Download to read offline
More Related Content
![Mergers & Acquisitions [FA]](https://cdn.slidesharecdn.com/ss_thumbnails/mergers-acquisitions-v2-211205071658-thumbnail.jpg?width=640&height=640&fit=bounds)
Similar to Perceived Brand Equity: A Journey from Efficiency to Effectiveness
Perceived Brand Equity: A Journey from Efficiency to Effectiveness
- 1. Copyright © 2015by Prof. Dr. V. Charles Perceived Brand Equity: A Journey from Efficiency to Effectiveness Copyright © 2015 by Prof. Dr. V. Charles
- 2. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles In recent decades, brands have become comparable across the industries, based on their value derived either from the consumer/customer perception or in terms of the firm financials. There is always a trade-off between perception and financials, so as a trade-off between efficiency and effectiveness. Ever since the inception of brand values, these have become a benchmark for many data-driven strategies, eventually providing a basis for vertical/horizontal integrations, as well.
- 3. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Such an attempt allows the firm to create virtual brands, which provides room for benchmarking not only the existing brands, but also the virtual brands; this certainly provides an avenue to create new brands in virtue of virtual brands. The present research provides the scope to design frontiers for the brands from developed and emerging economies, as well as it substantially allows to compare brands under various frontier technologies of interest.
- 4. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Profit- seeker User-oriented, friendly The perception of brands is key to the development of the brand value. The image of a profit-seeking company affects the brand value in a bad way, whereas the user-oriented, friendly brand has a more appealing approach towards consumers. Brand perception
- 5. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles The recession gave consumers important lessons about consumption. The true value of goods. Are products really needful? What is the real satisfaction I get from products? Change in consumption habits
- 6. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles
- 7. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Advertising plays a vital role in promoting the brand; however, there are extreme and exceptional cases: for instance, on the one hand, Starbucks has hardly spent money on advertisement, while on the other hand, Disney has spent huge amount of money on advertisement.
- 8. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Data Envelopment Analysis (DEA) • DEA is widely known as a technique for the evaluation of efficiency. DEA is an extreme-point method and compares each decision-making unit (DMU) with the best DMU. No need of assumption on the functional form. Flexibility to incorporate multiple inputs and outputs. Works well with a small sample size. Advantages
- 9. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles 1 2 1 2 Let be the number of DMUs. Each DMU 1,2,..., consumes a vector of inputs, , ,..., to produce a vector of outputs, , ,..., , where T is transpose. We define the DMU to be eval j T j j j nj T j j j nj n j n x x x x y y y y 0uated as DMU . 0 1 1 1 0 1 . . 0, 1,2,..., , , 1,2,..., , 0, 0, 0, 1,2,..., ; 1,2,..., ; 1,2,..., . s s r i r i n r rj j r j n ij j r i j j r i Max s s s t y y s r s x s x i m s s j n r s i m DEA basic model This is an output- oriented CRS model. The efficiency of DMU0 is one over Phi .
- 10. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles FRH CRS FDH VRS , o o Y Y , X X , 0 .n Max 1.T e VRS 1, 0,1 . T FDH e 0 free, . T FR e H ¥ CRS, VRS, FDH, and FRH
- 11. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Brand Value Vs. Advertising Costs
- 12. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Developed countries
- 13. Copyright © 2015by Prof. Dr. V. Charles Axis
- 14. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Country: USA Abbreviation Brand AEX AMERICAN EXPRESS AMZ AMAZON APL APPLE ATT AT&T CCL COCA-COLA DSN DISNEY FCB FACEBOOK GET GENERAL ELECTRIC GOG GOOGLE IBM IBM MCD MCDONALD'S MLB MARLBORO MSF MICROSOFT MTC MASTERCARD NKE NIKE SBU STARBUCKS UPS UPS VIS VISA VZN VERIZON WMT WALMART WSF WELLS FARGO Abbreviation Brand Country SAP SAP Germany TMO T- MOBILE Germany TOY TOYOTA Japan VDN VODAFONE UK Developed Countries
- 15. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Abbreviation Brand Country FBC FACEBOOK USA MLB MARLBORO USA MCD MCDONALD´S USA VIS VISA USA APL APPLE USA IBM IBM USA Developed Countries FDH IBM and Visa have the same output level; however, still IBM can reduce its advertising cost by 5.2% without affecting its efficiency level.
- 16. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Developed Countries FRH Abbreviation Brand Country FBC FACEBOOK USA MLB MARLBORO USA MCD MCDONALD´S USA VIS VISA USA APL APPLE USA
- 17. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Developed Countries VRS Abbreviation Brand Country FBC FACEBOOK USA APL APPLE USA
- 18. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Input/Output orientation VRS Abbreviation Brand Country FBC FACEBOOK USA APL APPLE USA TOY TOYOTA JAPAN Decrease 40.1% Increase 20.9%
- 19. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Efficiency Efficient • We have cases such as Mastercard (MTC), which holds the 20th place in the Brand ranking; nevertheless, it has the 4th place in the efficiency ranking. • Another case is Facebook (FCB), which holds the 12th place in the Brand ranking; nevertheless, it is listed as efficient under every technology of interest. Inefficient • Microsoft, which holds the 3rd place in the Brand ranking, but holds the 12th place in the efficiency ranking.
- 20. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Legend FRH FDH VRS Developed Countries
- 21. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Emerging countries
- 22. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Abbreviation Brand Country ABB ALIBABA China AIT AIRTEL India BDU BAIDU China CMB CHINA MOBILE China HDF HDFC BANK India ICB ICBC China SBI STATE BANK OF INDIA India TNC TENCENT China Emerging Countries
- 23. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Abbreviation Brand Country HDF HDFC BANK India BDU BAIDU China ABB ALIBABA China TNC TENCENT China Emerging Countries FDH
- 24. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Abbreviation Brand Country HDF HDFC BANK India BDU BAIDU China ABB ALIBABA China TNC TENCENT China ICB ICBC China FDH Emerging Countries ICBC and Baidu have the same output level; however, ICBC can reduce its advertising cost by 43.84% without affecting its efficiency level.
- 25. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Emerging Countries FRH Abbreviation Brand Country HDF HDFC BANK India BDU BAIDU China ABB ALIBABA China
- 26. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Emerging Countries Abbreviation Brand Country HDF HDFC BANK India BDU BAIDU China TNC TENCENT China VRS
- 27. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles VRS Input/Output Orientation Abbreviation Brand Country HDF HDFC BANK India BDU BAIDU China TNC TENCENT China ICB ICBC China Decrease 43.85% Increase 6.43%
- 28. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Efficient The outstanding cases of Baidu and HDFC, which are ranked in the 21st place and 72nd place in the Brand ranking, respectively; nevertheless, they are efficient under every technology of interest. Inefficient China Mobile is ranked in the 15th place in the Brand ranking, nevertheless, it is ranked in the 21st place in the efficiency ranking. Efficiency
- 29. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Emerging Countries Legend FRH FDH VRS
- 30. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Developed & Emerging Countries
- 31. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Country: USA Type Brand D1 APPLE D2 GOOGLE D3 MICROSOFT D4 IBM D5 VISA D6 AT&T D7 VERIZON D8 COCA-COLA D9 MCDONALD'S D10 MARLBORO D11 FACEBOOK D12 AMAZON D13 WELLS FARGO D14 GENERAL ELECTRIC D15 UPS D16 DISNEY D17 MASTERCARD D20 AMERICAN EXPRESS D21 WALMART D23 NIKE D24 STARBUCKS Type Brand Country D18 VODAFONE UK D19 SAP Germany D22 T- MOBILE Germany D25 TOYOTA Japan Country: China Type Brand E1 TENCENT E2 ALIBABA E3 CHINA MOBILE E4 BAIDU E5 ICBC Country: India Type Brand E6 HDFC BANK E7 AIRTEL E8 STATE BANK OF INDIA Developed and Emerging Countries
- 32. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Type Brand Country E6 HDFC BANK India E4 BAIDU China D11 FACEBOOK USA D10 MARLBORO USA D9 MCDONALD'S USA D5 VISA USA D1 APPLE USA Developed and Emerging Countries FDH
- 33. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Input Orientation FDH Type Brand Country E6 HDFC BANK India E4 BAIDU China D11 FACEBOOK USA D10 MARLBORO USA D9 MCDONALD'S USA D5 VISA USA D1 APPLE USA E1 TENCENT China
- 34. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Output Orientation FDH Type Brand Country E6 HDFC BANK India E4 BAIDU China D11 FACEBOOK USA D10 MARLBORO USA D9 MCDONALD'S USA D5 VISA USA D1 APPLE USA E2 TENCENT China D13 WELLS FARGO USA D15 UPS USA
- 35. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Developed and Emerging Countries FRH Type Brand Country E6 HDFC BANK India E4 BAIDU China D11 FACEBOOK USA D10 MARLBORO USA D9 MCDONALD'S USA
- 36. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Input Orientation FRH Type Brand Country E6 HDFC BANK India E4 BAIDU China D11 FACEBOOK USA D10 MARLBORO USA D9 MCDONALD'S USA E7 AIRTEL India E8 STATE BANK OF INDIA India
- 37. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Output Orientation FRH Type Brand Country E6 HDFC BANK India E4 BAIDU China D11 FACEBOOK USA D10 MARLBORO USA D9 MCDONALD'S USA E7 AIRTEL India E8 STATE BANK OF INDIA India
- 38. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Type Brand Country E6 HDFC BANK India E4 BAIDU China D11 FACEBOOK USA D1 APPLE USA Developed and Emerging Countries VRS
- 39. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Input/Output Orientation Type Brand Country E6 HDFC BANK India E4 BAIDU China D11 FACEBOOK USA D1 APPLE USA D10 MARLBORO USA VRSMarlboro (D10) can reduce its advertising costs by 15.85% or increase its output level by 4.87% to become efficient.
- 40. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Developed and Emerging Countries Legend FRH FDH VRS
- 41. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 APPLE FACEBOOK BAIDU HDFCBANK MARLBORO MASTERCARD GOOGLE VISA MCDONALD'S IBM ALIBABA MICROSOFT STARBUCKS TENCENT WELLSFARGO AIRTEL STATEBANKOFINDIA UPS VERIZON AT&T COCA-COLA GENERALELECTRIC AMAZON AMERICANEXPRESS ICBC T-MOBILE CHINAMOBILE SAP DISNEY WALMART VODAFONE NIKE TOYOTA Efficiency ranking - Input-oriented Efficient Inefficient Developed Emerging
- 42. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Developed & Emerging Countries (VRS) Developed VRS frontier Emerging VRS frontier
- 43. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles High Low Low High Efficiency vs. Effectiveness
- 44. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles Low Low Type Brand Country D6 AT&T USA D8 COCA-COLA USA D16 DISNEY USA D18 VODAFONE UK D19 SAP Germany D22 T- MOBILE Germany D23 NIKE USA Low efficiency and low effectiveness
- 45. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles High Low Type Brand Country D7 VERIZON USA D14 GENERAL ELECTRIC USA D15 UPS USA D20 AMERICAN EXPRESS USA D21 WALMART USA D25 TOYOTA Japan E3 CHINA MOBILE China E5 ICBC China E8 STATE BANK OF INDIA India Low efficiency and high effectiveness
- 46. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles High High Type Brand Country D1 APPLE USA D2 GOOGLE USA D3 MICROSOFT USA D4 IBM USA D5 VISA USA D9 MCDONALD'S USA D10 MARLBORO USA D11 FACEBOOK USA D13 WELLS FARGO USA D17 MASTERCARD USA D24 STARBUCKS USA E1 TENCENT China E2 ALIBABA China E4 BAIDU China E6 HDFC BANK India E7 AIRTEL India High efficiency and high effectiveness
- 47. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles The present research provides the scope to design frontiers for the brands from developed and emerging economies, as well as it substantially allows to compare brands under various frontier technologies of interest. Advertising plays a vital role in promoting the brand… but how much money should be spent on advertising? Or, otherwise stated, how much can we cut down on advertising costs without affecting the efficiency of the brand? Takeaways
- 48. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles For example: 1. Developed countries: We have the outstanding case of Facebook, which holds the 12th place in the Brand ranking; nevertheless, it is listed as efficient under every technology of interest. 2. Developing countries: We have the outstanding case of HDFC Bank, which is ranked in the 72nd place in the Brand ranking; nevertheless, it is efficient under every technology of interest. The analysis shows that the brand value ranking of the brands differs significantly from the efficiency ranking under different technologies of interest. Takeaways…
- 49. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles It is to be noted that the brands from developed countries which are inefficient are furthermore inefficient even under the emerging countries frontier! Apple and Facebook (Developed Countries) and Baidu and HDFC Bank (Emerging Countries) are efficient under every technology of interest and represent the peers for the rest of the brands analysed. Takeaways…
- 50. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles 1. A substantial number of brands can be found with higher effectiveness. 2. 50% of the selected sample is sustaining with higher efficiency and higher effectiveness. The brands have been classified into four quadrants, based on their efficiency and effectiveness: Takeaways…
- 51. Copyright © 2015by Prof. Dr. V. CharlesCopyright © 2015 by Prof. Dr. V. Charles © reserved to Prof. Charles Vincent, PhD, PDRF THANK YOU Perseverance, Persistence: Thomas Edison Quote Nearly every man who develops an idea works at it up to the point where it looks impossible, and then gets discouraged. That's not the place to become discouraged.
Editor's Notes
- #7 Some of the brands which have higher brand value from both developed countries and emerging countries….
- #10 CRS – Constant returns to scale.
- #11 VRS – Variable returns to scale. FDH – Free disposability hull. FRH – Free replicability hull.
- #17 FCB, MLB, MCD, VIS, and APL are FRH efficient.
- #18 FCB and APL are VRS efficient.
- #20 Inefficiency means spending too much on advertisement when other firms achieve what you do with less resources.
- #21 FCB and APL are VRS, FDH, and FRH efficient. MLB, MCD, and VIS are FDH and FRH efficient, but not VRS efficient.
- #24 HDF, BDU, ABB, and TNC are FDH efficient.
- #25 IBM and Visa have same output level, however, still IBM can reduce 5.2% of advertising cost without affecting its efficiency level.
- #26 HDF, BDU, and ABB are FRH efficient.
- #27 HDF, BDU, and TNC are VRS efficient.
- #30 HDF, BDU, ABB, and TNC are VRS and FDH efficient. TNC is not FRH efficient, but HDFC, BDU and ABB are.
- #33 E6, E4, D11, D10, D9, D5, D1 are FDH efficient.
- #34 D10 is a peer for E1 [reduce input].
- #35 D10 is a peer for E2, D13, and D15 [increase output].
- #36 E6, E4, D11, D10, and D9 are FRH efficient.
- #37 E6 is the peer for E7 and E8 [Reduce Input].
- #38 E4 is the peer for E7 and E8 [Increase output].
- #39 E6, E4, D11, D1 are VRS efficient.
- #41 E4, E6, D11, and D1 are FRH, FDH, and VRS efficient. D10 is FRH and FDH efficient. D9 is FRH efficient, but not VRS or FDH efficient, while D5 is FDH efficient, but not VRS or FRH efficient.
- #43 Two frontiers: one for developed and another one for emerging countries. Note: LIKE D15, D13, D12, D14, … brands from developed countries are inefficient even under the emerging countries frontier…. E6 and E4 are far better off when compared to the developed countries frontier….
- #44 Effectiveness is measured as the log(net utilities/advertising costs). Efficiency is measured as in VRS efficiency.
- #51 50% of the sample are enjoying their higher profit with higher brand value.