國立高雄大學亞太工商管理學系碩士班
碩士論文
品牌之價值分析與價值工程
-以一麥當勞加盟商為例
Brand value analysis and engineering
-
An empirical study of McDonald’s franchisee company in Taiwan
研究生：葉庭瑋 撰
指導教授：李亭林 博士
謝 誌
兩年的時間過得很快，既快樂又充實的碩士生活即將在論文完成後結 束。記得當初決定來高大念書的那晚，其實離入伍只剩一周不到的時間， 心中早已準備要去服役，但在和父親深夜詳談後，毅然決定隔天到高大報 到。當時，心中是懷著期待與興奮卻又感到有點不踏實，所幸，現在回頭 看看兩年前的決定，我想我很有信心地告訴自己，那是個正確的決定。 在高大的這兩年，充實的課程讓我常在報告前幾天總是需要熬夜奮鬥， 但我肯定我是喜悅的，因為這領域就是我愛的呀。除了終於踏進商管領域 的喜悅，在高大，追隨著我敬愛的指導教授-李亭林老師也是件令人快樂 的事情。我很幸運，在人生的每個階段都遇到很棒的老師，而李老師無庸 置疑地，是位很棒的指導教授。更棒的是，李老師就像父母親一樣，有著 嚴父般對我們論文的要求，同時，亦像個母親一樣，關心照料我們的生活。 永遠記得老師說的話：不使霹靂手段，不顯菩薩心腸。這段話說明著老師 對我們這些小鬼的用心與付出。總之，對於李老師，真的有太多的感謝與 愛，非常謝謝老師兩年的指導。 同時，也很感謝兩位口試委員蕭乃沂教授與丁一賢教授，感謝兩位教 授在口試時，給予我論文修改上相當多的建議，讓這份論文的邏輯更加清 晰合理。 此外，我想能獨立完成英文論文，這必須感謝我的父母親對於我從小 的栽培與教育，沒有爸爸媽媽的協助，我不可能有能力用英文完成論文更 不可能有能力到國外參加研討會。當然，在求學期間，也都是靠著爸爸媽 媽的金援，我才能無後顧之憂的完成學業還有遊山玩水。很難得有一本正 式的文本能夠打上對於父母的感謝與愛，我很想花個萬字去表達對父母的 感謝，但是礙於要感謝的人太多，我還是在此打住，並用著最誠摯最敬愛的語氣告訴我的爸爸媽媽，謝謝您們對我的付出，我都能夠體會，也永遠 放在心上，家人永遠都是擺在庭瑋心中的第一順位，爸爸媽媽我愛您們。 當然，我的弟弟育瑄，你哥哥我也愛你，還有最棒的女朋友毅佳以及所有 表哥表姊們，非常的感謝您們平時對我的照顧。 這兩年除了親人朋友，還有這兩年來陪伴我成長的學長與同學，最重 要的還是兩位戰友，桓毅和禹唐，謝謝你們平常協助我，我們以後大概還 要互相羈絆很長的一段時間吧，還有老頭朝榮，謝謝你雖然我不知道要謝 謝你什麼。當然，還有其他亞太 103 的同學以及在職專班的前輩們，很謝 謝您們對我的照顧與包容，庭瑋都會一一記在心頭。 最後，恭喜葉庭瑋也就是我本人，恭喜你又過了一個階段，未來的人 生只會越來越多的挑戰，但我期許你永遠正面地面對這些挑戰，勇敢承擔 更多的責任，更重要的，當有了一番成就後，除了回報父母以及親人，更 不能忘記所有曾經教育過你的師長們，曾經幫助過你的朋友以及同學們， 沒有他們，你誰也不是。 葉庭瑋 謹誌於 國立高雄大學亞太工商管理學系碩士班 中華民國 105 年 6 月
品牌價值分析與工程-以一麥當勞加盟商為例
指導教授：李亭林 博士 國立高雄大學亞太工商管理學系 學生：葉庭瑋 國立高雄大學亞太工商管理學系碩士班 摘要 關於品牌價值的相關研究已被討論多時且也有許多學者及組織發展 出品牌價值的衡量方式，像是 Interbrand 以及 Financial World 都是知名的 品牌價值分析模式。然而，多數現有的衡量方法乃是以單一觀點進行衡量， 僅有少數研究針對不同觀點進行結合，因此，本研究主要之目的是建立一 套能夠顧及公司經營面以及顧客面的品牌衡量架構，並以國內目前市面上 的一家國際品牌公司作為研究對象，期望發展品牌衡量模式之外，尚能根 據研究結果提供該企業關於品牌建立與發展的管理建議。本 研 究 將 採 用 價 值 分 析 與 工 程 (Value Analysis and Value Engineering ,VA/VE)作為研究品牌價值的方法，並以麥當勞作為本論文架 構之實證對象。相較於其他品牌分析觀點，VA/VE 之工程觀點能夠結合公 司行銷活動成本(工程觀點)與顧客品牌認知(消費者觀點)做為衡量品牌的 基礎。因此，這項研究對企業營運具有實質助益，能夠協助企業以最低成 本方式，達到最佳的行銷效果。 本研究個案，首先透過觀察 7 家在台灣之國際知名企業的社群網路行 銷活動據以設計專家問卷並建立研究架構，再針對麥當勞的顧客發放品牌 權益認知強度之問卷共 224 份(有效問卷 215 份)，以作為價值分析的功能 係數資料來源，後續結合訪談麥當勞加盟主之結果對各品牌權益構面進行 價值判定。 本研究結果發現，在 Aaker 品牌權益模型中，麥當勞最有價值的部分 依序為品牌聯想、知覺品質、品牌忠誠度以及品牌知名度。再結合本研究 之架構，本研究建議麥當勞公司能夠用更多關於感動行銷、運動行銷乃至 於展場行銷的手法，以較低成本支出，提升公司的品牌價值。 本研究將品牌權益的相關行銷活動成本視為一項工程(工程觀點)，並 透過機能分析與成本分析去判定最有效益的行銷手法，有別於其他品牌價 值分析方法僅能提供企業在併購上或是品牌排名上的用處，本項工程觀點 更適合企業在建立品牌之過程中適時採用，並以更經濟的方式創造更強勢 的品牌。 關鍵字：品牌鑑價、價值分析與工程、強勢品牌
Brand value analysis and engineering
-An empirical study of McDonald’s franchisee
company in Taiwan
Author：Dr. Ting-Lin Lee
Department of Asia-Pacific Industrial and Business Management National University of Kaohsiung
Author: Ting-wei Yeh
Department of Asia-Pacific Industrial and Business Management National University of Kaohsiung
ABSTRACT
Brand value has been discussed for a long time and there are some well-known organizations or scholars have already developed many different methods to measure the brand value of a corporate such as brand valuation Interbrand and Financial World. However, most of the existing methods of brand valuation are based on single perspective to do valuation.
Hence, the main purpose of this study is to develop a different method which includes enterprise managing perspective and customer perspective. And the research took famous international brand company, McDonald’s, to verify the feasibility of this method.
The research method of this paper is VA/VE (value analysis/value engineering) which had wildly used for more than fifty years in many different industries. It was commonly used in reducing the cost of a manufacturing progress or a single product and still keeping the same value of a product. And
comparing to other valuation methods of brand equity, the perspective of engineering, VA/VE combined two viewpoints to measure the brand equity and so as to practically help enterprises enhance their brand effects with less cost.
This case study firstly designed expert questionnaire by observing seven huge companies’ marketing activities on Facebook fan page and official websites to establish the research framework, and secondly collected data by 224 (215 are effect) customer questionnaires which measuring the degree of customers toward brand and interviewed with an owner of McDonald’s franchise to count the value of McDonald’s marketing activities.
According to the result, the most valuable construct of McDonald’s is brand association which followed by perceived quality, brand loyalty, and the last one is brand awareness. Thus, this study recommends McDonald’s to conduct more activities regarding to brand association such as moved marketing, sport marketing and exhibition marketing.
This study viewed building a brand as an engineering process and defined the best marketing ways by evaluating functional and cost coefficient. Being different from other methods merely contributed on M&A or ranking, VA/VE is more suitable for the company when building a stronger brand with an economical cost.
Keywords: brand valuation, value analysis and value engineering (VA/VE), strong brand
Table of Contents
Table of Contents ... VII
List of Tables ... IX
List of Figures ... X
Chapter One Introduction ... 1
1.1 Research Background ... 1
1.2 Research Motivation ... 4
1.3 Research Objectives and Research Questions ... 5
1.4 Research Procedure ... 7
Chapter Two Literature Review ... 9
2.1 Brand ... 9
2.2 Brand equity ... 14
2.2.1 The development of brand equity ... 14
2.2.2 Aaker’s brand equity model ... 18
2.3 The studies of brand valuation... 22
2.3.1 Asset perspective ... 22 2.3.2 Customer perspective ... 24 2.3.3 Comprehensive perspective ... 26
2.4 Introduction of VA/VE ... 28
2.4.1 Developing of VA/VE ... 30 2.4.2 Calculating of VA/VE ... 32Chapter Three Research Methodology ... 34
3.1 Research framework ... 34
3.2.1 Functional Coefficient ... 36
3.2.2 Cost coefficient ... 41
3.3 Calculating method ... 42
3.4 Case company ... 44
Chapter Four Empirical Study: The case of McDonald ... 46
4.1 Expert questionnaire ... 46
4.2 Customer questionnaire ... 47
4.3 The VA/VE of McDonald’s ... 48
4.3.1 Functional coefficient by customer questionnaire ... 49
4.3.2 Cost coefficient ... 51
4.3.3 The Value of Brand Equity ... 52
Chapter Five Conclusion ... 56
5.1 Conclusion ... 56
5.2 Contribution and Managerial Implication ... 57
5.2.1 Contribution ... 57
5.2.2 Managerial implications ... 58
5.3 Research limitations ... 59
5.4 Recommendations for future research ... 60
Reference ... 62
Appendix I ... 66
IX
List of Tables
Table 1-1: Advantages and disadvantages on branding ... 2
Table 2-1: Concepts of brand equity ... 16
Table 2-2: Developing of VA/VE ... 30
Table 3-1: Brand ranking in 2015 ... 36
Table 3-2: Sample of expert questionnaire ... 37
Table 3-3: Information of experts ... 38
Table 3-4: Sample of expert questionnaire ... 40
Table 3-5: Sample of counting result ... 43
Table 3-6: Marketing activities of case company ... 44
Table 4-1: Result of expert questionnaire ... 46
Table 4-2: Weight of constructs ... 49
Table 4-3: The result of customer questionnaire ... 50
Table 4-4: Functional coefficient ... 50
Table 4-5: Value of every construct ... 52
Table 4-6: Different functional coefficient by age ... 53
List of Figures
Figure 1-1: Research Procedure ... 7
Figure 2-1: Aaker’s brand equity model ... 18
Figure 2-2: Opportunities where VA/VE can be applied ... 29
Figure 4-1: Gender of questionnaire ... 48
Figure 4-2: Age of questionnaire ... 48
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Chapter One Introduction
1.1 Research Background
In direct way, tangible assets such as manufacturing assets, land, and some financial assets have been regarded as the main resource of a company value. However, in past several years with the market condition changed, only viewing a company by simply on tangible assets is not representative enough for a company. Other than tangible assets, intangible assets became an importance resource of a company, the most significant part of intangible asset is brand, also comes with some other intangible assets including patents.
Because of the changing viewpoint toward assets of a company, recently, it was very crucial to build up a brand (branding) for a company. No matter what size or what industrial of a corporation in, branding was said to be the most important way to make a company run longer.
Onkvisit and Shaw (1989) told that the advantages and disadvantages on branding via observing from manufacturer aspect (table1.1).Based on their observation, to develop a brand can the owner obtain better distinguish of products and gain brand fame. Also, brand can lead to higher customer loyalty and price premiums. In sale processes of product, brand can ensure the quality of product, the equity of consumers, middleman and the producer.
Table 1-1: Advantages and disadvantages on branding
TYPE Advantages Disadvantages
No brand 1. lower production cost
2. lower marketing cost
3. lower legal cost
4. elastic quality and quantity
1. drastic price competence 2. Non market agreements
With brand 1. better agreement and fame on market
2. better opportunity to make product differentiation 3. possibility of brand loyalty 4. possibility of price premiums
1. higher production cost
2. higher marketing cost
3. higher legal cost
Source: Sak O. and J.J. Shaw. (1989).The International Dimension of Branding: Strategic Considerations and Decisions. International Marketing Review, 6(3),
22-34
Also, according to Brassington & Pettitt (2006) the benefits of branding are following.
To consumers:
Consumer can easily identify the products as they are distinctive.
It gives some feelings to the consumers when they shop branded products. It reduces risk in purchasing because consumer knows the quality, features
and other benefits of products without using it.
Helps to have quick buying decision because brand attracts consumers. To the owners:
Companies can charge premium price.
It gives opportunity to the company for line extension through building on the consumer’s perception of the values and character represented by the brand name.
It helps owners to create consumer loyalty as it gives value to the consumers what they pay for.
3
Branded items make easier for the suppliers to process the orders and track down problems.
Retailers are happy to sell branded products because they are good seller.
As the result, there are studies focused on measuring brand value and enhancing brand value. To build a strong brand, a manager must to enhance the value of a brand.
Aaker (1991) defined brand value as:
Brand value is an aggregate of assets and liability of brand, name, logo and symbol. Once changing the name or logo, it may result in the assets and liability of brand disappearing.
Brand value can also be seen from other aspects, with reference to literature of Brand Finance, the term Brand Value is considered to be the net present value of the estimated future cash flows attributable to the brand.
The definition of brand value can also be seen as the extra payment that customer willing to pay on products with brand and without brand.
From the definition of brand value, it can be said to be a brand name that customers will pay more on its products and lead to more cash flows in the future.
Due to the fact that merger and acquisition being prevalent, estimating value of a brand became important day after day and when it comes to brand value measurement, there are some different scholars with different definitions. Aaker constructed brand loyalty, brand awareness, perceived quality, and brand association as the brand value structure. Schultz (1998) though brand had value
to marketing organization and to customers. On marketing organization means the price of brand on the market. However, this price still be based on the brand value toward customers. Some scholars took finance equity to measure it. But be still pending.
1.2 Research Motivation
Brand has so many advantages so there are already many different methods to measure a brand, but still some works to do such as find a more direct way or a cross perspective way to calculate a brand value.
This research utilizes VA/VE to do brand value analysis. The VA/VE method was originally used in manufacture area and was aim to reduce the cost of producing. So, this research tried to apply VA/VE in a new area to see if this method can be also useful in measuring brands.
The framework of this research is including viewpoint of producers’ and of customers’. By these two different viewpoints, the result of brand value will be more practical because customers’ feeling also been included and the brand manager can easily find a direct way to conduct marketing activities to enhance brand value.
The method VA/VE was last for many years in industrial area and has contributed a lot there. Especially in reducing the cost of producing a product and keep it in the same function level for consumers as it was. Due to its contribution and used widely for a long time, the researcher tried to find a way
5
for VA/VE to use on marketing and tried to find a way to do marketing with lower cost (marketing budget) and still keep the brand with the same strength on competition market.
1.3 Research Objectives and Research Questions
The main purpose of this research is to build a brand valuation framework and utilize practically of this new framework to measure the brand value of a company. This paper will extend three purposes from the main purpose.
The first purpose of this thesis is to construct a new framework of VA/VE on brand valuation. There were many concepts of brand value; this research will find a suitable model to be the base of VA/VE framework.
The second purpose is to design a customer questionnaire to measure cognitive degree of customers toward brand. And in the research, the author will use the result of customer questionnaire and interview with an owner of franchise of case company to count the value of case company.
And the final purpose of this paper is to calculate real brand value of McDonald’s and also offer some management advice to the manager of the enterprise.
In conclusion, the purposes are written again in the following： 1. To construct a framework of VA/VE on measuring a brand.
2. To design a customer questionnaire to measure the cognitive degree of customers toward brand.
3. To calculate brand value of an enterprise with the combination perspective of enterprises and customers, and give some management advice.
According to the research purpose, the research developed three research questions and some description as following:
1. What is the brand equity framework of VA/VE?
This research aimed to find out the relationship between brand equity constructs and marketing activities of companies to build up the new framework of VA/VE.
2. What is the cognitive degree of customers toward brand?
In this research, the author tried to design a customer questionnaire to understand the customer feeling toward brand equity of case company, which will be as the data source for counting functional coefficient
3. What advice this research could give the case company and make the company manage brand more efficiently?
This research aims to calculate the brand value of the company and according to the result to create some advice to the case company on managing brand.
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1.4 Research Procedure
Figure 1-1: Research Procedure Research procedure:
Firstly, the researcher proposed the research questions and purpose, and then conducted survey on the past concepts of brand with literatures and also observing marketing activities of selected famous brand.
Secondly, construct the research framework by expert questionnaire, and collect customer perspectives by questionnaire and interview with an owner of case company. And according to customer questionnaire and interview,
calculate the functional coefficient and cost coefficient to count the value. At the last of this research, the researcher would suggest some advice on the brand management according to the conclusion of this research.
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Chapter Two Literature Review
A strong brand has more advantages on marketing and higher profit on products. Thus, there were theories about what is called “brand” and how to promote the equity of a brand. This chapter will discuss definition changing of brand and what is brand equity. And also discuss the method of this research VA/VE.
2.1 Brand
A brand is a distinguishing name and symbol (such as logo, trademark, or package design) intended to identify the goods or services of an enterprise and to be different from the competitors of the enterprise. A brand thus signals to the customer the source of the product, and protects both the customer and the producer from competitors who would attempt to provide products that appear to be identical (Aaker, 1991).
From the viewpoint of customer, a brand can be defined as the total accumulation of all customer experiences, and is built at all points of contact with the customers (Kapferer, 2004). A successful brand is a product, service, person or place, augmented in such a way that the buyer perceives relevant, unique added values which match their needs most closely (Chernatony and McDonald, 1998).From the statement above, readers can realize the fact that a brand is definitely has something to do with customers.
Strong brands have some more advantages such as enjoying customer loyalty, the potential to charge premium prices, and considerable brand power
to support new product and service launches. As the result, readers can refer that companies must to have thorough understanding of customer beliefs, behaviors, product or service attributes, and competitors so as to fulfill the customers’ needs and to win higher brand power. Besides, powerful brands provide long-term security and growth, higher sustainable profits, and increased asset value because they achieve competitive differentiation, premium prices, higher sales volumes, economies of scale and reduced costs, and greater security of demand (Temporal, 2000).
The Brand “promise” is the essence of the benefits (both functional and emotional) that customers can expect to receive from experiencing a brand’s products/services, which reflects the heart, soul, and spirit of the brand (Knapp, 2000). Successful brands are those brands which adapt well to the environment and thus survive and flourish in the long term even face competition.
In conclusion, a strong brand has a lot of advantages on the competitive market such as preventing from identical product, supplying unique added value to customers and winning customer loyalty and also acquiring sustainable profit from loyal customers.
From the evolution of brand theories, there were so many different definitions on brand.
American Marketing Association (1960) proposed the following company-oriented definition of a brand as:
A name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.
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This definition of brand was the very first concept of brand and also inspired some scholars’ interest on the research of brand. Besides, a new definition no doubt will face some different voice from other scholars.
This definition has been criticized for being too product-oriented, with emphasis on visual features as differentiating mechanisms (Arnold, 1992; Crainer, 1995). Despite these criticisms, the definition has endured to contemporary literature, albeit in modified form.
Dibb et al. (1997) use the Bennett (1988) variant of the definition which is:
A brand is a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sellers.
The key changes to the original definition are the words “any other feature” as this allows for intangibles, such as image, to be the point of differentiation.
Ambler (1992) takes a consumer-oriented approach in defining a brand as: Brand is the promise of the bundles of attributes that someone buys and providing satisfaction to customers. The attributes that make up a brand may be real or illusory, rational or emotional, tangible or invisible.
These attributes emanate from all elements of the marketing mix and all the brand's product lines. The attributes of a brand are created using the marketing mix, and are subject to interpretation by the consumer.
There were so many aspects of brand definition that may make readers confusing. But in briefly, whenever a person creates a new name, logo or symbol for a new product or service, we could say he or she created a new
brand on the market. 2.2.1 Brand function
A number of studies have explored the various effects of brand functions from four different aspects and we will discuss above:
Product-relatedeffects
Brand name has been shown to be positively associated with customer product evaluations, perceptions of quality and purchase rates (Day & Deutscher, 1982; Dodds et al.,1991; Brown & Dacin,1997; Leclerc, et al.,1994; Rao & Monroe,1998).
This tendency may be increased by the uniqueness of brand associations. (Feinberg et al., 1992)
Furthermore, familiarity with a brand has been shown to increase customer confidence and attitude toward the brand and also purchase intention (Feinberg et al., 1992; Laroche et al., 1996). Chaudhri and Holbrook (2001) showed brand trust and brand effect combine to determine customer purchase loyalty and attitudinal loyalty and that loyalty leads to greater market share and higher relative price of brand.
Price-related effects
Lots of studies have showed that brand can command larger price differences. (Simon, 1979; Park & Srinivasan, 1994; Agrawal, 1996; Sethuraman, 1996) And from the view point of competitive, brand leaders draw a disproportionate amount of market share from smaller share company(Allenby & Rossi, 1991; Grover & Srinivasan, 1992; Russell &
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Kamakura, 1994) In addition, lower level of price sensitivity have been found for households that are more loyalty(Krishnamurthi & Raj, 1991)
Communication-related effects
A strong brand needs to communicate to the consumers and to win the fame on the market. A very common way to communicate with a consumer is advertisement. Brown and Stayman (1992) maintain that halo effects related to the positive bias the evaluation of advertising of the brand. Humor in ads seems to be more effective for familiar or already favorably evaluated brand than for unfamiliar or less-favorably evaluated brand. (Stewart & Furse, 1986; Chattopadhyay & Basu, 1990; Weinberger & Gulas, 1992) Consumers appear to have a more negative reaction with ad tactics such as comparative ads. (Belch, 1981)
Other advantages associated with more advertising include increased likelihood of been the focus of attention (Dhar & Simonson, 1992) and increased brand interest (Machleit et al., 1993).
Channel-related effects
Montgomery in 1975 found that products that were from the top firm s in an industry had more chance to be accepted in the channel in supermarket. Some research also supported this found from the finding of most store are more likely to feature famous brands if those store wanted to have high quality image on market (Lal & Narasimhan, 1996).
Briefly speaking, creating a strong brand has more advantages on market than a poor brand when we discuss from competitive view point. That’s also the reason why more and more researches focused on the brand building
methods.
Brand has so many effects and they can add crucial value when the brand is well recognized and has positive associations in the mind of consumers; this concept is also referred to as brand equity. So, next, we will collect some concepts of brand equity.
2.2 Brand equity
When discussing the concept of a strong brand, we need to understand what a strong brand meaning on the market. Therefore, some research started researching on the term “brand equity”. Brand equity is a concept born in 1980s. It has aroused intense interest among business strategists from a wide variety of industries as brand equity is closely related with brand loyalty and brand extensions. Besides, successful brands provide competitive advantages that are critical to the success of companies. A strong brand can also be seen to have higher brand equity. Thus, this chapter will discuss what the meaning of brand equity is.
In simple terms, “brand equity” is a construct that is designed to reflect the real value that a brand name holds for the products and services that it accompanies. Measuring brand equity is considered important because brands are believed to be strong influencers of critical business outcomes, such as sales and market share.
2.2.1 The development of brand equity
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some researchers have concluded that brand is one of the most valuable assets that a company has. High brand equity levels are said to lead to higher consumer preferences and purchase intentions (Cobb-Walgren et al. 1995), also, higher stock returns (Aaker and Jacobson, 1994). Besides, high brand equity brings an opportunity for successful extensions, resilience against competitors’ promotional pressures, and creation of barriers to competitive entry (Farquhar , 1989).
Then, the concept of brand equity began to be used widely in the 1980s by advertising practitioners (Barwise, 1993). Important academic contributors throughout the 1990s were Aaker (1991), Srivastava and Shocker (1991), Kapferer (1992), and Keller (1993, 1998).
There are two main different perspectives of the study of brand equity-financial, customer based (marketing).
(1) Financial perspective
The first perspective of brand equity is from a financial market’s point of view where the asset value of a brand is appraised (Farquhar et al., 1991；Simon and Sullivan, 1990). The financial perspective of brand equity was normally defined by goodwill, cash flow, financial value, value that can be earned, present discounted value; and evaluate by economic or financial model the present cash that brand can get and also view the brand value as the asset of the company, present the value on the financial statements, as the evidence of some financial behaviors such as stock exchange, M&A (mergers and acquisitions).
The second perspective of brand equity is based on customers’ response of the brand name (Keller, 1993; Shocker et al., 1994). Most of the brand equity from marketing perspective defined from customer cognition, attitude, or behaviors. Thus, we can seem that customer based perspective is almost the same as the marketing perspective. The marketing perspective is aim to make the brand product earn higher market position and let the product value become higher than the true value of the same product. Only when brand product gaining positive feeling and value preference can they promote the willing to buy of customers.
There are so many definitions and construct of brand equity. Here are some different definitions from different researchers in Table 2-1
Table 2-1: Concepts of brand equity
Researcher Concepts
Leuthesser,1988 The set of associations and behaviors on the part of the brand’s consumers, channel members, and parent corporation that permits the brand to earn greater volume or greater margins than it would without the brand name and that gives the brand a strong,
sustainable, and differentiated advantage over competitors.
Aaker ,1991 The value consumers associate with a brand, as reflected in the dimensions of brand awareness, brand
associations, perceived quality , brand loyalty and other proprietary brand asset.
Swait et al ,1993 The consumer’s implicit valuation of the brand in a market with differentiated brands relative to a market with no brand differentiation. Brands act as a signal or
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cue regarding the nature of product and service quality and reliability and image/status.
Kamakura & Russell,1993
Customer-based brand equity occurs when the consumer is familiar with the brand and holds some favorable, strong, and unique brand associations in the memory. Keller,1993 The differential effect of brand knowledge on consumer
response to the marketing of the brand. Brand
knowledge is the full set of brand associations linked to the brand in long-term consumer memory
Lassar et al.,1995 The consumers’ perception of the overall superiority of a product carrying that brand name when compared to other brands. Five perceptual dimension of brand equity includes performance, social image, value,
trustworthiness and attachment. Source: summarized by author
Through the concept of brand equity was first proposed, there have so many different dimensions and so many models of brand equity.
Nevertheless, the Aaker’s brand equity model was the most utilized and most common. (Keller 1993; Motameni & Shahrokhi, 1998; Yoo & Donthu, 2001; Bendixen et al, 2003; Kim et al, 2003). As the result that Aaker model was used so wildly, this research would also take the Aaker model as the basic framework of this paper.
2.2.2 Aaker’s brand equity model
Figure 2-1: Aaker’s brand equity model
Source: EUROPEAN INSTITUTE FOR BRAND MANAGEMENT (2009)
Aaker’s brand equity model included five dimensions (brand loyalty, brand awareness, perceived quality, brand associations, and other proprietary assets).
(1) Brand loyalty
Aaker(1996):「Loyalty is a core dimension of brand equity. You usually offend your core first because they are connected to the brand and they care. 」
Aaker (1991) defines brand loyalty as the attachment that a customer has to a brand. Grembler and Brown (1996) describe different levels of loyalty. Behavioral loyalty is linked to consumer behavior in the marketplace that can
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be indicated by number of repeated purchases (Keller, 1998)
Aaker (1996) also identify price premium as the basic indicator of loyalty. Price premium is defined as the amount a customer will pay for the brand in comparison with another brand offering similar benefits and it may be high or low and positive or negative depending on the two brands involved in the comparison. Thus, we could realize that brand loyalty including two parts, repeated purchases and price premium.
According to Aaker (1996), brand loyalty can be measured as following: Were you—dissatisfied vs. satisfied vs. delighted—with the product or
service during your last use experience?
Would you buy the brand on the next opportunity?
Is the brand the—only vs. one of two vs. one of three vs. one of more than three brands—that you buy and use?
Would you recommend the product or service to others?
(2) Brand awareness
Awareness is a key determinant identified in almost all brand equity models (Aaker 1991, Kapferer1991, Keller 1992, Agarwal &Rao 1996, Krishnan 1996, Marshall & Keller 1999, Mackay 2001).
Aaker (1996) identified other higher levels of awareness besides recognition and recall. He included top-of-mind, brand dominance, brand knowledge and brand opinion. Brand knowledge is the full set of brand associations linked to the brand (Keller, 1993). Aaker conceptualizes brand awareness must precede brand associations. That is where a consumer must first be aware of the brand in order to develop a set of associations (Washburn
and Plank, 2002).
Brand awareness reflects customers’ mind of the brand and there are several levels of awareness including (Aaker, 1996):
• Recognition (Have you heard of the Buick Road master?) • Recall (What brands of cars can you recall?)
• Top-of-Mind (the first-named brand in a recall task) • Brand Dominance (the only brand recalled)
• Brand Knowledge (I know what the brand stands for) • Brand Opinion (I have an opinion about the brand)
(3) Perceived quality
It is “the consumer’s subjective evaluation of the product” (Zeithaml, 1988). Perceived quality provides value for the consumer (Aaker, 1991; Pappu, Quester, & Cooksey, 2005). Perceived quality has also shown to be associated with price premiums, price elasticities, brand usage, and stock return (Aaker, 1996) . Perceived quality can be measured with scales such as the following:
In comparison to alternative brands, this brand • has: high quality vs. average quality vs. inferior quality
• is: the best vs. one of the best vs. one of the worst vs. the worst • has: consistent quality vs. inconsistent quality
(4) Brand associations
Brand associations are perceived as elements (nodes) related to the brand in consumer mind which contain the brand meanings (Aaker, 1991; Keller, 1993; Krishnan, 1996; Korchia, 2000).
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Based on the Aaker’s viewpoint in 1996, there were three aspects to measure brand association.
Brand as product (value).
Brand as person (brand personality).
Brand as organization (organizational associations). Value
The brand-as-product perspective focuses on the brands value proposition which usually involves a functional benefit, is basic to brands in most product classes.
According to Aaker, value can be measured by the following: whether the brand provides good value for the money
whether there are reasons to buy this brand over competitors Brand personality
Brand personality is based on the concepts that brand is a person. The brand personality can provide a link to the brands emotional and self-expressive benefits as well as a basis for customer/brand relationships and differentiation.
According to Aaker, brand personality can be measured by the following: This brand has a personality.
This brand is interesting.
I have a clear image of the type of person who would use the brand. Organizational associations
The brand-as-organization perspective, is considering the organization (people, values, and programs) that lies behind the brand. Organizational associations that are often important bases of differentiation and choice include
having a concern for customers, being innovative, striving for high quality, being successful, having visibility, being oriented toward the community, and being a global player.
According to Aaker (1996), organization associations can be measured by the following:
This brand is made by an organization I would trust. I admire the brand X organization.
The organization associated with this brand has credibility
According to Aaker (1996), brand equity can be divided in 5 different dimensions as was told in the brand equity model of Aaker. However, the fifth dimension, other proprietary assets, will not be discussed in this research due to the reason that proprietary asset is more tangible than other dimension that can be measured simply by calculating the target company’s assets. As the result, this research will merely focus on the other four dimensions.
2.3 The studies of brand valuation
There are three different perspectives of brand valuation, asset perspective, customer perspective, and comprehensive perspective.
2.3.1 Asset perspective
The asset perspective is to measure the value of brand asset from corporate finance, which means brand value is reflected in the financial benefits obtained by companies from the brand.
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The Interbrand method and Financial World method are examples of asset perspective. Interbrand method has a basic assumption:
“Brand value is reflected to ensure that brand owners can get a more stable income in the future.” Thus, it is necessary to assess brand value on the basis of the future earnings of company through financial analysis, market analysis and brand analysis.
First, use financial analysis to evaluate the residual earnings of a product or a business, which refers to the balance of the future income from the product or business minus the revenue from the tangible assets.
Second, clear the impact of brand on the industry of the product or service through market analysis, thus determining how many percentages of residual earnings are created by the brand, so as to calculate the brand’s future earnings.
Third, take the analysis from ten areas including authenticity, clarity, brand commitment, brand protection, adaptability, consistency, diversity, visibility, relevance and understandability to determine the coefficient of brand strength, then convert the brand strength coefficient to the discount rate of brand’s future earnings through an S-shaped curve (the discount rate is used when discounting brand future earnings for the current yield).
According to this idea, brand value is calculated as: brand value = future earnings of brand × brand strength.
Based on the advantages of the Interbrand method, the Financial World method develops its own characteristic with the expert assessing brand market performance to obtain the data of brand’s earnings. Assessment is first built on the company’s sales. The expert judges the average profit margin of industry
according to his experience, and calculates the company’s operating profit, from which excludes profits that have nothing to do with the brand, to acquire the data of pure profit created by brand.
Next, calculate the brand strength coefficient using the Interbrand method. Finally, calculate the brand value with the formula as follows: brand value = brand net profit × brand strength.
2.3.2 Customer perspective
Customer perspective is to measure the brand’s status in customers’ hearts from the degree of such aspects as their familiarity with the brand, perception of the brand quality, and association of the brand, etc. Yu and Zhao (2003) believed that customers are the foundation of brand value, and argued that brand value is “the differential response of customers to enterprise marketing activities in the aspects of cognition, emotion, and behavior intention and behavior”.
On this basis, some scholars pointed out that customer- based brand valuation must consider three factors: brand loyalty, perceived quality and brand image. Wang (2004) thought besides the joint action of brand loyalty and brand awareness, brand valuation needs to consider the influence of whether the customer to buy on the real value of brand. Researches under customers’ perspective provide a basis for the quantitative assessment of brand value.
Brand valuation methods based on the customer perspective with quantitative indicators include the premium method and the loyalty factor method. The principle of the premium method is that by calculating how high
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an extra price that customers are willing to pay when buying a particular brand of product or service to determine the size of the brand value. It includes the following three steps.
First of all, through the market research to confirm the price of overflow, namely the extra price that customers are willing to pay for the purchase of a branded goods or services compared with buying a non-branded product or service.
And then calculate the excess profit by multiplying the price with the current sales of the branded product or service.
Finally, get the brand value with the excess profits divided by the industry’s average profit margin of the branded product or service, which is calculated as follows: brand value = the premium × sales/average profit margin. On the basis of consideration of the premium as well as sales of a branded product or service, Fan and Leng (2000) added the element of customer loyalty to further improve the brand valuation method. They believed that brand value embodies in that the brand can increase corporate benefits in the future, which depends on a broad customer loyalty. To this end, they used the “loyalty factor” to represent the proportion of customers deciding to start buying or repeat buying the branded product in the future to all the target customers, with the help of the customer’s brand loyalty and brand attractiveness to assess the brand value. The calculation formula is: brand value = theoretical target customer base × loyalty factor × cycle purchases × (unit product price − unit unbranded product price) × numbers of cycle within the time limit.
2.3.3 Comprehensive perspective
Brand value evaluation based on a comprehensive perspective exhibits establishing the link between brand asset and customers, considering the value brought to the enterprise and the customer at the same time by the brand.
Hence, Scholars pointed out that brand asset value based on the customer can be measured through three dimensions including brand loyalty, perceived quality and brand awareness/association. Washburn and Plank built the evaluation scale of brand equity value from the view of the customer. In addition, He and Zhao found that brand value assessment can be carried out by three factors seven dimensions, in which these three factors are common factor, basic common factor and special factor.
Common factor includes four dimensions: brand loyalty, brand image, entrepreneur image and brand support.
Basic common factor includes two dimensions: brand innovation and brand tenacity, and special factor include a dimension reflecting the industry.
In summary, these results enrich the study of brand valuation method under the comprehensive perspective.
More well-known brand valuation methods based on a comprehensive perspective include the ten elements model of brand equity and the model of customer-based brand equity. Aaker believes, brand value is “a group of assets and liabilities associated with the name and symbol of a brand, which can increase or reduce the value to the company or the customer caused by a
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product or services”, and takes five specific dimensions 10 indicators (that is, ten elements) for brand valuation.
The brand value under this model is calculated as: brand value = (price advantage + satisfaction/loyalty) + (perceived quality + leading brand/popularity) + (perceived value + brand personality + organization association) + brand awareness + (market prices and distribution channels + market share).
In the same period when Aaker proposed the ten elements model of brand equity, Keller also put forward another influential method of brand valuation. The core of this approach is how to measure brand equity value from the customer level, referred to customer-based brand equity model (CBBE).
Among them, the significance means the extent of difficulty and the frequency that the brand can be identified in a variety of situations by the customer. The performance and image are used to measure the degree of customer’s perception of brand connotation from the specific (functional) and abstract angle respectively.
The evaluation and perception measure the extent of customer’s reflection of the brand, the former of which refers to the customer’s view of the brand, and the latter is perceptual behavior of the customer to the brand, such as enthusiasm, self-esteem. The resonance is to measure the strength of the relationship between the customer and the brand. Therefore, the brand value under the CBBE model is calculated as: brand value = brand significance + (brand performance + brand image) + (brand evaluation + brand feeling) + brand resonance.
Being different from these perspectives, the VA/VE method can be seen as the combination of asset perspective (because of cost coefficient) and customer perspective (functional coefficient from customer questionnaire). And the advantages of using this VA/VE method are as following
1. The combination of two viewpoints provides the more trusted result. 2. The enterprise can calculate their marketing activities by themselves.
2.4 Introduction of VA/VE
Value Analysis/Value Engineering (VA/VE) is a method with system management technique. The original purpose of this method is to do value analysis and to find out the better way to reduce cost in the process of producing and still keep product at the same function level. VA/VE was first used from Miles in company G.E in 1947 and was also used world widely and endorsed by many different areas. The most two important organizations of researching and publishing concerning this method are Save international and Value world. Some crucial research paper and conducting will be discussed here.
VA/VE splits in two different parts; VA (value analysis) which is a process that includes some techniques to achieve our main purpose which are improving the profitability of a certain existing product applications and reducing the product’s cost. The key to be successful in VA, the one who conducts VA must have enough knowledge of the cost of product, customer requirements and related manufacturing processes for production. Another part
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is VE, value engineering, which applies to a new product and it uses the same concepts and techniques that applied for VA to pre-manufacturing stages like prototype, concept development and design.VE could also include re-engineering an existing product that needed to be improved. In conclusion, VA/VE can be applied in four opportunities as Figure 2-2 (Opportunities where VA/VE can be applied)
Figure 2-2: Opportunities where VA/VE can be applied Source: summarized by author
In figure 2-2, there are four opportunities to utilize VA/VE. For this study, the author will try to use VA/VE to reduce the cost of branding strategy. In the case company, the managers conducted some different ways to build a strong brand but they do not really understand which method can bring up most of brand value. Thus, with the method, VA/VE, will be more obvious for the managers to construct the brand more effectively and also cost less.
Key successful factor of VA/VE
All companies should think how to upgrade competitiveness. Improving cost is one of the main methods to elevate competitiveness. There are six factors to popularize VA/VE in company.
Deployment opportunities of VA/VE
New product optimization Tactical support need Strategic cost reduction Obsolescence
1. Support from the management class of an enterprise such as support from manager or CEO.
2. Authorized project manager from CEO.
3. Studying out process and method of VA/VE to reduce problems when conducting VA/VE.
4. Establishing a VA/VE team with representative from all departments. 5. Becoming a model team and becoming learning model in company.
6. Knowledge management to reduce time wasting and promote efficient in company.
2.4.1 Developing of VA/VE
VA/VE can be traced back from World War Two, at that time, there were extremely lack of resource and made most of firms must to find some alternative raw materials, alternative production process. After using new way to produce, most firms found that the alternative methods having higher performance and also lower cost. Thus, some people started to do some research on this kind of methods to maintain same product function level and cost less. Here are some important milestones of VA/VE developing:
Table 2-2: Developing of VA/VE Time Name / Organization Applied Area
1947 Mr. Miles /GE company Analyzing cost and function and developing method of cost down called Value analysis. Applied on the process on purchasing electronic materials.
1954 US Department of Defense
31 1959 Society of American
Value Engineers(SAVE)
Established
1963 US Navy The first government unit which added provision of VA/VE in contracts.
1967 Senate Public Works Committee
Held Value engineering applied to government units of hearings
1970 Japan Established Society of Japan Value
Engineers(SJVE)
1974-1976 American Public Affairs Requests executive Value Engineering
1981 Council for Economic Planning And
Development in Taiwan
Published Value Engineering Method and Theory
1987 Department of rapid transit system of Taipei city government
Starting using VA/VE
2001 Value Management Institute of Taiwan
Established
Source: Bai (2004).
VA/VE can make sure how many programs and expected implementation of the results. And then is the core process of VA/VE, Function analysis. In function analysis process, definition of function and evaluation are the most important part.
In Taiwan, VA/VE can be applied in three fields which are Construction industry, manufacturing and Services.
1. Construction industry
Started from Council for Economic Planning and Development in Taiwan and the department of rapid transit system of Taipei city government got the first financial aid on conducting VA/VE.
2. Manufacturing
Most of Private companies conducted VA/VE because of the requesting from foreign partners. For example, Huffy Bicycle Co. from the USA asked Taiwan suppliers to conduct VA/VE since 1993.
3. Services
Taiwan Post Office also conducted VA/VE plan since 2002.The main purpose was popularizing VA/VE and lower the cost of post.
Therefore, we can realize that VA/VE method has already spread for a while and used wildly in different industries. According to the wildly used, we can also conduct the survey on the brand valuation and also conduct VA/VE on the research case company.
2.4.2 Calculating of VA/VE
In this study, the mainly use of VA/VE is its formula and steps to apply management advice. The basic formula of VA/VE is
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Functional coefficient will be calculated by customer questionnaire which means the marketing perspective and cost coefficient will be calculated from the real situation of a company which means financial perspective was also included.
From the result of calculating, the author can realize which construct of brand equity can obtain the best value (effect) to manage the brand.
Chapter Three Research Methodology
3.1 Research framework
Figure 3-1: Research framework
In the research, the author firstly used expert questionnaire to check the connection between brand equity constructs and marketing activities. And then sent the customer questionnaire to collect data to count the functional coefficient of every construct and also interviewed with an owner of McDonald’s franchise company to acquire the cost data. Then, use the formula of VA/VE, Value = Functional coefficient / Cost coefficient to calculate the value of every construct of brand equity.
Functional coefficient is by calculating the result of customer
questionnaire and that questionnaire mainly investigate the customers’ feeling toward the brand marketing activities. Thus, the result shows the effect of marketing activities and then the author can calculate the functional coefficient.
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In this research, functional coefficient is scores time weights. Scores were based on customer questionnaire which includes 19 questions also based on Aaker’s brand equity. Those questioned were the customer of case company and the questionnaire was sent by GOOGLE forms from5/19-5/23, 2016. The total questionnaire that author received were 224, and the effect questionnaire were 215. On the other hand, Weights were based on the constructs of Aaker’s brand equity model (brand loyalty, brand awareness, perceived quality, brand association) and given by 3 marketing experts and 2 professors via expert questionnaire. Thus, the result of these two numbers is the functional coefficient.
Cost coefficient was much more direct than functional one. The concept of cost coefficient is the percentages of marketing activities in all company’s marketing budget.
And calculating by the formula of VA/VE, V=F/C, then that is the value. And from the result, value, managers of company can realize which kind of marketing activities can lead to higher brand equity with less marketing budget. This research would develop a framework to measure the value of brand equity of companies and would take a company to verify the framework.
The author designed a customer questionnaire to understand the customer’s viewpoint toward the marketing effect of case company, then, according to the questionnaire result, the author could count the functional coefficient of VA/VE and interviewed an owner of McDonald’s franchises in Taiwan to count the cost coefficient of VA/VE
of brand equity.
3.2 Research design
In this section, the methods to collect data and calculating process will be mentioned.
3.2.1 Functional Coefficient
Functional Coefficient is based on Aaker’s brand equity model and composed by two different parts including scores from customer and weights from experts.
Before the questionnaire, the author will observe some marketing activities from seven international companies and collect data from their official websites and Facebook fan pages of these companies to design expert questionnaire and confirm the framework of VA/VE.
These seven brands are McDonald's, KFC, Starbucks, Coca-Cola, Pepsi, Sprite, and Nescafe which were chosen to be observed was because of the Interbrand’s best brand ranking in 2015 and the brand value of these seven brands are all in top 100 as table3-2.
Table 3-1: Brand ranking in 2015
Brand
Ranking
Coca-Cola 3
McDonald's 9
Pepsi 24
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Starbucks 67
KFC 75
Sprite 81
Source: Interbrand (2015)
The data that author would collect are marketing activities these companies held. The activities messages will public on the official website and Facebook fan pages and author will collect all the activities companies held from March, 2015 to March, 2016.As the Google trend showed, most of the research trend of these companies increased since March, 2015 and was getting higher month after month. Thus, the author chose this one-year period to observe the types of marketing activities and frequency of these enterprises.
After collecting marketing activities of these companies, the author could classify activities and design an expert questionnaire.
The expert questionnaire was to check the connection between brand equity constructs and marketing activities and each expert needed to write agree, disagree, revising and delete to decide the connection of two parts.
Table 3-2: Sample of expert questionnaire
Construct Marketing
activities
Agree Disagree Revising Delete
Brand loyalty Experimental marketing Cause related marketing Target marketing
Brand awareness Celebrity
marketing Advertisement marketing Event
marketing Internet-based marketing Perceived quality Crossover marketing Price promotion Brand association Moved marketing Sport marketing
The participants of this questionnaire are from two different kind of profession including marketing experts such as professors and experienced managers from industrial. Basic information of experts is as following table 3-4
Table 3-3: Information of experts
Name
Information
Years of jobs
Professor Lee Professor in NUK, department of APIBM
More than 25 years
Professor Chen
Professor in NKNU, department of Business Management
More than 7 years
Mr. Chen Jobs about marketing project and also is a management consultant
More than 7 years
Mrs. Hsu Owner of two franchise of McDonald’s More than 7 years
Mr. Yang Owner of two franchise of 7-11 and one restaurant
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From the expert questionnaire, the author could count the weight of per construct and check the relationship between equity constructs and marketing activities. The relationship between equity constructs and marketing activities will be mentioned next.
1. Scores (from customers)
Functional coefficient was needed other number to reach the result. That is Scores which was calculated from customer questionnaires.
The customer questionnaire was designed theoretical based on Aaker’s brand equity. There are 19 questions in this questionnaire and each question is connected to specific brand equity constructs.
After the questionnaire is completed, each item would be analyzed separately according to four constructs of brand equity. The calculating of score is as following including operation definition and counting process.
Operational definition
In the Likert scale, this research defined every score of agreement or disagreement as below:
○Extremely agree / Highly satisfied = 5 ○Agree/ Satisfied = 4
○Normal = 3
○Low agree / Dissatisfied = 2 ○Disagree / Highly dissatisfied = 1
Counting process:
1. Sum up all scores of every option of any construct.
2. The sum up of options times the weight of that option. For example, the number of strongly agree of one single construct the strongly agree score which is 5.
3. Sum up all of the number that already times the corresponding score called SUM.
4. Take SUM divided by the number of every activity. 5. Then, that number is exactly the function coefficient.
After author calculated both Weights and Scores, then author could time these numbers and that result was functional coefficient.
2. Weights (from experts)
Weight means the importance of every construct of brand equity to brand equity, the sum of weight was 1. The weights come from expert questionnaire which included 5 experts in this field. In expert questionnaire, not only weights will be determined but the marketing activities will be also checked with brand equity constructs.
Table 3-4 was sample of expert questionnaire and it was to ask for the weights of every construct of brand equity. The questionnaire is according to the importance of every construct toward brand equity. The most important construct will get 10 and the least one will get 1. The more relationship between brand equity and construct, the higher number that construct will receive. And the author would calculate the average number of experts’ response as the weight of every single construct.
Table 3-4: Sample of expert questionnaire
Brand
equity
Constructs Low related ← Importance → High related
Brand loyalty
1□ 2□ 3□ 4□ 5□ 6□ 7□ 8□ 9□ 10 □
Brand awareness1□ 2□ 3□ 4□ 5□ 6□ 7□ 8□ 9□ 10 □
Perceived quality1□ 2□ 3□ 4□ 5□ 6□ 7□ 8□ 9□ 10 □
41 Brand
association
1□ 2□ 3□ 4□ 5□ 6□ 7□ 8□ 9□ 10 □
From the expert questionnaire, the author could count the weight of per construct and count the functional coefficient.
3.2.2 Cost coefficient
Cost coefficient is the percentage of every brand equity construct to all marketing budget. In counting the cost coefficient, managers can calculate the total budget of their marketing activities and count each budget of brand equity construct individually to understand the cost coefficient.
In this research, the author took a franchise of McDonald’s to be the empirical study case and the cost data will be collected by an interview with an owner of McDonald’s franchise.
In figure3-2, it was just a pre-version, not the final version, to let reader understand how cost coefficient would be counted.
The main purpose of interview is to understand the proportion of marketing budget on every construct. And the result of proportion will be changed into cost coefficient.
Brand equity ( Total budget) Brand loyalty ( ___%) Perceived quality ( ___%) Brand awareness ( ___%) Brand association ( ___%)
Figure: 3.2 Cost coefficients
In the figure 3.2 cost coefficients, the percentage of every activity means the proportion of budget allocation. We will explain below step by step: Figure 3.2 will be answered by the owner of case company.
STEP 1 Total budget
Sum of total budget make us understand the real amount of money spent on the brand equity constructs and let us calculate the percentage of every single construct. The percentage of total budget is 100%.
STEP 2 Calculate every brand equity construct
Every single construct has their different budget of marketing activities. And any budget of construct can be divided by total sum of budget to get the percentage of that construct and that percentage is exactly the proportion cost of the construct.
3.3 Calculating method
In this part, we will discuss how to develop crucial part of VA/VE, function coefficients and cost coefficients. We will describe these two coefficients separated.
1. Function coefficients
In general companies, companies can use the customer questionnaire to acquire the functional coefficient .Companies can design their customer questionnaire based on the brand equity model of Aaker (refer to the appendix)
