MARKET RESEARCH: The art of perception

Brand equity research gives a full picture of a brand’s health by measuring its perceived quality. Mercedes-Benz tops this year’s league. Karen Dempsey reports

Brand equity research gives a full picture of a brand’s health by

measuring its perceived quality. Mercedes-Benz tops this year’s league.

Karen Dempsey reports



A brand’s performance is not measured by sales alone, for this does not

take into account the brand’s image, heritage and perception.



Brand equity research, where a brand’s size is measured not just by

sales but also by its ‘perceived quality’, is big business in the US.

The technique is catching on in the UK and could soon become a benchmark

for measuring a brand’s success.



This is the second year that international market research company Total

Research has conducted its EquiTrend survey in the UK, and Marketing has

exclusive access to the results.



Research was carried out among 163 brands which were ranked by more than

a thousand respondents. Perceived quality - the average quality rating

among those who had an opinion on a brand - was measured using an 11-

point scale from outstanding to unacceptable. But just to make it fair,

people only rated brands on which they held a view. This is the salience

factor in the tables, representing more than just awareness of the brand

name.



Total Research



As Total Research’s marketing director, David Dower, explains: ‘We are

not measuring the market presence, but the perception of the quality of

the brands. It is an indication of a brand’s health. The higher the

perceived quality of a brand, the more likely it is to be short-listed

and bought.



‘High perceived quality means people will be less influenced by the

presence of a salesman or point-of-sale material, or even by lack of

availability. The higher the regard for those brands, the more likely

they are to be purchased.’



David A Aaker in his book Building Strong Brands, says that perceived

quality is an asset for any brand. ‘It is often a major, if not the

principal, strategic thrust of a business. Perceived quality is linked

to, and often drives, other aspects of how a brand is perceived,’ he

says.



But Total Research does not look at perceived quality in isolation. It

has identified a correlation between perceived quality and sales

performance. For example, a brand scoring 8 on the scale is twice as

likely to be bought than a brand scoring 5.



A perceived higher quality is more likely to sustain a premium price. If

the price is increased by 15%, a brand with a perceived quality score of

7 is likely to lose twice as much business as a brand scoring 8.5.



There is also much more recognition of brands in the boardroom, and

Total Research has found a correlation between Stock Market performance

and the perceived quality of a brand.



Dower says: ‘Although this is a robust method of looking at a brand’s

health, it does not give diagnostics.’



The research can give rankings but it cannot explain the reasons behind

a brand’s success.



In this year’s survey, nine out of the top ten companies hold the same

position as last year (Marketing, June 22 1995). Mercedes-Benz and BMW

were once again ranked the top two brands in the UK, beating a rising

DisneyWorld Florida, which, as one of the youngest brands, has quite a

low salience but a high perceived quality.



Cadbury’s Dairy Milk, which was not measured last year, hit the top ten

in fifth position. But missing from the top 40 are retail brands, which

are no longer part of the survey. Total Research carried out a separate

quality survey on high-street and shopping centres. Other significant

movements in the top 10 were the rise of Duracell from ninth to fourth

and the fall of Lego from third to eighth.



‘EquiTrend has demonstrated that hard-won brand equity can be

maintained. The perceived quality of top brands has been carefully

managed over time. Their brand images are consistent and it is difficult

for other brands to overtake them,’ says Dower.



Outside the top 10 a major climber up the brand rankings is BT, which

jumped from 71st position to equal 23rd. Dower says: ‘It is significant

that an established brand has done so well. It has responded to the

competitive environment with imaginative schemes. BT has sustained

advertising and good promotions that have impacted on people’s pockets.’



Grand Prix



The BT ‘It’s good to talk’ campaign with Bob Hoskins was also regarded

as successful by the advertising industry and this month won the Grand

Prix award at the IPA Advertising Effectiveness Awards (Marketing,

November 14).



Other phone services came much further down the rankings. The closest

contender was Orange which was measured for the first time. It came in

at 101, followed by Cellnet at 110, Vodafone at 120 and Mercury One-2

One at 127.



Among users, however, EquiTrend says Orange had the highest perceived

quality of all service providers, even ahead of BT.



The biggest climber in the survey overall was Umbro, moving from 152 to

77. And in fact, perceived quality has gone up for all sports goods

brands compared with last year. This could have a lot to do with the

Euro ’96 football championship which raised the profile of sport and its

associated brands, and consequently gave them a lot more exposure than

last year.



In the running



Reebok has maintained its leadership over the sports goods brands in the

UK, but only just. It was again ranked 16th, but hot on its heels was

Nike at number 17, moving up from 36th place last year. Adidas also had

a strong performance, moving up from 43rd to 22nd.



‘Interestingly, campaigns during both Euro ’96 and the Olympics added to

the Nike success story, despite the fact that the company was not an

official sponsor of either event,’ says Dower.



This result was supported by research earlier this year from BMRB

International, showing that one in four people thought Nike was an

official sponsor of Euro ’96.



What may come as a surprise to some is the performance of colas and soft

drinks brands in this survey. Coca-Cola is still the clear leader in

this sector, but it still did not make the top 40. It moved up three

places from 48 to 45, but this is in contrast to AC Neilsen’s biggest

brands survey based on sales performance, in which Coca- Cola came top.



Rival Pepsi-Cola, however, came in 40 places behind Coca-Cola. It

improved its ranking from 101 last year, but it is still considerably

behind its main rival. ‘The 1996 results indicate that Pepsi-Cola’s

pounds 330m spend on its Project Blue relaunch has not really worked in

shifting perceptions other than to maintain its position against its

arch rival,’ says Dower.



Other soft drinks brands measured for the first time - Tango, Lilt and

Irn Bru - were all ranked outside the top 100. However, EquiTrend

highlighted a high degree of loyalty among Irn Bru drinkers as it

received the highest perceived quality ranking among users.



Instant coffee brands were measured for the first time this year, with

Nescafe coming at the top of the sector. It finished in 19th position,

ahead of Gold Blend in 61st and Kenco in 82nd. However, among users

Kenco had the highest perceived quality of all the instant coffee brands

measured.



Two toy brands appear in the top 10 for the second year running - Lego

and Fisher Price - although they have slipped down the rankings and

Fisher Price has overtaken Lego to become the top UK toy brand. Duplo

took third place with a significant drop from 17th to equal 35th.



Insurance companies did not rank very highly in the survey. Motor

insurance companies were surveyed for the first time this year and their

performance was far from sparkling.



Direct Line was the winner in this category, but it only came in at 83.

The other six motor insurance companies surveyed all ranked outside the

top 100 brands overall, headed by Eagle Star in 131st position, closely

followed by Norwich Union and Commercial Union. Churchill Insurance and

Royal Insurance formed another group lower down the rankings.



Dower says: ‘Despite improvements in customer service levels, insurance

companies, like banks, are still not highly regarded. Customer loyalty

is a top priority for motor insurance companies and, with the exception

of Direct Line, there appears to be very little brand differentiation.’



Brand differentiation



Total Research has this year pioneered a new way of looking at the

research by producing a brand equity index.



This index takes into account the salience, usage and perceived quality

figures to give a different monitor of brand equity. It introduces more

variables and compares brand equity with its presence in the marketplace

so we can see the impact of usage on the rankings.



In the brand equity index, BT comes top, followed by Duracell, Kodak,

Kellogg’s Corn Flakes and then Nescafe.



Mercedes-Benz, which tops the perceived quality ranking, comes in at 45.



But Dower points out that this model is not as fair as the ranking by

perceived quality because it cuts across categories. ‘You can’t compare

apples with pears and you can’t compare the usage of cars with the

usage of batteries,’ he says. And usage of Mercedes-Benz is a lot less

than that of other brands.



But if the brand equity index is applied to different brands within the

same category, then the results are revealing (see table). In the car

sector, for example, whereas Mercedes tops the overall perceived quality

ranking, on the brand equity index it is Ford that comes top. BMW

remains in second place, followed by Vauxhall and Mercedes in fourth

place. This is because it is a reflection of usage.



Although this type of perceived quality and brand equity research is

taking off in the US, the UK market remains to be convinced. John

Rodgers, a director of the brand development division of The Research

Business, welcomes any new research into brands but feels it is

important to look at the broader picture.



‘I am all for anything that adds to colouring our picture, but there are

other elements to consider before you get to the bottom of what brand

equity is. There are many equity issues as brands mean different things

to us at different times,’ he says.



Susan Blackall, managing director of Research International, agrees:

‘Perceived quality is only one aspect of brand equity. It is valuable to

measure perceived quality but it must be looked at in context, as there

is never a single-figure answer to anything.’



------------------------------------------------------------------------

Ranking by perceived quality

------------------------------------------------------------------------

     Brand                   1996 PQ        1995 PQ        Salience %

 1   Mercedes-Benz            8.67           8.57             77

 2   BMW                      8.55           8.29             82

 3   DisneyWorld Florida      8.23           8.08             57

 4   Duracell                 8.09           7.91             97

 5   Cadbury’s Dairy Milk     8.08             -              96

 6   Levi’s                   8.04           7.91             84

 7   Fisher Price             8.03           8.17             79 

 8   Lego                     8.01           8.25             83

 9   Kellogg’s Corn Flakes    7.95           7.97             95

10   Kodak                    7.89           7.86             90

11   Sony                     7.86           7.85             83

12   Visa                     7.67           7.53             74

13   Black & Decker           7.65           7.49             90

14   Bosch                    7.64           7.76             74

15   Panasonic                7.63           7.78             80

16   Reebok                   7.59           7.54             80

17   Nike                     7.52           7.29             76

18   Audi                     7.51           7.43             74

19   Nescafe                  7.47             -              92

20   IBM                      7.41           7.31             53

21   Legoland                 7.40           7.68             60

22   Adidas                   7.37           7.17             84

23   BT                       7.36           6.84             98

24   Alton Towers             7.36           7.43             67

25   Kit Kat                  7.33           7.48             96

26   Rover                    7.33           7.44             81

27   Volvo                    7.32           7.39             80

28   Bosch Household          7.31           7.26             67

29   The Discovery Channel    7.29           7.30             44

30   Hoover                   7.27           7.30             91

31   Zanussi                  7.26           7.16             72

32   Galaxy                   7.25             -              93

33   Interflora               7.21             -              81

34   Hitachi                  7.20           7.32             75

35   Hotpoint                 7.18           7.29             88

35   Duplo                    7.18           7.53             58

37   Mars                     7.16           7.31             96

37   MasterCard               7.16           6.92             58

39   Apple                    7.15           6.89             47

40   Volkswagen               7.13           7.07             80

Source: Total Research                                       

------------------------------------------------------------------------

------------------------------------------------------------------------

Perceived quality v brand equity index

------------------------------------------------------------------------

   By perceived quality                By brand equity index

 1  Mercedes-Benz          8.57         1    Ford                 180.8

 2  BMW                    8.55         2    BMW                  169.5

 3  Audi                   7.51         3    Vauxhall             166.5

 4  Rover                  7.33         4    Mercedes-Benz        163.7

 5  Volvo                  7.32         5    Rover                163.3

 6  Volkswagen             7.13         6    Volkswagen           156.3

 7  Vauxhall               7.05         7    Volvo                156.2

 8  Ford                   6.98         8    Audi                 150.1

 9  Peugeot                6.89         9    Peugeot              149.9

10  Toyota                 6.85        10    Nissan               143.5

Source: Total Research

------------------------------------------------------------------------



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