Brand Measurement and Improvement - From Model to Execution

Author: Wang Haizhong
Publisher:
Publish Date: 2006-03-01
Features: Through consumer interviews, surveys, modeling, and validation of brands such as IBM, Dell, Lenovo, Pantene, and Sony, the author combines years of brand research and consulting experience to meticulously depict the brand landscape in the minds of Chinese consumers. Innovating on Keller and Aaker's authoritative brand models, the book provides a comprehensive, fresh, and in-depth analysis of the mysteries of brands in the Chinese market. It derives a brand power index system evaluated through consumer surveys and its predictive power on market returns. The author offers important advice to foreign and domestic brands marketing in China, such as adhering to quality, relying on "organization," strong "endorsement," fostering relationships, balancing visibility and reputation, and avoiding arrogance for the strong and cunning for the weak. This book represents the latest advancements in domestic brand theory and provides action guidelines for brand operations in the Chinese market. While Chinese enterprises have yet to complete brand professional management, some outstanding companies like and Lenovo have begun to expand globally by acquiring Western brands, establishing international brands. This has drawn attention from both academia and industry in China to brand internationalization, brand assets, and their measurement. From the perspective of brand asset management, this book proposes the integration of three major brand asset measurement models currently recognized in international marketing, based on their inherent logical relationships. It is suitable for students and faculty in relevant fields of higher education and for marketing professionals in enterprises.
[Preface]
Preface
Brands and Brand Equity: A Global Hot Topic
As a marketing activity, brand management has been practiced in the United States for over a century. By the mid-1980s, brands had garnered special attention from senior executives in European and American companies. Particularly around 1990, a series of brand mergers occurred worldwide, where acquired brands were sold for multiple times or even dozens of times their tangible asset values, convincing managers of the market power embedded in brands. Since then, scholars and marketing critics have explored numerous brand-related topics, producing a vast amount of papers, articles, research reports, or monographs. The Marketing Science Institute began funding brand research in 1988 and has consistently ranked it as a top-priority topic since 1991, with multiple placements in the top tier of priority funding, accumulating over 50 research reports to date. In the years following 1990, the Chinese market saw the emergence of numerous terms such as "trademark," "well-known brand," etc., including the selection of "China's Most Well-Known Brands," the China Brand magazine, and the China Trademark Association. The Chinese market welcomed a brand boom. However, at this time, brands were often reflected in tangible elements such as naming, logos, slogans, and packaging, meaning they mostly remained at the level of "small brands." Since 1995, brand functional management has strengthened, but brand marketing methods remain relatively singular (e.g., over-reliance on advertising or price promotions), with narrow objectives (e.g., solely pursuing sales volume). To this day, the vast majority of enterprises have yet to establish the concept of a "big brand," which involves endowing brands with specific personalities, building excellence in quality and reputation, market, and brand-customer relationships. Today, there are still many gaps in brand practice and academic research in China. In recent years, the "China factor" on the global stage has once again made brands a key issue of concern for the Chinese industry, academia, and even the political sphere.
At the enterprise level, domestic leading companies have adopted the approach of acquiring Western brands to shorten the timeline for establishing global brands (e.g., Lenovo, TCL,, China National Offshore Oil Corporation, and BenQ). Here, scientifically evaluating the value of acquired brands and effectively promoting their integration in culture and personality determines the success of this model for establishing global brands. Whether through self-accumulation or acquisition, Chinese enterprises must master "brand studies" to build global brands.
From the perspective of economic growth models, China's strategic transformation from an economic giant to an economic powerhouse, and from a resource-consuming economy to a resource-saving economy, requires enterprises to gradually move away from OEM (original equipment manufacturing) models and advocate for self-branded or independently developed brands; China must transition from the MIC (made in China) model to the BIC (brand in China) model. To cultivate Chinese brands, in addition to adhering to conventional brand principles, unique Chinese elements must be integrated.
From the national strategy level, the sustained competitiveness and reputation of Chinese enterprises in the global market depend on the support of the national image; China must stand tall in the world in all aspects, making "national brands" exceptionally important. Clearly, politicians should also possess brand thinking. Driven by this, brands have become our most significant area of academic interest and research. However, this book does not delve into the broad brand issues mentioned above. It takes the perspective of brand management, focusing on analyzing the conceptual structure of brand equity, constructing a measurement system, and examining the relationship between the consumer perspective and the product market performance perspective of brand equity models.
Book Positioning: Deciphering Chinese Brands with Scientific Methods
This book does not blindly adopt Western brand theories but strives to uncover the core of Chinese brands using internationally recognized scientific methods. It aims to achieve the following goals.
First, to scientifically and meticulously unravel the mysteries of brands in the Chinese market. Building on existing international and domestic brand research, this book employs a series of scientific methods to interpret Chinese brand mysteries. Specific methods include: using focus group techniques to distill brand core values from the thoughts and perceptions of Chinese consumers; collecting field data and applying quantitative analysis tools to validate hypothesis models. The author hopes that the brand principles derived from this book will closely reflect the essence of the Chinese market.
Second, to solve the universal laws of Chinese brands. This book tests the hypothesized brand model across three industries (daily necessities, durable goods, and IT), seven matched Chinese and foreign brands, and three economic zones to derive brand rules with broad applicability. The author hopes these rules can be applied to the entire Chinese market.
Third, to elevate data into brand action. This book aims to refine and elevate the findings from theoretical models into actionable insights for managers. Therefore, many conclusions in Chapter 6 can be applied to corporate brand practices to promote brand growth and development in the Chinese market. For example: company endorsement strategies; highlighting company capabilities to support product brands; establishing brand image with "facts"; etc.
Academic Contributions of This Book
This book seeks to make modest academic contributions to existing brand theory in three aspects.
First, to provide an insight into the unique brand mindset of Chinese consumers and depict their brand landscape. What does the term "brand" mean? Chinese consumers directly associate "brand" with the following elements: companies, particularly their strength, history, scale, and reputation; quality, especially quality or safety standards; face (social status); advertising or visibility. Based on 50 focus group interviews involving 20,000 words of consumer brand oral information from Beijing, Shanghai, and Guangzhou, the author hopes these original qualitative data will aid in Chinese brand academic research.
Second, in the conceptual composition of brand equity, the book identifies and validates certain factors distinct from Keller (1993) and Aaker (1991) models. Keller (1993) "Customer-Based Brand Equity" (CBBE) suggests that brand equity includes consumer awareness and associations with the brand. Aaker (1991) breaks down brand equity into four elements: brand awareness, perceived quality, brand associations, and brand loyalty. This book identifies and verifies two new elements of brand equity: company capability and brand resonance (beyond brand loyalty). Company capability, in particular, appears to be the cornerstone of strong brands in the Chinese market and warrants special attention from academia.
Third, in brand equity measurement, the book establishes and validates an integrated model that links consumer psychology to the product market. Scholars generally measure brand equity through three pathways: consumer/brand knowledge, product market output (or performance), and financial market output (or performance). However, these pathways are often viewed in isolation. From the perspective of brand management, this book treats the three pathways as three chains of brand asset construction: brand knowledge influences product market output, which in turn influences financial market output. The book constructs and tests the structural relationship model between the first and second stages. This means that brand equity measurement should leverage the strengths of each pathway to achieve different objectives. Keller and Lehmann (2002) encouraged this broader, integrated perspective on brand equity measurement.
Recommendations for Brand Practice
By interpreting consumer unstructured oral information and structured data, this book distills several recommendations for brand practice in the Chinese market.
First, quality is the core of the brand. Quality is the foundation of the brand-customer relationship; brands with high quality have greater success in brand extension; high-quality brands also have greater pricing flexibility, meaning price reductions can lead to increased sales, while price increases do not significantly reduce consumer patronage. Brand managers in the Chinese market should:
(1) Avoid product quality incidents. In the eyes of Chinese consumers, brands are not only used to indicate status but also to distinguish genuine from counterfeit products. Small enterprises without strong quality performance struggle to gain market acceptance; large companies, once involved in product incidents, face harder-to-recover negative repercussions.
(2) Use "facts" to prove quality. To mitigate risks, Chinese consumers are more inclined to trust large, established, and multinational brands. For small brands, even if product quality has improved, it takes longer to overcome consumers' preconceived brand or origin images. Small enterprises, new brands, and domestic brands must demonstrate quality "facts" to consumers to gain recognition despite inherent disadvantages.
Second, three steps in brand building.
(1) Company capability and brand visibility. When consumers strongly identify with a company's strength, scale, and size, product marketing becomes more effective. High brand visibility paves the way for quality recognition.
(2) Quality perception. While large or high-visibility brands naturally receive more consumer trust, if they fail to cherish this "privilege" by compromising on quality or acting arrogantly, they risk losing consumer loyalty, making it harder to regain than for small companies.
(3) Resonance between the brand and customers. The relationship between Chinese consumers and brands is pragmatic and emotionally understated, with fewer outward displays of obsession or fanaticism but higher purchase volumes, making it more substantial. Long-term management of the brand-customer relationship is essential.
Third, a brand asset measurement index system based on consumer surveys. It consists of four variables and 20 indicators: company capability (4 indicators), brand visibility (4 indicators), quality perception (6 indicators), and brand resonance (6 indicators). They respectively explain brand extension power (22%), price flexibility (62%), and repeat purchase intention (56%). Enterprises can consider how to dialectically apply these indicators to measure brand competitiveness in the market.
Fourth, prioritize the strategic position of company brands. Chinese consumers follow a "company → product" thinking logic. Company brand construction should precede product brand construction. Company brands can drive product sales and provide endorsement for product brands. A large and successful Chinese enterprise is more likely to establish leadership brand advantages in unrelated markets; without the backing of a well-known company, new brands struggle to gain consumer acceptance. "Procter & Gamble" understands this well; the success of its multi-brand strategy is backed by strong company brand endorsement. Domestic brands like and Shanghai Home Appliance may find insights here. Between company capability and corporate social responsibility as two attributes of brand companies, consumers prefer company capability (e.g., R&D, production, marketing). This does not diminish the importance of corporate social responsibility. Consumers infer a company's strength and capability from its social good deeds (sponsorships in healthcare, education, and sports, etc.). The elements of company capability include: company performance (e.g., history, revenue, growth rate, number of employees, and corporate activities), product technological innovation (e.g., leading technological trends, timely new product launches, and product series), and corporate international image (e.g., performance in Western markets and partners).