Measuring and Managing Brand Value: A Case Study of Apple Inc.

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Brand Management
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Table of Contents
INTRODUCTION.........................................................................................................3
TASK 1 – BUILDING AND MANAGING BRAND OVER TIME....................................4
TASK 2 – BRAND PORTFOLIO AND HIERARCHY MANAGEMENT........................9
TASK 3 – BRAND EXTENSION AND LEVERAGES................................................13
TASK 4 – MEASURING AND MANAGING BRAND VALUE.....................................17
CONCLUSION.......................................................................................................... 21
REFERENCES..........................................................................................................22
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INTRODUCTION
Brand and Brand equity building and management are integral aspects of doing
business in today’s fiercely competitive business environment. The investment
incurred in these exercises returns manifolds in the long run. The assignment
addresses different aspects of the brand and brand equity building and management
practices (Severi and Ling, 2013). The first task is a report that involves a discussion
on brand equity strengthening, and brand-reinforcing and revitalising and other
aspects like brand extension and the importance of branding.
The second task concerns the brand portfolio and hierarchy management. Apple Inc.
is taken as a reference point in both these tasks (Keller, 2014). The third task covers
brand extension and brand leveraging. It involves considering the strengths and
weaknesses of brands that relate to brand leveraging. The fourth task is about
measuring and managing brand value and covers techniques of managing and
measuring brand value, brand awareness, market share, consumer attitudes, and
purchasing intent.
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TASK 1 – BUILDING AND MANAGING BRAND OVER TIME
The Importance of Brand and How It’s Created and Managed over Time
What are companies like Coke, Nike, Google and McDonalds have in common? The
answer is their Brands that are so strong that seeing their logo or hearing these
names allows anyone to identify their products and its quality along with the overall
message. So, a Brand can be referred to as a feature such as a term, name, symbol,
or design that are associated with a product, services, or goods and marks it as
different from similar offerings from other companies (Maurya and Mishra, 2012). As
a Brand starts growing by being recognisable, it starts acquiring value and this value
in the Brand or the commercial value of a Brand is known as its Brand Equity. Brand
Equity can be defined as a Brands financial and marketing value that’s associated
with the market strength of a Brand. The Brand strength includes Brand assets,
Brand loyalty, Brand awareness, Brand associations, and Brand quality perception
(Severi and Ling, 2013).
The marketing department plays a vital role in the creation of Brand equity. The
responsibilities of the marketing department include defining and managing Brands,
campaign management, producing promotional and marketing material, content
creation, social media management, and managing market and customer research.
These responsibilities of the marketing department are associated with Brand and
Brand equity building (Fill and Turnbull, 2016). The marketing department develops
marketing programs that are associated with the price, product, and distribution
channels and are instrumental for creating the Brand image and building Brand
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awareness. The Brand building process is a continuous and on-going process and
it’s an important aspect of the business strategy of an organisation. An effective and
successful Brand building process helps in establishing a Brand and its ability to
outshine its competition (Aaker and Biel, 2013). This results in the creation of a loyal
customer base and it, in turn, helps in the achievement of sales and profit objectives.
The process of Brand building can be divided into the following stages
 Brand Description – The definition of a Brand is necessary for its Brand
equity and customer perception. The Brand description can be done through
logos, product descriptions etc.
 Differentiation and Positioning – This involves the identification of a
unique value of the product or service that differentiates it from its
competition and correctly positioning the Brand (Aaker and Biel, 2013).
 Brand Promotion – This involves advertising and promoting through
mediums like social media, TV, online advertising etc. It helps in the
creation of Brand awareness and effective execution of Brand promotion
helps in increasing the Brand recall (Keller et al., 2011).
 Brand Personalisation – It involves giving a personal touch to the Brand
through customisation and innovation so that a customer feels connected.
 Brand Evaluation – It involves continuous review and monitoring of the
Brand, product, and service performance (Aaker and Biel, 2013).
Keller's Customer-Based Brand Equity (CBBE) model provides an effective method
of building and strengthening Brand equity of an organisation (Keller, 2016). This
model allows interpreting Brand equity in the context of a customer. Keller's
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Customer-Based Brand Equity (CBBE) model can be used to analyse the Brand
equity strategy of Apple Inc. Keller's model indicates the following factors that are
vital for Brand equity
Brand Identity or Brand Salience: Who are you?
This refers to the identity or impression of the Brand in a customer’s mind (Keller,
2016). It becomes critical when a customer is in buying mood since this factor helps
the customer in making the buying decision. This factor is higher for global Brand
with longer market presence. The Brand identity of Apple Inc. is very high due to its
reputation for building quality products and enjoys strong customer loyalty.
Brand Meaning: What are you?
This refers to Brand performance and Brand imagery. Brand performance results
from the desirability of the Brand among customers. Brand imagery is the customer
perception of a Brand (Keller, 2016). Apple exhibits a great Brand performance. The
Brand adds value to the company both in terms of revenue and acclamation. The
Brand Apple enjoys a very high customer perception as a quality product with a high
price tag.
Brand Response: What about you?
This refers to the customer’s reaction to a Brand. This factor affects all the marketing
and branding decisions of the companies (Keller, 2016). The customer reaction in
case of Apple is quite strong. The Apple products are considered to be the high end
that provides great quality and outstanding features.
Brand Resonance: What about you and me?
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This refers to the bonding between a customer and a Brand (Keller, 2016). Apple
enjoys a very high customer resonance. It's a global favourite of its customers due to
outstanding technology, appearance, and quality of its products. Every product
launched by Apple is usually an instant success owing to the high Brand resonance
of the Apple Brand.
The above four factors contribute to Brand equity building and its long-term
management (Keller, 2016). The high Brand equity and its successful maintenance
and improvement lead to the success of Apple. The above model stresses the
important role played by a customer in Branding and building Brand equity exercises.
Brand management
This requires a long-term view of the marketing decisions and involves reinforcing
and revitalising the Brands. The Brand reinforcing refers to the on-going innovations
in manufacturing, design and merchandising of the product (Rosenbaum-Elliott et al.,
2015). It ensures the relevance of products in user imagery. Great examples of this
are the iPhone smartphone series of Apple. New iPhone models with upgraded
technology and design are introduced in the market at regular intervals to keep the
Apple Brand ahead of its competition and maintain customer regard and loyalty.
Revitalising the Brand refers to recovering the Brand equity by recapturing the lost
sources or identifying and establishing new ones (Rosenbaum-Elliott et al., 2015).
This can be achieved through the further expansion of Brand awareness through the
improvement in Brand recall and through improving the components of Brand
associations that create the Brand image such as uniqueness, favourability, and
strength. Apple consistently works towards making its Brand image unique and
improving the Brand recalled. For example, the latest iPhones lack certain features
like the headphone jack and one needs to add an Apple accessory to enjoy
headphones making the product unique and slimmer.
Another aspect of Brand management is Brand Extension and it refers to introducing
sub Brands to attract new customers and update the Brand (Rosenbaum-Elliott et
al., 2015). Apple Inc. used Brand extensions as a tool to drive its core growth. The
Apple product line like iPhone, IPad, and iPod enjoy their separate customer bases
and familiarise the users with the in-house Apple operating system. This led to
growth in the Mac PC range of the company due to customer's familiarity with the
company operating system. Apple Inc. is a great example of Brand and Brand Equity
building as well as efficient Brand management.
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Branding plays a vital role in the marketing plans of a company (Fill and Turnbull,
2016). The Branding activities require money but the returns are tremendous.
Branding helps in creating customer preference for the products and services
indicated by the Brand. This helps in gaining an edge over the competition. Also,
successful Branding helps in enhancing the revenues and overall market share of
the company. It also helps in preventing new competitors from gaining market share
while safeguarding the company during a crisis. Another aspect of a well-known
Brand is the willingness of people to work for the parent company. All this along with
the potential for garnering higher price makes branding a necessary marketing tool
for every company (Fill and Turnbull, 2016).
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TASK 2 – BRAND PORTFOLIO AND HIERARCHY MANAGEMENT
Brand Portfolio Management of Apple Inc.
The branding strategy of Apple Inc. is based on emotions. The concept starts with
how an Apple product experience makes its customer feel. The Brand personality of
Apple is about imagination, lifestyle, passion, regaining liberty, dreams, innovation,
aspirations, hopes, dreams, and providing power to people through the use of
technology. It focuses entirely on simplicity and removing complexity from the life of
Companies customers (Kapferer, 2012). The Company’s brand personality is
invested in having a connection with its customers.
The company has a wide product range that includes iPhone, iPad, iTunes, iPod,
iMac, iBook, iLife, iCloud, and iWork. Apple uses the prefix “i” for its consumer
products range but not all of its consumer products carry this prefix such as Safari,
QuickTime etc. Apple also offers Apple Pay and Apple Watch along with Apple TV.
This product portfolio has made Apple the most successful technology company in
terms of finance. The brand portfolio can be defined as an umbrella that
encompasses all the brands and sub-brands of an organisation that cater to the
requirements of different market segments (Kapferer, 2012).
The Brand Portfolio Model used by Apple is the Branded House. This model is
employed when a single Master Brand is used across a number of different products
and categories (Uggla and Lashgari, 2012). The company carries a single primary
brand and it's Apple in case of Apple Inc. The benefit of this model is the focus that's
created over the brand. The disadvantages include loss of differentiating power and
constraint on growth and innovation. Due to this approach, the Apple brand exhibits
ma Halo effect (Kapferer, 2012). For example, the customers' experience of iPhones
along with being a quality product made Apple iPad a success. This, in turn, helped
in drawing customers to Apple's Mac range.
Hierarchy Management of Brands
The Brand Hierarchy or Brand Architecture can be referred to as a way to portray
brand strategy of an organisation by displaying the nature and number of both
distinctive and common brand elements over the products offered by the
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organisation by revealing their ordering explicitly (Keller, 2014). There's a need for
the Brand Hierarchy in every organisation since it prevents things such as customer
confusion, the sub-brands from shadowing the primary one and undermining
business planning.
The brand architecture framework employed by Apple is the Endorsed brand
architecture. This framework uses a master brand but allows for the independent
existence of sub-brands. This allows the sub-brands to display individual market
identity and presence while benefitting from association with each other and
endorsement of the master brand (Keller, 2014).
Brand Equity Management
There is a number of ways to measure brand equity but accurately measuring it is
very difficult. There are both quantitative and qualitative components of brand equity
that makes measuring brand equity difficult. Efficient brand equity management is
based on understanding the customer’s perception of the brand. Also, there’s a need
for current state assessment of the brand positioning and it establishes the brand
equity placement as compared to organisations goal of brand positioning. This helps
in formulating the brand equity management and development strategy (Buil et al.,
2013). Proactive brand building causes continuous brand evolution in the eyes of
customers. Other influencing factors include competitor activity, brand competition
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levels, market and category fragmentation, change in customer preferences, etc. On
the basis of these, there are following two categories of brand equity management
Reactive Management
These include communication and marketing campaigns that are designed to handle
competitor’s interference in the core territory of brand positioning, changes in brand
focus, declining revenue and sales, declining brand relevance, and absence of long
or medium term proactive management of brand equity (Buil et al., 2013).
Proactive management
• It involves the following
• Designing communication and marketing campaigns that focus on brand
equity strengthening.
• Refreshing positioning to accommodate brand extensions, new launches
etc.
• Refreshing focus and identity to accommodate acquisitions and mergers.
• Creating positioning platforms to influence brand equity in context to the
brand strategy.
• Exploring and understanding the trends that can influence brand
positioning and brand equity (Buil et al., 2013).
Brand equity management requires a long term and broad perspective of brands.
The broad perspective of brand equity is important especially in cases or multiple
brands, products, and markets. These cases require the creation of brand
hierarchies on the basis of distinct and common brand elements of different
products. New brand extension and product strategies in context with optimum
product and brand portfolios need to be created (Buil et al., 2013). Brand equity
management includes the following steps
• Defining the brand hierarchy that has a number of different levels and
brands are afforded prominence on the basis of their respective levels.
• The brands need to be strongly differentiated even if they are on the same
levels.
• Creating relevant global associations to lower level brands.
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• The brand extensions being introduced need to complement the
organisational product mix and should have the ability to leverage the
associations of parent brands and enhance brand equity of the parent
brand.
• Establishing clear brand roles through deletion, modification, and addition
of brands in the brand portfolio as per the need.
There’s a need to strengthen and maintain brand equity to survive and progress in
the current fiercely competitive business environment. This is true for both
established and brands and the new entrants. The brand equity is ever changing and
the brand equity management strategies need to evolve to handle these changes.
The brand equity management approach should be continuous and proactive (Buil et
al., 2013).
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