1

Brand Tracker
Phase II Brand Equity
Measurement
A report submitted to
Prof. Govindrajan
In partial fulfillment of the requirement of the course
Product and Brand Management
th

On 4 September 2011

By
Rakesh Gakare (B10021)
Sharath Ghosh (B10024)
Shishir Ramkumar (B10025)
Siddharth Goutam (B10030)

Executive Summary
Brand Equity as a concept tries to answer a fundamental question-whether brands truly are assets that
enable the business to generate superior returns over time? As such it a strategic tool but is almost
impossible to quantify. There are many models which try to measure Brand Equity taking into
consideration a varied range of parameters like differentiation, relevance, satisfaction etc. but no model
has been able to measure brand equity in its entirety yet.
In this phase of the brand tracker project we have undertaken a study to effectively measure the equity
of the brand HP. The study has been conducted with the help of two models: (i) Brand Equity Eleven (a
variance of Aakers Brand Equity Ten model) and (ii) Multi attribute regression model. The study was
conducted on a sample size of 50, the instrument of data collection was an online questionnaire and
appropriate statistical tools were used wherever appropriate.
Brand Equity Eleven model tries to measure brand equity by taking into consideration 11 attributes that
in our opinion build up to brand equity. A comparative study was done with 3 other competitors of
HP(Dell, IBM and Apple) across these 11 attributes on a rating scale and a Brand Equity Index was
created at the end to see how each brand varies from the base for each parameter. HP was positioned
3rd amongst the competition which lead to the conclusion that it has a low brand equity. HP needs to
work on its after sales service also it should try to improve the quality of its product through innovation
to make it reliable as well as value for money product and also try to differentiate itself from its
competitors.
The multi attribute regression model was developed by the group with consumer buying behavior while
purchasing technological products as its base. This model analyzed the various factors that consumers
take into consideration while buying a technological product & their relative importance and what is the
position of these factors in the consumers mind when it comes to the brand HP. Then these attributes
were clubbed under the pillars Brand Loyalty, Price Premia and Leveragability. Regression analysis was
done to establish the relationship of the factors with the pillars then a further regression was done to
find the brand equity on the basis of the aforementioned pillars. Statistical looks like Anova, Multiple
regression models etc. were used to measure brand equity. From this model we found that HP is a
leverageable brand but it has problems with quality and after sales service. It has improve its position in
the field of after sales service by coming out with concepts like on site servicing, replaceable parts
warranty etc also it should try to improve its quality by coming out with reliable and value for money so
as to improve brand loyalty and its ability to charge a premium. HP can try and get into the automobile,
FMCG, accessories and health care sector. It was also found that Brand Equity of HP is very sensitive to
customer service, value for money, price and quality attributes, any change in these attributes will lead
to a huge change in brand equity of HP.

Table of Contents

Executive Summary...... 3
Defining Brand Equity.... 5-9
Measuring Brand Equity Aakers Brand Equity Eleven .. 10-12
Measuring Brand Equity Multi Attribute Regression Model .. 13-18
Recommendation 19-22
Annexure.. 23-31
Reference.. 32

How Brand Equity Generates Value?

Reduced Marketing Costs

Trade Leverage
Attracting New Customers

Brand Loyalty

Provides Value to
Customer by Enhancing
Customers:

Create Awareness
Reassurance
Time to Respond to Competitive
Threts

Interpretation/
Processing of
Information
Confidence in
the Purchase
Decision
Use Satisfaction

Anchor to which other Associations

could be Attached

Brand Awareness

Liking
Signal of Commitment

Brand Equity

Brand to be Considered

Provides Value to Firm

by Enhancing:

Reason-To-Buy
Differenciate/Position

Perceived Quality

Price
Channel Member Interest
Extentions

Help Process/Retrive Information

Brand Associations

Reason-to-Buy
Create positive attitude/feeling
Extentions

Other Propeitary
Brand Assets

Competitive Advantage

Efficiency and
Effectiveness of
Marketing
Programs
Brand Loyalty
Prices/Margins
Brand
Extensions
Trade Leverage
Competitive
Advantage

Conceptualizing Brand Equity

Drive Toward or
Against Brand

Customer
behavior
Discrimination
and value

Perception/
Product

Knowledge
structure

Brand
Communication
and Contacts

Brand Equity
(Surplus )

Worth of the
Brand

What is Brand Equity?

Brand Equity is the marketing effects and outcomes that a product has with its brand name compared to
what it would get if the same product did not have a brand name. The fact is that the company that
owns a well-known brand can charge a premium from its customers. The fact is that, the consumers
knowledge plays an important role here. The consumers knowledge about the brand makes the
manufacturers and the advertisers act differently or take different measures for the marketing of the
brand. Brand equity is one of the factors that can increase the financial value of the brand to the brand
owner. Even though brand equity is strategically crucial it is at the same time almost impossible to
quantify.
The purpose of brand equity metrics is to measure the value of the brand. A brand encompasses the
name, logo, and perceptions that identify a product, a service or a provider in the minds of the
consumers. This takes the form of advertising, packaging and other forms of marketing communication
and becomes the focus of the relationship with the consumers. The 3 primary metrics that is used to
measure or quantify brand equity are i) Loyalty towards the brand, ii) Ability of the brand to charge a
premium and iii) Ability of the brand to leverage its brand name through brand extensions.
The concept of brand equity began in the 1980s by some advertising agencies and was popularized by
Aaker through his bestselling book Managing Brand Equity. Since then there have been major
developments in the field of brand equity with various agencies developing their own models to
quantify this intangible power of an intangible
asset. Some of these models are:

Equity Engine: Equity Engine, developed

by Research International, is one of the
most elegantly parsimonious models of
brand equity. Essentially, it expresses
brand equity as a combination of the
functional benefits delivered by the brand
(performance) and the emotional benefits
(affinity). Equity Engine incorporates a
form of conjoint methodology that
establishes the price premium that a
brand's equity will support while still
maintaining a "good value for money"
rating from customers.

Equity Builder: This method developed by

the Ipsos Group is unique amongst all the
models created to measure brand equity
focuses on establishing the emotional
component of brand equity.

Kevin Lane Keller's Model: This is a

proprietary tool which is used to measure
brand equity by looking at the brand as a
blend of the rational and emotional
which are measured in terms of brand
performance and imagery. Customers
relationship to a brand is then plotted in
terms of their altitude on the pyramid of
engagement and their relative bias
towards a rationally dominant or
emotionally dominant relationship is
established.

BrandDynamics: This model is developed

by Millward Brown with the notion of an
engagement pyramid as its foundation.
This approach classifies the relationship
that a customer has with a brand into
one of the five stages: presence,
relevance, performance, advantage, and
bonding.

Winning Brands: This methodology has

been developed by ACNielsen. Winning

Brands begins from a behavioral
observation of brand equity. Brand
equity is then measured in terms of a
customer's frequency of purchase and
the price premium paid.
BrandDynamics: This model is developed
by Millward Brown with the notion of an
engagement pyramid as its foundation.
This approach classifies the relationship
that a customer has with a brand into
one of the five stages: presence,
relevance, performance, advantage, and
bonding.
Winning Brands: This methodology has been developed by ACNielsen. Winning Brands begins
from a behavioral observation of brand equity. Brand equity is then measured in terms of a
customer's frequency of purchase and the price premium paid.

10

Measuring Brand Equity:

There exists many-a-model to measure brand equity but there isnt any one single model that can
quantify this abstract concept known as Brand Equity in all its glory. We have used two models to
measure this concept:
A variance of the famous Brand Equity Ten developed by David Aaker
A multi attribute regression model based on consumer buying behavior

Brand Equity Ten:

David Aaker has defined Brand Equity as a set of assets (and liabilities) linked to a brand's name and
symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that
firm's customers. Aaker highlights 10 attributes of a brand that can be used to assess its strength. These
include Differentiation, Satisfaction, Perceived Quality, Leadership, Perceived Value, Brand Personality,
Organizational Associations, Brand Awareness, Market Share and Distribution coverage. In developing a
variance of this model what we have done is replace the organizational association, market share and
brand personality parameters with a price premium so as to gauge the perception of the consumers
along the metrics of brand loyalty and the brands ability to charge a premium. In order to analyze the
brand equity of HP it was compared to three of its primary competitors- Dell, IBM and Apple.
Aaker doesn't weight the attributes or combine them in an overall score, as he believes any weighting
would be arbitrary and would vary among brands and categories. Rather he recommends tracking each
attribute separately. Therefore we have developed a Brand Equity Index which was developed with the
overall score that the brands received in comparison to a base figure. The being the average score that
the respondents can give.
(Average rate for each parameter 3, no of respondents 50 and average score 50*3=150)

Analysis of the model with individual parameters:

(for the calculations please refer to Brand Equity Excel sheet attached)

Positive variation from the base figure- Positive Brand Equity

Negative variation from the base figure-Negative Brand Equity

Brand awareness: HP has a score which is only 15% above the base. Position of HP 3rd .
Technological leadership: HP is 24% higher than the base but apple has a 52% higher score over the
base. Position of HP under this parameter is 3rd.
Worldwide presence: HP has 40% higher score in this parameter than the base while Dell has score 3%
more. Position of HP 2nd.
Willingness to pay a premium: Under this parameter HP has a negative 3% variation from the base
score while the average variance is 6%. This positive variance is the result of higher inclination of
respondents to pay higher premium to Apple brand. Position of HP 3rd

11

Willingness to recommend: Willingness to recommend is the ultimate test of customer satisfaction and
in this factor, HP fails miserably in comparison with other competitors as it has only a 3% variance from
the base only while the average variance is 19% positive and Dell has 37% positive variance from the
base in this category. Position of HP 3rd
Reliability of the brand: The average variance is 23% above the base but HP has only 14% variance from
the base. This shows that HP has a lower reliability perception in comparison to the industry average.
Position of HP 3rd.
Value for money: In this parameter, HP has a very low variance of 5% from the base while Dell leads this
segment with a 41% variance. Position of HP 4th
Innovativeness: In this parameter there is positive average variance of 22% from the base. In this regard
also HP fails miserably by having only 11% variance from the base while Apple has a 55% positive
variance from the base. Position of HP 3rd
Quality: In this pillar for determining brand equity HP has only 15% positive variance while Apple is the
leader in this segment with a 50% positive variance from the base. Position of HP 3nd
Customer service quality: In this category Dell is clear-cut winner with 43% positive variance while HP
just manages to hang on with 1% positive variance. Position of HP 3rd
Differentiated: HP scores higher than the average variance with a 15% higher score from the base.
Position of HP 2nd
Overall Experience: HP has a negative variance of 8% from the base in this pillar for measuring brand
equity. Position of HP 3rd

Brand Equity Index

250
200
150
Assumed Average
100

Actual Average
IBM

50

HP
0

Dell
Apple

12

13

Multi Attribute Regression Model

(for detailed calculation please refer to the brand equity excel sheet attached)
This model has been designed keeping in mind the consumer buying behavior towards technological
products. This model looks at the three metric of brand equity-brand loyalty, price premia and
leveragability. This model looks at two things the relevance of attributes in the mind of a consumer and
position of that attribute in the respondents mind when it comes to the brand HP. A regression model
was developed to quantify the three metrics as per the independent variables that is related to them. It
was done by creating a best fit line for each. The best fit line equation is
Y = (mx1+mx2++mxn)+C, where m= R2(slope of the line)
X= independent attribute
Y= dependent attribute
For each of the metric on which the Brand equity has to be measured attributes were assigned to each
on the basis of a correlation and proximity matrix. Every attribute was then given a weightage as per the
relevance of the attribute in the mind of the consumers.

50
45
40
35
30
25
20

Agree

15

Neutral

10

Disagree

5
0

The above graph shows how the weightages were derived.

14

Brand Loyalty
Based on the correlation and the proximity matrix, 7 independent variable attributes have been taken
and measured against a dependent variable or attribute. Individual weightage of the attributes have
been taken according to the relevance of those attributes in consumers mind and thereby a score for
HP is generated. A total score is also generated by multiplying the weights and the maximum possible
rates that the respondent has given. Accordingly HP was analyzed. The percentage score have been
generated to show the position of HP and the scope of improvement.

250
200
150
100

Total Score
HP Score

50
0

Ability to Charge Premium

The percentage score of HP has been generated in a similar way as shown above. Here an ANOVA and
regression analysis has been done to get an overall picture of the perception of the consumers about
the attributes among various brands vis-a-vis the willingness of the consumers to pay a premium and
accordingly the recommendations are made.

180
160
140
120
100
80
60
40
20
0

Total Score
HP Score

Pay
Premium

Innovative

Quality

Price

CS

15

Brand Leveragability
The analysis has been done taking into consideration how differentiated the brand is in the minds of the
consumer and then compared with the importance of the attribute differentiation in the mind of the
consumers. A hypothesis has been taken which states that HP is a leverageable brand. By executing
ANOVA and Regression analysis the hypothesis has been accepted. The bar graph below shows the
willingness of the consumer to buy diversified products such as cars apparels etc. produced by
technological brands and the willingness to buy the same diversified products if produced by HP.

I agree that technological companies can make

the followings
healthcare
20%

car
27%

Accessory
33%

FMCG
20%

35
30
25

Agree

20

Neutral

15

Disagree
HP

10
5
0
car

FMCG

Accessory

16

healthcare

Brand Equity combining 3 Pillars

Brand equity has been calculated by using the best fit line regression equation keeping Brand Equity on
the Y axis and the 3 pillars on the X axis. This shows the sensitivity and the strength of the relation
between the overall brand equity and the pillars and also shows the strength of the relation in between
the 3 pillars.

R square = 0.390
R square is the slope of the regression line which shows how sensitive is the brand equity to the 3 pillars
that constitute the brand equity. Similarly R square for the different attributes that make up each of the
pillar have been calculated which depicts how sensitive is the following attribute to the final Brand
Equity.

The overall scores have been calculated of each of the 3 pillars for different consumer responses. The
correlation and the variations among the responses for different attributes of the individual pillars have
been calculated and thereby weights have been provided. The Brand Equity has been calculated by
taking the average of the values of the 3 pillars provided by individual respondents and has been
incorporated in the Y axis. The X axis constitutes of the 3 pillars. Accordingly a best fit line has been
generated using regression analysis.
The diagram below shows the regression line. (l-leveragability, p-premium and lo-loyalty)
5
4.5
4
Axis Title

3.5

2.5

lo

Linear (l)

1.5
1

Linear (p)

0.5

Linear (lo)

0
0

0.5

1.5

2.5

3.5

4.5

Axis Title

The above graph plots the 3 pillars that define Brand Equity. Here Brand Loyalty, Brand Leveragability
and Price premia are the dependent variables while the attributes pertaining to them are the
independent variables.

17

4.5
4
3.5
3
2.5

Series1

Linear (Series1)

1.5
1
0.5
0
0

The above graph shows the best fit line for Brand Equity of HP , brand equity= dependent variable while
Brand Loyalty, Brand Leveragability and Price premia are the dependent variables

18

19

Recommendations:
Brand Equity Eleven
In the brand awareness parameter HP is ranked 3rd amongst its competitors. HP has to improve
its standing in this category through better communication with its existing as well as potential
consumers
HP historically has been considered a leader when it comes to technology but at this point time
in the minds of its consumers it is trailing behind Apple and IBM. This shows that HP has to come
up with more innovative as well as technologically advanced products.
From the survey it was seen that people are not willing to pay a premium for HP products. This
ability of a brand to command a premium comes from various attributes like innovation,
reliability, quality and after sales service. As HP scores low in all these attributes its ability to
charge a premium also gets negatively affected. It should do something with these individuals
attributes to get back this power like:
Improve its product through R & D so as to seem like a reliable and a qualitative
product in the minds of its consumers
Come up with innovative and differentiated products to counter its competition
Improve its after sales service as in case of technological products it is critical, HP
can take a leaf out of Dells book for after sales service
HP is placed 3rd in the parameter of recommendation to others. It is disturbing as willingness to
recommend is most critical measure of brand satisfaction. This shows that its customers arent
happy with the brand. As satisfaction is a function of all the 10 attributes under satisfaction.
Improvement in these attributes will lead to an automatic increase in the satisfaction
parameter.

Multi Attribute Regression Model

(for detailed calculations please refer the attached excel sheet)

Pillars
Brand Loyalty
Ability to charge Premium

Percentage Score of HP
63.5
62.42

Percent scope of improvement

36.5
35.58

Brand Loyalty: From the above figure we see that there is 36.5% scope for
improvement, it can be done by improving HPs position in the attributes that constitute
brand loyalty namely- satisfaction, willingness to pay premium, recommendation,
awareness, reliability, quality, customer service and value for money.
Ability to charge premium: As the table shows that even though HP can charge a
premium there is still a scope for improvement to the extent of 35.58%. This can be
done by innovating the products and improving their quality(both the product and the
after sales service)

20

 Brand Leveragability: From the analysis of the brand it was found that HP is a
leverageable brand. As per the graphs shown previously (in the analysis portion) it can
be deduced that HP can safely enter into automobiles, accessories, FMCG and health
care products.

Overall Recommendations:

Importance of the attributes and their position for each brand:

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0

importance
adjusted importance
ibm
hp
dell
apple

From the above graph we see that HP needs to work on its after sales service as it is the most important
criteria for a technological product. The second most important criteria are quality followed by value for
money. In these two HP is lower than Apple and Dell. HP need to work on improving the quality of the
product which will lead to the product being reliable and a value for money product.

Position of each brand in the following attributes:

5
4
3

ibm

2
1

hp

dell
apple

21

HP has to improve its awareness through better communication strategies and has to improve its
standing in recommendation and leadership parameters by improving its product along the lines
mentioned above. This will automatically lead to an improvement across the three metrics which will
enable HP to improve its brand equity

Brand Equity

4.5

Attributes

4
3.5
3
2.5

Series1

Linear (Series1)

1.5
1

Reliability
Value for
money
Innovation
Quality
Price
Customer
service
Differentiation

Ranks as per
2
R
5
2

0.5
0
0

The most sensitive feature that affects brand equity is customer service, followed by value for money,
price and then quality. So any increase or decrease in these parameters will have a huge impact on the
brand equity. A change towards the positive will increase the brand equity while a negative change will
decrease it.
*The survey result might be a bit skewed towards the negative side as just before this exercise started
there was this news that proclaimed HPs plan to sell off its PC and Pad division.

22

7
4
3
1
6

23

Questionnaire
1. On a scale of 1-5 rate your awareness (knowledge about the brand its logo, tagline, etc.) for the following
brands (1-not at all aware , 5- highly aware) *

1 (not at all
aware)

5 (highly
aware)

IBM
HP
DELL
APPLE

2. On a scale of 1-5 rate the following brands on the basis of its technological leadership position viz-a-viz its
competitors (1-lagging behind others , 5- leader) *

1 (lagging
behind
others)

5 (leader)

IBM
HP
DELL
APPLE

3. On a scale of 1-5 rate the following brands on the basis of world wide presence (1-relatively lower world
wide presence , 5-relatively higher world wide presence) *

1 (relatively
lower world
wide
presence)

IBM
HP
DELL
APPLE
24

5 (relatively
higher world
wide
presence)

4. On a scale of 1-5 rate your willingness to pay a premium for the following brands (1-not at all willing to
pay a premium , 5- absolutely willing to pay a premium) *

1 (not at all
willing to
pay a
premium)

5 (absolutely
willing to pay
a premium)

IBM
HP
DELL
APPLE

5. On a scale of 1-5 rate your willingness to recommend the following brands to others (1-not at all
recommended , 5- highly recommended) *

1 (not at all
recommended)

5 (highly
recommended)

IBM
HP
DELL
APPLE
6. When I buy a technological product, I look for reliability *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
7. On a scale of 1-5 rate your how reliable are the following brands (1-not at all reliable, 5- highly reliable) *

1 (not at all
reliable)

IBM
HP
25

5 (highly
reliable)

1 (not at all
reliable)

5 (highly
reliable)

DELL
APPLE
8. When I buy a technological product, I look for value for money *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
9. On a scale of 1-5 rate the following brands on the parameter of value for money (1-not at all value for
money, 5- high value for money) *

1 (not at all
value for
money)

5 (high
value for
money)

IBM
HP
DELL
APPLE
10. When I buy a technological product, I look for how innovative is the brand *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
11. On a scale of 1-5 rate the following brands on the parameter of their innovativeness (1-not at all value
innovative, 5- highly innovative) *

1 (not at all
innovative)

IBM
HP

26

5 (highly
innovative)

1 (not at all
innovative)

5 (highly
innovative)

DELL
APPLE
12. When I buy a technological product, I look for quality of its offerings *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
13. On a scale of 1-5 rate the following brands on the parameter of the quality of their offerings (1-inferior
quality, 5- superior quality) *

1 (inferior
quality)

5 (superior
quality)

IBM
HP
DELL
APPLE
14. When I buy a technological product, I look for the price of its offerings *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree

15. Rate the following brands on the parameter of price *

bargain
low price, low price,
price quality is quality is
value for
suspect not suspect
money
27

getting
expensive

too
expensive

bargain
low price, low price,
price quality is quality is
value for
suspect not suspect
money

getting
expensive

too
expensive

IBM
HP
DELL
APPLE
16. When I buy a technological product, I look for the quality of customer service *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
17. On a scale of 1-5 rate the following brands on the parameter of customer service quality (1-inferior
customer service, 5- superior customer service) *

1 (inferior
customer
service)

5 (superior
customer
service)

IBM
HP
DELL
APPLE
18. When I buy a technological product, I look how differentiated is the brand in its offerings *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
19. On a scale of 1-5 rate the following brands on the parameter of how differentiated are their offerings (1not at all differentiated, 5- highly differentiated) *
28

1 (not at all
differentiated)

5 (highly
differentiated)

IBM
HP
DELL
APPLE
20. I believe that technological brands can make great cars *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
21. My willingness to buy HP cars *

not at all willing to buy

highly willing to buy

22. I believe that technological brands can make great FMCG products (body wash, shampoo,carbonated
drinks, etc.) *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
23. My willingness to buy HP FMCG products (body wash, shampoo,carbonated drinks, etc.) *

1
not at all willing to buy

5
highly willing to buy

24. I believe that technological brands can make great accessories (watches, apparels, belts, shoes, bags,
etc.) *
Strongly Disagree
Disagree
29

Neither Disagree nor Agree

Agree
Strongly Agree
25. My willingness to buy HP accessories (watches, apparels, belts, shoes, bags, etc.) *

not at all willing to buy

highly willing to buy

26. I believe that technological brands can make great health care products (health drinks, energy drinks,
etc.) *
Strongly Disagree
Disagree
Neither Disagree nor Agree
Agree
Strongly Agree
27. My willingness to buy HP healthcare products *

1
not at all willing to buy

5
highly willing to buy

28. Choose the personality that best describes IBM *You can choose multiple boxes
Professional
Cool/Trendy
Competent
Accomplished
Innovative

29. Choose the personality that best describes HP *You can choose multiple boxes
Professional
Cool/Trendy
Competent
Accomplished
30

Innovative
30. Choose the personality that best describes DELL *You can choose multiple boxes
Professional
Cool/Trendy
Competent
Accomplished
Innovative
31. Choose the personality that best describes APPLE *You can choose multiple boxes
Professional
Cool/Trendy
Competent
Accomplished
Innovative
32. My overall experience with the following brands (if I have used any of the following) have been

1 (Highly
Dissatisfied)

IBM
HP
DELL
APPLE

31

5 (Highly
Satisfied)

32