Brand Asset Valuator or BAV is a tool in which we evaluate the strength of a brand. BAV enables us to do the value measurement of different aspects of businesses and their activities. It's a very powerful valuation tool but is commonly ignored by many. The article below will give you all the information on what BAV is, how it works, and how it can benefit your business in the long term.
Brand Asset Valuator- abbreviated as BAV, is a measure to evaluate the strength and stature of a brand. In short, it is a tool designed by experts (Young and Rubicam Agency) to measure the value of an entity. It is an important metric that measures how well a business has established and marketed its brand.
It must be mentioned here that Brand Asset Valuator (BAV) is not a measure of the success or failure of branding efforts but it is a great way to measure some of the more important factors while determining the strengths and weaknesses of a brand.
There are 2 broad categories under which BAV measures a brand.
BRAND VITALITY- It determines how much potential the brand has for growth today and in the future.
BRAND STATURE- This tells us the power of a brand and its current value.
The 4 pillars of Brand Asset Valuator are:
Differentiation is the ability of a brand to stand out from its competitors. Differentiation consists of the following three components.
Difference- refers to how the brand's products are different from its competitors.
Unique- refers to the brand's excellence and captures its soul. It has more to do with the brand's reputation, authenticity, and uniqueness of the concept.
Distinctive- refers to the worthiness of a brand.
It determines the real and perceived significance of a brand in the eyes of the big consumer market segment referred to as relevance. This factor is used to evaluate a given brand's potential in relation to the customer's necessities.
This refers to the respect a brand has earned from customers as a result of its previous performance in terms of service and reliability.
It refers to the brand awareness in the mind of the customers. It is important for building a brand and conveying what the brand actually stands for and its implicit message to the consumers.
Using the BAV model, we can determine brand strength and stature by measuring how differentiation, relevance, esteem, and knowledge are related to one another.
Relationship between 4 pillars of Brand Asset Valuator (BAV) model.
1- When Differentiation is greater than Relevance.
If Differentiation is higher than Relevance in the market, then the brand stands out and is recognized. Customers want to know why the brand is different. This means that customers will be attracted to the brand and will investigate it to see if it has the features they need or not.
Examples: Tesla and American Express
2- When Relevance is greater than Differentiation.
A brand that is interchangeable with other brands means it is relevant in the lives of consumers, but it can also be used interchangeably with other brands which fall into the same category. Customers will only purchase the product when it is cheap and convenient.
Example- Pepsi, Coca-Cola, Visa, and MasterCard.
3- When Esteem is greater than Knowledge.
This shows us that after the brand was introduced to the markets, customers found the brand appealing and were eager to know more about the same, indicating exceptional growth potential.
Example- Instagram, Tesla, and Harley-Davidson Motor Company
4- When knowledge is greater than Esteem.
When knowledge of a brand is greater than esteem then a negative view of a brand is created which leads to poor results, including poorer sales. Consumers who believe they already know a lot about a brand, won't think they need to learn anything else about it, so the target audience will be less likely to buy from the brand.
Example- Facebook, Blackberry, and Nokia
The Power Grid
The power grid is a representation of stages of a brand during its life cycle which is shown in quadrants. Brands are plotted in two coordinates based on Stature and Strength. The two coordinates capture the relationship of the four brand pillars discussed above.
Quadrant I: NEW OR UNFOCUSED
Brands that are weak and have not been able to take the advantage of their strengths come in Quadrant l. In this quadrant brands generally emerge, struggling to create differentiation and establish their reason for being.
To move forward brands need to differentiate themselves from their competitors. The movement from there tends to move upwards to the left-hand quadrant.
Quadrant II: NICHE OR UNREALIZED
This quadrant shows brands with distinct differentiation and is becoming more Relevant. It appears that new potential competitors could emerge from the upper right quadrant, based on the leading brands in that area.
In this case, the top authorities have failed to discover the brand's true potential. The strategy should be to build the stature of the brand.
Quadrant lll: MOMENTUM LEADERSHIP
This Quadrant has two types of brands:
In this quadrant all four pillars of the brand are high. Leading brands are those companies that have both a high level of Brand Strength and Brand Stature. In this quadrant you will find both old and new brands, meaning that it is based on four pillars and is not affected by the lifespan of the brand. Brands can become and remain leaders for as long as they are properly managed.
Examples of new brands: Google, Amazon, and OnePlus.
Examples of old brands: Gillette, Mercedes-Benz, and Levi's.
2- Mass Market
These brands score high on three pillars except for the pillar of differentiation. They earn well but the potential for further growth seems to decline. When a brand's Strength falls below its Stature, it is deemed weak.
Example: Facebook, Yahoo, and Snapchat.
Quadrant lV: ERODED
The last quadrant represents a danger for the brand, perhaps a sign of erosion. These brands are unable to maintain their relevance and differentiation i.e. strength and stature. These brands are no longer able to compete with the existing competitors but also that they are vulnerable to discounted price brands.
Example: Nokia and Blackberry.
The Brand Asset Valuator (BAV) is a method of assessing the value of an individual brand. The BAV attempts to determine an individual customer's degree of loyalty and how likely an individual is to recommend a brand to someone else. The benefits of a BAV analysis are numerous. For manufacturers, an accurate BAV analysis can provide a highly specific target market. It involves a number of questions and uses standardized responses. The more positive responses, the greater the asset value.
By analyzing the environment and adopting an appropriate plan, businesses may develop their brand policy and improve in the future.
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