beliefs, important information that brand managers were lacking. This article incorporates two previously-published JMR articles to help P&G utilize its existing check-box survey data (Edwards and Allenby 2003) to identify which sources consumers use to develop their beliefs about brands, i.e., high-level brand or detailed attribute sources (Dillon, et al. 2001), and the implications for brand management. The authors then develop a measure of brand equity based on consumers' use of the high-level brand source and show that a significantly smaller number of questions can produce a measure of brand equity that correlates highly with that produced by P&G's current system. The major benefits to P&G are an understanding of where consumers' brand beliefs come from, and a reliable measure of brand equity at much less cost and with fewer questions. The benefit to marketing management is the implication that by using the approach described in this paper, other companies also can better understand where their consumers' brand beliefs come from, and now can develop a measure of brand equity that does not require a large complex instrument.

Keywords: branding, brand equity

JEL Classifications: M31

Working Paper Series