Brand awareness is the recognition of a specific brand name or logo, along with the traits associated with this brand.
The number of people who know about the brand
Frequency of leaping to peoples mind the brand name.
Prestigious brand names help increasing sales .
Brand awareness is intangible asset of companies.
Monopoly market model – when only the brand market share has impact on its awareness.
Advertising effort that influences the unaware segment of the market.
Word-of-mouth effect – we can see it when people who know about brand influence on the unaware market segment and tend rise in the brand awareness.
Forgetting effect – when people forget about brand, that tend loss of awareness.
- Ignoring the role of competition - sparse empirical knowledge of advertising effectiveness in building awareness for mature products - lack of guidelines to the optional strategies - no information about competitors awareness and strategies Bad Sides of Old Models:
Oligopoly Markets Model
N-brands that share one market .
All effects that old models include .
“ confusion effect” – when competitor’s advertising might increase the awareness of own brand. This effect can have positive or negative influence.
Also model includes all positive and negative effects that brand can gain from competitor’s advertising, like from comparative advertisement.
Allow the total awareness of selected N-brands to vary over time. As if a segment that is unaware of all brands, which are included in model, exists in the market.
Oligopoly markets model
Fiat Punto Opel Corsa Ford Fiesta Peugeot 206 Renault Clio Model Estimation: - Tracking data. First of all you need to take phone interviews to calculate awareness data of each brand. At the end of this process we gain 83 weeks of awareness data for each of the five brands - Use mathematical approaches to estimate model to gathered data
Now by looking on graphic we can say that our model fits the sample data and also exhibits strong predictive performance
We can find the optimal amount of money that should be invested in media ad. This optimal strategy gives the best return in terms of gaining more awareness points for less money spending on ads.
Inverse allocation principle : the greater (smaller) awareness level, the smaller (greater) advertisement spending.
Managers should build dominant brands because they would face less competitive resistance and afford to advertiser more efficiently in the long run
We can calculate exact share of market for each brand in th equilibrium state.
We can prove on our model the proposition that in mature markets the category ad spending increases as the number of brands increases.
We can count that mature product category can sustain three or more brands.
Also we reveal that managers can reduce the category size to three brands by increasing ad effectiveness.
- Managers can use this model to assess ad effectiveness and predict competitors awareness - We build model of brand awareness in dynamic oligopoly markets - We build optimal strategy - We can predict the equilibrium market state - We reveal inverse allocation principle REVIEW:
Presentation based on article: “ Building Brand Awareness in Dynamic Oligopoly Markets” Authors: Prasad A.Naik, [email_address] Ashutosh Prasad, [email_address] Suresh P.Sethi, [email_address] Made by Ivan Petrov, firstname.lastname@example.org