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Various measures to assess the performance of a brand on the dimensions of esteem and knowledge. It covers customer loyalty, price premium, positioning understanding, and referral index. These measures help brands maintain their position, preempt damages, and consolidate their strategies.
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Lesson 40 BRAND DYNAMICS Introduction With the understanding of measures on the first two dimensions, that is, differentiation and relevance, this lecture continues with the discussion on measures of variants of the remaining two dimensions, esteem and knowledge^1. On the dimension of esteem Customer loyalty: This shows how consistent customers are in buying your brand, how long they have been buying and how long they may buy? This measure should tell you the number of customers that you would have lost had you not had the branding strategies. This also tells you that the customers who did not leave your brand are loyal customers. You ask your customers what other brands they considered before finally deciding to stick to your brand. You can find out the competitive brands that entered your customers’ decision-set. The next question should clarify why they stuck to your brand after considering competition and then discarding it. You will get yet another testimony to your product’s quality and branding strategies. Price premium/Financial brand value: This shows you why your customers are willing to pay you a premium over your competitors or a price that offers you good, attractive margin. This also is an important measure in determining the right price premium for your brand. You compare the price of your brand with your immediate competition and determine to what extent you can further go up in price, thus following the market-based pricing mechanism. The measure gives you insights into
constraint for you. If, however, the right positioning is taking hold, then you will be free of that constraint and can charge a premium or a price that offers a high level of margin. There is a straight line relationship between quality perception and premium pricing. Perception of high quality and taste will also enable you to make your customers stick to your brand and attract new customers through referrals. In short, a complete understanding on part of the customers about your brand’s inner core and character testifies that your position is well understood by them. Referral index: It pinpoints the potential to create new business/customers owing to referrals by satisfied and loyal customers on the basis of their knowledge of the brand. The importance of measures The importance of such measures comes to the surface under two sets of circumstances: