Brand managers and academics agree that strong brand equity is a key to brand success. A recent study empirically links two prominent perspectives on brand equity across 270 brands in 24 categories:
- Consumer-based brand equity (CBBE) using scores from Young&Rubicam’s Brand Asset Valuator
- Sales-based brand equity (SBBE) which, based on 10 years of sales data, calculates the “extra” (positive or negative) sales a brand would generate if it employed the same marketing as the category on average.
Results show that
1) across a wide range of consumer packaged good brands a significant link between CBBE and SBBE exists for three out of the four CBBE dimensions (see figure 1) with brand knowledge being most closely associated.
2) different brand clusters exist. Performers are above average on CBBE and SBBE (e.g., Coke, Budweiser, Marlboro, Crest). Strugglers are low on both brand equity dimensions, Overachievers (e.g., Kellogg’s Special K, Diet Pepsi) have unexpectedly high SBBE given their CBBE scores, whereas Underachievers have unexpectedly low SBBE given their CBBE scores.
3) brands scoring high on relevance, esteem, and knowledge enjoy more favourable responses to price cuts and increasing distribution but lack strong advertising elasticity.
4) highly differentiated brands feature lower price and distribution sensitivity, but higher advertising sensitivity.
The study advises brand managers to monitor their efforts from both a sales- and a consumer-based equity perspective. The latter should also be able to capture multiple dimensions of CBBE given how differently they link to SBBE.
Source: Ailawadi, Kusum L & van Heerde, Harald J. (2015). Consumer-based and Sales-based brand equity: How well do they align?