The document discusses various methods for assessing brand equity from a marketing perspective. It analyzes approaches such as Aaker's brand equity model involving differentiation, loyalty, perceived quality, and other attributes. Another approach discussed is Young & Rubicam's Brand Asset Valuator technique which measures differentiation, relevance, esteem, and knowledge. The document also examines Moran's model using effective market share, relative price, and durability, as well as Interbrand's brand valuation model. The conclusion is that each method has strengths and weaknesses, so it is best to use multiple approaches to ensure accurate brand assessment.

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Title: Brand Value and Equity. Analysis of the most popular and appropriate methods of
assessing Brand Equity from marketing view.
The importance of the brand in the performance of the company is hard to under-evaluate
nowadays. Kotler (2003) notes that brand is the most important assets for many companies and
quotes the words of Coca-Cola's CEO who suggested that the company's value would not be
seriously affected by the demolition of all the factories and facilities, since their main assets if
their goodwill and the collective knowledge they posses.
Wood (2000), Brassington and Pettit (2003), and later Business Dictionary (2011) define brand
as the combination of the symbols, words, and signs used in order to create the image that helps
differentiate the products from competitors via exact identifications and association with a
certain level of quality and benefits provided, in addition to the association with the sum of the
previous experience and satisfaction as the result of using these products.
Wood (2000) and Krishnan et. al. (2001), note that the measurement of the relationship
between the customers and brands resulted in the arousal of the term “brand equity”. However,
Grannell (2010) warns about the possible confusion between brand equity and brand value,
since they are inter-related concepts and often have same causes for variation. He notes that, for
example, the growth of the sales in some of the cases increases the value but decreasing the
brand equity. But, he notes the works of Keller (2008) and Raggio and Leone (2007) who
suggest that the analysis of both brand equity and brand, and how they are measured and
managed, helps comprehend the role of brand as one of the most important asses. The term
“brand equity” as itself, is considered to be rather broad, and definition of this term varies
greatly, from author, to author, but for marketing area, apart from pure accounting, it is mainly
considered as the measurement of the difference between possible sales and company strengths
with the brand and without, with other variables, such as facilities and technological
development remaining the same (Leuthesser et. al. 1995, Wood 2000, Keller 2003, Grannell
2010).
After the comprehensive analysis of the range of articles published in the Journal of Marketing
Research during the period of 1980s and 1990s, Malhotra et. al. (1999) suggests that the
analysis and evaluation of brand equity becomes an integral part of any analysis related to the
company. The reason here is that the capital is not considered as a serious constraint for
business now, since the costs of physical assets is permanently decreasing since the middle of

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20th century, and now the point of differentiation generally comes from intangible assets and
marketing efforts (Domingo 2001). This lead to the requirement of proper evaluation of
productivity of the spending on marketing, and therefore concise brand equity evaluation can
be used for this purpose, as Sheth and Sisoda (2000) suggest.
Abratt and Bick (2002) make a comprehensive analysis of the wide range of the approaches to
measuring brand value and brand equity and suggest that properly channeled information
resulted from correct evaluation can influence the level of spending on marketing, evaluate the
performance of marketing managers, and can be a starting point for success building or
rebuilding the existing brand.
They also suggest that all the methods of brand valuation can be separated into 5 groups:
1. Cost-based approaches - determining the costs related to creation of the brand or replacing
(Keller 2008);
2. Market-based approaches - evaluation of the costs of replacing the assets in case their
demolition (Keller 2008);
3. Economic use or income-based approaches - forecasting the future net earnings related to
brand;
4. Formulary approaches - revising multiple mainly qualitative criteria to evaluate brand;
5. Special situation approaches.
Abratt and Bick (2002) suggest that there are numerous of the methods which can be attributed
to one of these groups, so they suggest implementation of the most reliable and popular. Taking
this into account, it is important to find out and give insights into the most prominent
approaches to brand valuation.
One of the easiest way to determine the Brand Equity is determining company's Goodwill value
(price above tangible assets), as Seetharaman et.al. (2004) and Tollington (1999) suggest.
However Tollington (1998) notes that in many cases the brand assessment according to
goodwill can be misleading, therefore suggesting the implementation of other approaches to
assess brand equity, apart from accounting ways for assessing.
Taking into account the previous statement, Aaker (1996) makes a very comprehensive
research on the possible ways of measuring the brand equity across the products and markets
and suggests an easy yet comprehensive approach to assessing the strength of the brand equity.
The reasons here is that he analyzed the implementation of every possible criteria from four

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prospects of the brand value: reflecting the brand value advantage that cannot be easily
duplicated by competitors, being truly associated with the sales and profit, reflecting the
changes in market and uncovering current problems, and being easily applicable across brands,
product categories, and markets (Aaker 1996, Bick 2003).
So he suggested analyzing the strength of differentiation, loyalty, perceived quality, leadership
or popularity, perceived value, brand personality, organizational associations, brand awareness,
market share and market price, in addition to distribution coverage in order to evaluate the
overall strength of the brand. However, Aaker suggests that it is not appropriate and reasonable
to use a mathematical model and weight all the attributes or combine all the aspects into the
overall score, because the weighting varies from brand to brand and within different markets
and categories, and therefore using quantitative measures can be misleading for the
management. Instead, University of Virginia (2002) suggest that while implementing Aaker's
approach, each of the attributes should be considered separately, and then the final conclusion
on overall brand equity can be suggested. But University of Virginia notes that the results of

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the assessment according to Aaker's approach are often vague and often cannot be used as the
basis of suggesting and proving the changes in the field of brand management.
One of the prospective approaches to evaluate the brand equity is the Brand Asset Valuator
technique developed by Young & Rubicam, as Mett (2011) suggest. This technique is consisted
of surveying consumers and therefore measuring the four following dimensions: differentiation,
as an ability of the brand to distinct from competitors, relevance – the level of appropriateness
and closeness of ties to the targeted market, esteem – consumers’ perceived quality and respect
of the brand, and knowledge – consumers' awareness of the brand and its main features (de
Mortanges and van Riel 2003, Mett 2011).
Value Basement Management (2010) also notes that differentiation and relevance are aiding in
measuring the growth potential, or, in other words, Brand Vitality, while esteem and
knowledge are considered to be the part of Brand Stature, which determines the current power
of a brand.
Brand Asset Valuator is proved to be a good tool for managing the brand in a long-term period,
since it give insights to consumer behavior, and future prospects of the products and potential
for brand enhancement (Watson C, 2010). On the other hand, the results of the evaluations
using BAV are usually very abstract and cannot be measured in solid quantitative terms, in
addition to the fact that this is the proprietary tool of Young & Rubicam and can be fully
implemented only by this organization (Scribd, 2011).
On the contrary, Moran (1994) suggests an alternative and freely accessed quantitative
measurement in assessing brand equity, which consists of measuring the products using three

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factors: effective market share, showing the weighted average of the brand’s market share in all
the segments at which it aims, relative price, representing the difference between the branded
product's prices and average price of the comparable goods in the same market, and durability,
which is showing the index of expected repeat customers to total customers of the branded
products.
So, Economy Watch (2010) proposes the simple representation of the formula suggested by
Moran (1994):
Brand Equity (I) = Effective Market Share (%) * Relative Price * Durability (Loyalty Index)
(I).
But, despite of the simplicity, Moran’s approach can be sometimes misleading, since it does not
take into account the profits related to the brand equity. In the view of this fact, it is important
to suggest another quantitative approach of brand equity assessment, which is Interbrand's
Brand Valuation Model, which is well-known because of the annual study on the Most
Valuable Brands, which is now known as Best Global Brands and considered to be as rather
precise by many specialists (Interbrand, 2011a). According to the methodology of the
assessment, the separation of tangible product value from intangible brand value is done and
then evaluated (Interbrand, 2011b):
So, after all these procedures are done, the growth and discount rates are calculating the final
brand value.
Another considerably simple quantitative analysis of brand value is marketing conjoint
analysis, as Green and Srinivasan (1990) notes. Quaticts (2010) suggests that it can include
brand and price as the several one or several attributes in this field in addition to the brand
value for consideration, and after enough scenarios are taken into considerations it is possible

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to determine the price the consumers are ready to pay for a particular brand, it also notes that
this method is useful in conjoint with other methods of brand valuation.
In conclusion, it was found out that nowadays the performance of the company is directly
related to the strength of the brand. Thus, the proper management and consequently proper
brand equity assessment is required for modern marketing managers. Taking into account that
there is a range of the techniques of assessing the brand equity using accounting methods, this
literature review was aimed on other, mainly marketing-related methods. However, it was
found out that there is plenty of marketing-related techniques too. Therefore, the most popular
and well-known approaches were studied, including Aaker's, Young & Rubicam's, Moran's,
and Interbrand's methods of assessing the brand equity. It was also proved that every of the
methods has their pros and cons, so they should carefully chosen for the implementation and
also used together to ensure the correct brand evaluation.

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