Control over the placement of brands on the territory of facilities and the elimination of unauthorized placement of brands (structures, objects, personnel and contractors)

The following methods for assessing branding effectiveness are distinguished:

• * analysis of the relationship between revenue growth and branding/advertising costs;
• * analysis of the ratio of growth in the number of clients and advertising costs;
• * analysis of the ratio of brand awareness growth indicators and branding costs;
• * analysis of the ratio of growth indicators of the company's market share and branding costs;
• * analysis of the dynamics of unit advertising costs per attracted client;
• * analysis of advertising budgets of the company and its competitors;
• * analysis of the dynamics of market shares and advertising budgets of the company and its competitors;
• * analysis of the dynamics of the market value of the brand.

Currently, the value of intangible assets is determined differently depending on the field of activity and experience of the company. There is no clear cost structure for creating and operating a brand. Brand value is defined as the monetary expression of current (and sometimes capital) costs for its formation and use.

The assessment of the intangible component of a brand can be carried out by an economic assessment of the cost structure, including the cost of promoting a product, the volume of current sales, return on investment, the value of reputation, the degree of coverage and “advancement” of the target audience, the number of publications in the media, changes in the social and cultural environment, etc. d.

About methods for assessing brand value

Along with the cost approach to assessing brand value, methods are used based on the principle of integrating the main factors that influence its brand value - this is the strength of the brand and the profit that the brand provides.

Let's take a closer look at them.

Interbrand agency method. According to this method, the valuation is based on the profits that the brand will generate in the future. A forecast of net profit is made for a specific line of business of the company, and tangible assets are subtracted from this amount of profit. The remainder is valued as intangible assets, which include patents, customer loyalty and brand value. Then a part belonging only to the brand is separated from this remainder, for which marketing research is carried out. This allows you to determine the strength of the brand and assess the risk of projected profits.

According to the total cost method, the costs of creating and promoting a brand are calculated: research and development costs, artistic design and packaging, legal registration and protection, advertising costs, promotion and public relations costs, including the discount factor.

The residual value method assumes that brand equity is defined as the difference between the current market price of the company and the value of tangible, financial and non-brand intangible assets.

Under the royalty exemption method, brand equity is assessed based on the amount of royalty payments that the company receives for the right to use the brand. Deductions are calculated based on sales volume.

The Young & Rabicam advertising agency method assumes that brand equity is determined by brand research using a questionnaire consisting of 32 thematic questions and a set of 4 indicators - differentiation, relevance, respect, understanding. When assessing brand assets, they are guided by information about brand equity. Integration according to the four indicated indicators is carried out using a diagnostic grid - the brand matrix (“brand dignity” - “brand strength”), which allows you to select strong, fading and sinking brands.

According to Total research's Equi Trend method, long-term observational data is used to estimate brand value. The method is based on three general indicators of brand equity (visibility, perceived quality, user satisfaction) and makes it possible to approach the assessment of brand strength from the consumer side.

Aaker's method is based on the selection of a set of indicators, which are obtained using quantitative (statistical models) analysis and the study of practical situations (cases) about fluctuations in price premiums. The method takes into account the experience of other firms in determining the value of brands. There are “ten indicators of brand equity”:

• * commitment (price premium, customer satisfaction/brand loyalty);
• * perceived brand quality (perceived quality, leadership/popularity);
• * associations/differentiations (perceived value, brand personality, associations with the organization);
• * brand awareness (brand awareness);
• * market behavior (market share, market price and brand representation in the distribution network).

Creating and developing a brand involves risk. Risk as a situational systemic characteristic of the activities of any commercial structure - a company that produces and sells goods in both domestic and foreign markets - must be supplemented with a brand risk component.

Brand value can be considered the most important strategic indicator of branding effectiveness. At the same time, strategic indicators characterizing the effectiveness of branding include brand value, awareness, satisfaction with the brand and loyalty to it.

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Introduction

Branding has become one of the most pressing topics in modern marketing. Various aspects of branding act as objects of both theoretical study and many empirical studies. However, there are still significant gaps in scientific research on the topic of branding, and a key one is the assessment of branding effectiveness. brand loyalty market

The relevance of this work lies in the fact that despite the interest of many companies in obtaining accurate assessments of the effectiveness of brand creation and promotion activities, a small part of them use branding metrics in practice (Davis, Dunn, 2002). If these indicators are used, they have a fairly narrow application and measure the effectiveness of a single branding event (Starov, Alkanova, 2009).

The problem is that the poor development of this aspect in theory is reflected in practical activity. Therefore, the purpose of this study is to evaluate the effectiveness of branding using the example of the Dremel brand, part of the Bosch portfolio of power tools brands, and develop recommendations for building a stronger brand.

To achieve this goal, it is necessary to complete a number of tasks:

1) Study the theoretical foundations of the concept of “brand”, “branding” and “branding effectiveness”;

2) Analyze various approaches to assessing the effectiveness of branding;

3) Collect and analyze secondary information and internal company data to calculate market and financial indicators;

4) Conduct an online consumer survey to calculate behavioral and perception metrics;

5) Conduct an in-depth interview with the company’s brand managers to assess internal branding;

The object of the study is the Dremel brand, one of the brands in the Bosch line of power tools. The subject of the study is assessing the effectiveness of branding using the example of the Dremel brand.

The theoretical basis of the work consisted mainly of the works of the authors: Aaker, Chernatony, Thomson, Davis and Dunn, Munoz and Kumar, as well as articles and a textbook by Starov.

The practical significance of this study is that its results can be used by Bosch and the Dremel brand to take measures to build effective branding.

This final qualifying work consists of an introduction, three chapters, a conclusion, a list of references and applications.

Chapter 1. Theoretical foundations for assessing the effectiveness of company branding

1.1 Brand definition and functions

In modern market conditions, a brand is becoming one of the company’s key assets. Many executives are coming to realize that the financial value of companies can be determined by the value of their brands. (Davis, Dunn, 2002)

There are several definitions of a brand, emphasizing different aspects of a brand. Thus, for example, in terms of its emphasis on identifying a product and distinguishing it from its competitors, a brand is defined as “a name or symbol that identifies a product.” In this case, a successful brand identifies a product that has a significant competitive advantage (McDonald, 1999).

Focusing on the consumer's perception of a product, a brand is interpreted as “a set of perceptions in the eyes of the consumer” and includes the associations that arise in connection with the product (Feldwick, 2002).

In terms of the manufacturer's promise to the consumer, a brand is “the collection of names and other symbols used to identify a product and the promise made to the buyer” (Dowling, 2006). Whereas, with an emphasis on added value, a brand is understood as “a product that meets the functional needs of some users and provides them with some additional value that can satisfy certain psychological needs and motivate purchase” (Jones, 2005).

There are also two main approaches to the interpretation of the concept of “brand”: economic (accounting) and managerial. In the context of a management approach, we can highlight the most cited definition of a brand in the professional literature, proposed by the American Marketing Association in 1960: “A brand is a name, term, sign, symbol or design, as well as combinations thereof, that are intended to identify the goods or services of one seller or group of sellers and to differentiate them from competitors' products or services." From the point of view of the economic approach, a brand is an intangible asset of a company. However, specialist R. Burgman, who follows this approach, argues that in order to recognize a brand as an intangible asset, it is necessary to accurately calculate the costs of its creation. The difficulty with this approach is that it is often difficult to separate brand costs from the costs of developing the company as a whole (Burgman, 2005).

A brand, according to Aaker, performs such functions for the consumer as:

· providing value proposition;

· ensuring confidence in the company's branded products.

At the same time, value proposition, according to Aaker, refers to the provision of functional, emotional, and self-expression benefits that provide brand value to the consumer (Aaker, 2003). While the function of ensuring brand trust plays a guarantee role and a support role for sub-brands.

However, despite the active study of various areas in the field of brand management, in practice, few companies track the effectiveness of branding activities. In order to evaluate the effectiveness of actions to create and promote a brand, it is necessary to understand what branding effectiveness is and what indicators should be used to measure it.

1.2 Definition of the concept of “branding” and “branding effectiveness”

Branding is the process of creating and developing a brand, as well as its identity (Starov, 2003). It is worth noting that this process is continuous, which is reflected in the need to monitor changes in the market environment, current trends, as well as fluctuations in consumer perception, and the subsequent updating of the brand itself. The key task of branding is to create the right brand image and accurately convey it to the consumer. If there is a discrepancy between the brand identity (brand image) and the perceived image, it is necessary to use marketing tools to bridge the existing gap.

The process of creating and developing a brand (branding) is presented in the form of several levels: (Doyle, 2000).

1) Entry level is a product that satisfies the basic needs (nuclear services) of consumers.

2) The core brand includes elements that make the product different from competitors' products. For example, brand name, packaging design, product quality.

3) The third level focuses on making the brand more attractive to the buyer by adding additional benefits such as warranty, technical support, free shipping and other conditions. Thus, the company aims to create a strengthened or expanded brand.

4) Over time, consumers begin to view the enhanced version of the brand as a standard set, and then the need arises to create added value for sustainable brand differentiation.

In the context of branding, the classical concept of “efficiency” characterizes the ratio of the effect obtained when creating and promoting a brand and the costs of its implementation (Starov, Alkanova, 2009). In this case, branding costs are calculated by summing up all costs incurred to create and develop a brand. However, “effectiveness” has another component - this is the degree of correspondence between the planned image and the perceived image.

In branding, it is difficult to determine the effectiveness of investments due to the fact that this process is associated with the creation of not only material values ​​of the brand, but also with emotional and symbolic components. Since the concept of branding effectiveness is multidimensional, the assessment should consider a set of several types of effect.

There are two types of efficiency - economic and communicative (Starov, Alkanova, 2010). Cost-effectiveness is based on the comparison of financial indicators and is a critical branding indicator when making decisions. Whereas communicative effectiveness is monitored by the way the company's communications reach the target audience and is assessed by the impact on its perception. Data on communication effectiveness is more difficult to collect and evaluate, since it becomes necessary to contact the target audience through surveys or interviews. In addition to longer data collection, assessing communicative effectiveness entails such difficulties as: correct interpretation of the responses received and the reliability of the results obtained.

In the literature, there are two types of branding: external and internal. External branding is aimed at consumers, but it will not be successfully implemented without internal branding activities. Internal branding, in turn, aims to ensure that employees understand and accept the brand's values, and are able to fully convey them to the final audience (Thomson et al., 1999).

In order to understand how the effectiveness of these types of branding can be assessed, the next part will look at various approaches and models.

1.3 Approaches to assessing branding effectiveness

Many authors have touched upon the topic of assessing the effectiveness of branding, proposing various approaches to solving this problem. However, so far most of the developed models have serious shortcomings due to the existence of a number of objective methodological difficulties. First, the long-term effect of branding cannot always be assessed. Secondly, it is difficult to separate the effect of directly creating and promoting a brand from other activities in the company, since they are closely interrelated. Moreover, many branding indicators cannot be measured from a financial point of view.

A method for assessing the compliance of internal attitudes of employees with brand values ​​was developed by K. Thomson in 1999 (Thomson et al., 1999). The assessment takes into account two parameters: intellectual and emotional involvement. At the same time, intellectual engagement refers to employees’ understanding of their role in the company, in addition to knowledge and understanding of the values ​​of the brand itself. While emotional involvement includes in the assessment such factors as: employee enthusiasm and willingness to embody brand values ​​in practical application. As a result of assessing the two types of engagement, a matrix is ​​compiled dividing employees into 4 categories:

· “Supporters” fully share the values ​​that the brand has, and, moreover, are ready to recommend others to purchase products or use the services of this brand.

· “Observers” are well aware of the brand’s values ​​and understand their place in the company’s achievements, but they lack enthusiasm and involvement in the branding process.

· “Idle guns” have a high emotional involvement in building a brand, but do not understand or do not accept some of the brand’s values. This type of employee requires training to raise awareness of the brand's mission and values.

· “Weak link”: employees have neither intellectual nor emotional involvement in the branding process.

Using the Thomson matrix will allow you to measure the degree of employee involvement in building a brand, identify employee weaknesses, and develop programs to eliminate them and increase the effectiveness of internal branding.

As a way to convey certain knowledge to employees and convey the necessary information, such internal communications are used as: (Sbrka Hudcovb, 2014)

· Personal meetings;

· Video conferencing;

· Telephone negotiations;

In addition, some companies use communication tools such as brand books, presentations and special guides directly to convey the mission and values ​​of the company or brand. The introduction of such communications into the internal branding system will allow the company to form a holistic understanding of the brand among employees, strengthen their faith in the brand’s values, and also act in accordance with the given vector of brand development.

In 1998, L. de Chernatony conducted a study in which he proved the need to use a whole set of metrics to assess the success of a brand, based both on business indicators and those obtained by surveying consumer opinions. (de Chernatony, Riley, Harris, 1998).

L. de Chernatony developed a matrix that consists of two columns and five rows. It should be noted that this approach was based on Feldwick's three-dimensional brand equity model (Feldwick, 1996).

The columns are divided into external and internal brand evaluation, while the rows include: brand vision, organizational culture, brand objectives, brand essence, implementation and brand sourcing. These parameters represent the building blocks of creating and promoting a brand. Each parameter is revealed by receiving detailed answers to questions (51 questions in total) and is assessed on a scale from 0 to 5. After which, a brand “health” diagram is constructed, which allows you to assess the viability of the brand, identify its strengths, and also find weak points that require measures to improve the effectiveness of brand management. (de Chernatony, 2006).

The Chernatony model has its advantages and disadvantages. So, among the advantages stand out:

1) Multidimensional assessment;

2) Visual presentation of results (clarity);

3) Integral assessment;

4) Accounting for internal and external brand equity.

While the disadvantages or limitations of this approach are:

1) Large bias in favor of internal branding assessment;

2) Lack of financial components in the model.

American specialist D. Aaker believes that the effectiveness of branding should be assessed based on an analysis of indicators of the use of brand equity. A system of indicators called the “ten brand equity indicators” allows you to evaluate the effectiveness of using brand equity assets. According to the author, effective brand management includes assessment of both market and consumer indicators. Moreover, the first four groups of indicators, such as indicators of commitment, perceived brand quality/leadership, association and differentiation, as well as indicators of brand awareness, are consumer assessments of brand equity assets that can only be obtained by surveying consumers. The fifth group - indicators of market behavior - are calculated by analyzing the situation in the market (market share, brand representation in the distribution network).

D. Aaker identifies consumer brand loyalty as a core indicator, since it is a significant entry barrier for competitors, represents the opportunity to receive a price premium, and also puts barriers to price competition. (Aaker, 2003)

The advantages of Aaker's model can be identified as follows:

· Taking into account market indicators;

· An indication of the need to adapt the model to specific circumstances or to the specifics of the industry.

The disadvantages or limitations of the model include:

· Significant preponderance in favor of consumer ratings;

· Lack of financial indicators.

According to Sherrington's model, performance assessment should be carried out using a key performance indicator (KPI - Key Performance Indicator). M. Sherrington identified the need to determine a dominant indicator that is tied to a specific market and company strategy (Sherrington, 2006).

However, this approach is subject to some doubts and has its weaknesses. For example, the model requires constant monitoring of the brand’s condition and frequent verification of the sufficiency of the selected indicator, which complicates the evaluation system. Moreover, the approach requires the construction of complex multifactor econometric models in order to determine the influence of the factors under study on the selected key indicator.

Among the assessment models based on analysis of groups of metrics, there are two main approaches: the contact branding metrics of S. Davis and M. Dunn and the approach of T. Munoz and S. Kumar.

According to Davis and Dunn's model, to assess the role of a brand in achieving a company's tactical and strategic goals, it is necessary to develop branding effectiveness metrics. When developing such indicators, the authors used the concept of contact branding. The essence of the concept is to highlight the points of contact of the brand/company with the consumer and stage-by-stage assessment of the effectiveness of brand management (Davis, Dunn, 2002). The process of analyzing the consumer experience is divided into three groups of contact points: experience before the purchase, during the purchase and after it. Ultimately, the effectiveness of contact branding is expressed in ensuring that the consumer receives a positive experience at all three stages of interaction with the brand.

· Brand awareness;

· Brand understanding;

· Trust in the brand;

· Brand preference;

· Fulfillment of brand promises;

· Satisfaction with the brand;

· Influence of the brand on the purchasing decision;

While strategic metrics measure the impact of ongoing activities to create a positive brand experience on the performance of the company’s business itself. Among the strategic indicators in the model are:

· Brand expansion;

· Brand purchaseability;

· Price premium for the brand;

· Commitment to the brand;

· Retention of brand customers.

The choice of certain indicators depends on what goals the company pursues. However, it is worth noting that the model is not linked to financial indicators, so when analyzing the results, a full-fledged vision of the situation with the brand may not emerge, which cannot be said, for example, about the model of T. Munoz and Sh. Kumar (Munoz, Kumar, 2004).

The authors build a branding assessment system using indicators of three groups: perception metrics, behavioral and financial indicators. Perception effects are associated with creating awareness of the brand, its benefits and advantages, the formation of a positive image and a positive attitude towards it. Behavioral metrics measure customer behavior after a purchase, which is reflected in brand preferences, repeat purchases and recommendations to friends, family and acquaintances. Financial metrics, in turn, evaluate the effects associated with increased sales volumes, the company's return on investment in brand development (ROBI), as well as the increase in brand equity.

The main prerequisite for creating a balanced scorecard model was the assertion that a holistic picture of an organization’s activities cannot be obtained from the calculation of any single key indicator. In this regard, R. Kaplan and D. Norton developed a system that included a number of internal and external indicators. Using such a model will allow the enterprise to integrate the results of marketing activities into the overall performance of the entire company. However, there are several conditions for using such a model in practice. Firstly, a balanced scorecard system must be implemented in all functional departments of the company. And, secondly, it is necessary to understand that branding will be considered as one of the tactical marketing tools, which does not correctly reflect existing trends.

S.A. Starov, in turn, developed an integral model for assessing the effectiveness of branding, taking as a basis the contact branding model of Davis and Dunn (Davis, Dunn, 2002). The author structured the proposed system of metrics based not on tactical and strategic objectives, but from the position of mutual subordination and interdependence of indicators. As a prerequisite for this approach, it can be noted that a new look at the model will create the basis for an integral model for assessing the effectiveness of branding, in which each indicator will belong to one of four groups of metrics:

· Perception metrics;

· Behavioral metrics;

· Market metrics;

· Financial metrics.

Let's take a closer look at each of these groups of metrics. So, as mentioned earlier, perception metrics are associated with creating awareness and developing a positive attitude towards a brand. At the same time, Davis and Dunn divide this group into two components:

· Awareness metrics;

· Metrics of familiarity with the brand and readiness to choose a product.

The concept of awareness measures the degree of overall visibility of a brand among the competitive environment in the market. While metrics of familiarity with a brand and readiness to choose a given product include several attributes: uniqueness and relevance of the brand, understanding of the brand, trust in the brand and influence of the brand on the final purchase decision.

Table 1. Metrics of awareness, brand familiarity and willingness to choose a product

Behavioral metrics assess cognitive and affective attitudes toward a brand. This group is also divided into two components:

· Metrics related to the purchasing decision;

· Metrics related to post-purchase behavior.

Table 2. Metrics associated with purchase decision and post-purchase behavior

A group of market metrics determines the competitive position of a brand in the market, assessing such indicators as:

· Market share;

· Distribution level;

· Brand development index;

· Brand extension.

Market share is one of the most important marketing indicators of branding effectiveness, which determines the competitiveness of a brand and its chances of retaining existing customers and attracting potential buyers.

Market Share = Penetration Rate * (Purchase Frequency * Quantity Purchased)

As for the level of distribution, along with numerical distribution, that is, the percentage of stores in which the brand is represented, the weighted distribution indicator is also calculated.

Weighted distribution indicator

Numerical distribution is considered a quantitative indicator that reflects the breadth of a company's brand presence, while weighted distribution provides a qualitative assessment and expresses the level of brand presence in stores.

Also, in order to assess the level of distribution, the indicator of the absence of goods at a retail outlet (Out of Stock) is used. This coefficient assesses the stability of supplies of goods of a given brand to points of sale. The lower this indicator, the more effectively the work of distributors in developing the brand is structured.

In turn, the brand development index (BDI - Brand Development Index) is calculated using the formula:

It is worth noting that this indicator can be used if the brand is represented in several regions of the country. If the BDI indicator is less than 100%, then the brand development index is considered low, and more than 100% is considered high. Thus, it is possible to evaluate and compare the development of the brand in different regions of the country.

Brand expansion occurs due to an increase in the number of users, distribution to new product groups and untapped markets. This indicator is important for optimizing the brand portfolio and geographic coverage of the new territory by the company.

Financial metrics primarily include indicators of return on investment in the brand (ROBI) and the current value of the brand.

The return on investment in a brand reflects the effectiveness of investments in creating and promoting a brand. The formula for calculation is the following ratio:

The result at this stage of work was the definition of the concepts of brand, branding and branding effectiveness and consideration of various approaches to assessing branding effectiveness.

In the process of studying the literature, it was found that there are several definitions of a brand, depending on which aspect is emphasized. Two key functions of a brand were also identified: providing value proposition and trust in the firm's branded products.

Moreover, it was determined what branding is, what its key task is, what levels exist in the process of creating and promoting a brand, and what is meant by branding effectiveness.

At the stage of considering approaches to assessing the effectiveness of branding, several models were studied based on:

· Components of brand equity;

· Analysis by groups of metrics.

In addition, econometric models for assessing the effectiveness of branding and an assessment model based on the balanced scorecard were touched upon. Separately, it is worth highlighting the Thomson and Chernatony models for assessing the effectiveness of internal branding, which will be used in the practical part of the work, as well as the integral model, which will be taken as the basis for assessing the effectiveness of branding using the example of a specific Dremel brand.

Chapter 2. Methodological basis for research into assessing the effectiveness of branding using the example of a brand Dremel

2.1 Object of study

Dremel is one of the world's leading manufacturers of high-speed multi-tools. The target audience for such tools includes both professional craftsmen (carpenters, mechanics, auto mechanics), as well as amateurs who have creative hobbies, or home craftsmen who prefer to carry out projects with their own hands.

Dremel Manufacturing Co. was founded in 1932 in America, 3 years later its founder Albert J. Dremel invented a high-speed rotary tool. In 1962, the Dremel brand became part of the Robert Bosch Gmbh group of companies. Now the brand's products are supplied to more than 60 countries around the world, in particular, it is represented on the Russian market, which was selected for subsequent analysis.

Since the brand was created quite a long time ago, and its headquarters is located in Holland, the head office is involved in activities aimed at optimizing the performance of the product, improving the characteristics of the tool or changing the packaging. Brand managers at the Russian central office, in turn, adapt the strategy to the Russian market, and, as a result, promote the brand at the local level.

The list of activities to promote and support the Dremel brand includes:

· Distribution of POS materials (catalogues, stands, brochures);

· Conducting demonstrations at points of sale;

· Training of employees of partner stores, as well as conducting internal trainings for Bosch employees;

· Participation in exhibitions and various events related to DIY (Do it yourself) projects;

· Participation of the brand in internal company events (Bosch Day);

· Posting training videos on the Youtube channel.

· Development of promotional offers for clients.

Thus, the Dremel brand was chosen as the object of research to evaluate the effectiveness of branding. Despite the fact that it occupies a strong position in the global market, it still has great potential for growth and development in Russia.

2.2 Study design

Since we need to collect and analyze both quantitative and qualitative data to complete the research objectives, we will use a “mixed” design. The study was based on the integral model of branding assessment, since it seems to be the most complete and comprehensive. Within the framework of this model, it is necessary to calculate such metrics as:

· Perception metrics;

· Behavioral metrics;

· Market metrics;

· Financial metrics.

The first stage consists of collecting secondary information to calculate market and financial metrics, as well as their subsequent analysis. The information was obtained through the use of special statistical tools containing internal company data, such as: Bi@PT and SAP (with the permission of the company).

The second stage of the study will be an online survey of existing and potential consumers of Dremel products in order to calculate behavioral and brand perception metrics.

This is followed by in-depth interviews with company employees working directly with the Dremel brand to assess internal branding.

2.3 Desk research phase

As part of the desk research, data was downloaded from programs such as Bi@PT and SAP (with the permission of the company). The necessary calculations and construction of graphs or diagrams were made using Excel. The following market and financial indicators were calculated:

· Share of the Dremel brand in the revenue of the Bosch power tool brand portfolio for 2016;

· Internal level of distribution of the Dremel brand, as well as the Service Level indicator to assess the stability of supplies;

· Brand development index in several regions of Russia (BDI);

· MROI coefficient to understand the effectiveness of investments in a brand.

Gfk research data was also used internally by Bosch to determine the brand's market share and competitive position.

2.4 Empirical research stage

The empirical research stage included two components: conducting quantitative and qualitative research. The purpose of the empirical study is to calculate perception and behavioral metrics through surveying respondents, as well as assessing internal branding through interviewing employees.

Thus, at the stage of conducting quantitative research, the main method of data collection was a formalized online survey of existing and potential consumers of the Dremel brand. To conduct the survey, a questionnaire was developed, created on the Google Docs platform. The questionnaire consisted of several sections, and the questions were based on an integral model for assessing branding effectiveness.

The first question measured respondents' level of awareness of the brand, while survey participants who were not aware of the brand were redirected to another page of the online questionnaire, which assessed the possibility of purchasing a power tool, and also collected information about the channels used by respondents when searching for products. For those who responded positively to the brand knowledge question, another set of questions was developed to assess the frequency of use of Dremel brand tools, the importance of various parameters influencing the choice of tools, satisfaction with the tools, brand loyalty and to explore associations with the brand. Moreover, those respondents who had heard of brand tools, but had not used them, were directed to a section whose questions were intended to provide an understanding of the reasons for not using the tools, as well as through what communication channels could be used to reach this audience. The last section contained a socio-demographic block of questions.

According to Dremel brand strategy, the age categories of the target audience range from 20 to 80 years old, so the survey did not have an age limit. The search for respondents was carried out mainly using social networks, using the snowball method: personal messages were sent to subscribers of groups related to power tools, as well as members of the official Dremel VKontakte community with a request to complete the survey.

The qualitative research phase consisted of conducting in-depth structured interviews with Bosch employees whose responsibilities include overseeing the Dremel brand. Regional brand managers, as well as an assistant brand manager, acted as experts on this topic. To conduct interviews with experts, an in-depth interview guide was developed based on the previously described Chernatony model, as well as taking into account the method of assessing internal branding proposed by K. Thomson.

Chapter 3. Assessing the effectiveness of branding using the example of the Dremel brand and developing recommendations for building a stronger brand

3.1 Desk research

Brand share in revenue. First of all, the brand's share in the revenue of the Bosch power tool brand line was calculated. The Dremel brand has the smallest share in the revenue of the power tools department in Russia, equal to 3%. Based on the company's internal data, the brand share is in a stable position and has remained virtually unchanged over the past 3 years.

Brand share in the market. According to a study by the Gfk agency for Bosch, the Dremel brand has virtually no direct analogues on the market. One of the closest competitors of Dremel multifunctional power tools includes power tools from the Proxxon brand. However, Proxxon brand tools have a narrower range of applications and a different focus from Dremel. When using Proxxon power tools, the consumer's goal is to work with precision and accuracy on small parts, while Dremel's main goal is versatility and wide application. Moreover, Dremel has a wide range of other tools that Proxxon does not. Other possible competitors have not been identified and have the status “No Names”.

According to a report by research agency Gfk, the Dremel brand holds an 80% share of the multi-tool market in Europe. Proxxon brand power tools account for 6%. The remaining 14% comes from the “Other” and “No Names” categories.

Based on this information, it can be believed that the brand has a strong competitive position in the niche market of multi-functional power tools in the European market. Unfortunately, there is no exact data exclusively for Russia, but we can say based on expert observations that in our country the brand feels a little worse, but this ratio approximately reflects the current situation in Russia.

Distribution level. Due to the lack of data on the total number of retail outlets in Russia, as well as information on sales volumes of the category under study, it seems possible to calculate the distribution indicator within the company. The number of active dealers who cooperate with all brands of Bosch power tools is taken as 100%; it is 2229, while the Dremel brand is represented in 1178 stores. This means that the brand’s distribution level relative to all retail outlets with which Bosch interacts is 52.8%.

To assess the stability of the supply of goods to points of sale and the satisfaction of market needs within the company, the Service Level (SV) indicator is used.

Thus, at the end of 2016, Dremel’s Service Level was 93.02%. This indicator for the Dremel brand was higher relative to the entire line of power tool brands in the Bosch portfolio.

At the same time, when analyzing the reasons for non-delivery of goods, one cannot fail to mention the status of products. Thus, 76.8% of undelivered products have Z5 status, which means that the product is relevant and actively sold. However, tools and equipment of this status constitute the largest array, reducing the SL indicator. The status of the Z7 article means that the product is still on sale, but there are already suspicions that it will be discontinued (16.1%). While the status of Z9 indicates a complete discontinuation of products (7.1%).

Based on this information, it can be argued that one of the reasons for the decrease in the SL indicator was the fact that customers were not notified or missed information about the blocking of the article.

Considering the SL indicator in the context of warehouses where Dremel brand products are stored, one can also trace a certain relationship. There are three warehouses in total: in Chekhov, Novosibirsk and Yekaterinburg. Judging by the graph, the warehouse in Yekaterinburg shows the worst results in logistics, namely 88.56%.

Thus, the warehouse in the city of Yekaterinburg has noticeable shortcomings in the logistics supply chain.

Brand development index. Since the Dremel brand has a wide presence both around the world and in the regions of Russia, it is possible to calculate development indices (BDI) for individual regions of the country and compare them with each other. For comparison, let's take several regions: Moscow region, Samara, Novosibirsk and the city of St. Petersburg. The regions were selected based on their size, as well as their belonging to different districts of the country.

According to Rosstat, the total population of Russia at the end of 2016 is 146,838,993 people. At the same time, 12,377,205 and 7,318,647 people live in Moscow and the Moscow region, respectively. There are 3,205,975 people in the Samara region and Samara, 2,762,237 people in Novosibirsk and Novosibirsk, and 5,281,579 people in St. Petersburg, respectively.

When calculating the development index by region, a download was made of sales divided into selected areas using a special analytical tool developed for the Bosch company - Bi@PT.

Thus, the development indices were as follows:

1. BDI (Moscow and Moscow region) = 345, 43%

2. BDI (Novosibirsk region) = 127.85%

3. BDI (St. Petersburg) = 113, 62%

4. BDI (Samara region) = 77.73%

In general, we can say that development indices for various regions of Russia are high, with the exception of the Samara region. Perhaps this is due to the fact that the Samara region has an emphasis on the production part, since the second Bosch plant has recently opened there.

Undoubtedly, there is a noticeable superiority in the development of Moscow and the Moscow region, which is probably also due to the fact that the company’s central office is located in this area, connections with clients are better established, and communications through hierarchical levels reach faster. In addition, in Moscow the number of dealers with whom there is the possibility of cooperation significantly prevails.

MROI. When calculating the return on investment, you need to keep in mind several assumptions that one way or another affect its estimate. Firstly, the market considered in the work is considered complex, so it is difficult to talk about the statistical reliability of the MROI calculation. It can be considered a complex market because it has a long sales cycle, that is, the client can make a purchase decision either immediately after a particular brand promotion event or up to several months or a year. Secondly, Dremel brand power tools have seasonal demand. Revenue from product sales increases sharply from December to March. This is indeed partly due to investments in brand development and promotion. However, seasonality mostly occurs due to the New Year holidays, as well as in honor of February 23 and March 8, since Dremel products are often purchased as gifts. Thirdly, there is the concept of natural market growth, in which even in the absence of marketing investments in maintaining the brand, turnover will grow.

Therefore, it is not possible to measure the return on investment without large losses and assumptions. Provided that the period of 2016 is taken into account and the resulting turnover is taken into account, as well as the total amount of investments in brand development for the entire year, the indicator will be:

MROI= = 989, 12%

In other words, every ruble invested brings the brand an additional 9.89 rubles. The indicator indicates a worthy result of the brand’s activities and the effectiveness of the investments made, but it carries a large error, so it is not advisable to rely on its calculation.

Thus, at the desk research stage, it was analyzed that the Dremel brand has a stable share of Bosch’s revenue, although it has remained virtually unchanged over the past three years. Nevertheless, the brand feels confident in the European market of multifunctional tools, which, with some error, can be transferred to the Russian market. The weaknesses that were found in the process of analyzing secondary data are as follows:

1. The internal brand distribution index is almost 2 times lower than the general indicator calculated taking into account all active dealers. Perhaps this is a problem in the internal communication of brand managers with sales managers, which, in turn, is reflected in the interaction with clients and end consumers.

2. Despite the fact that the Service Level indicator is quite high, there are problems associated with product delivery. Most often this happens due to delayed communication about the blocking of articles and the cessation of sales of tools or related devices, which also goes along the chain from the brand manager to the sales manager, and from him to customers. In terms of warehouses, the Service Level indicator is worsened by logistics activities in Yekaterinburg.

3.2 Empirical study

The empirical study consists of an online survey of respondents and in-depth interviews with Bosch employees.

3.2.1 Questionnaire: characteristics of respondents

As a result of the online survey, it was possible to collect 151 valid questionnaires, of which 97 were filled out by males and 53 by females. This ratio (65%:35%) reflects the target audience of the power tools market with a small error.

If we talk about the place of residence of the respondents, the overwhelming majority turned out to be residents of Moscow - 73%, while 27% of respondents chose the answer “Other”.

Regarding the financial situation of respondents, 41% of respondents classified themselves as people who have enough money to buy large household appliances, but cannot buy a new car. The second most popular answer, chosen by 25% of respondents, was “We have enough money for food and clothes, but it would be difficult to buy a refrigerator or washing machine.” Together, these two groups made up two-thirds of the respondents.

According to the level of education, respondents were divided into the three most significant groups: people with higher education (41%), incomplete higher education (32%) and secondary specialized education (15%)

3.2.2 Analysis of importance and satisfaction indicators

As part of the online survey, respondents were asked to rate on a seven-point scale various parameters influencing the choice of power tools in order of importance. Below is a table with the studied parameters in descending order of importance. The most important parameters when choosing multifunctional power tools are: quality, past purchase/use experience, reliability of the manufacturer and price of the product. The least significant parameters were: brand awareness, range of attachments and attachments, as well as reviews from acquaintances and friends.

Table 3. Tool parameters by importance

Research on the effectiveness of place branding strategy

A.A. Romanova,

Deputy City Head, Chernigov City Council; applicant, Chernigov State Technological University (14000, Ukraine, Chernigov, Magistratskaya str., 7; e-mail: [email protected])

Annotation. The article solves the problem of finding a methodology for assessing the effectiveness of brands in medium and small cities. The scientific and applied tools for assessing the effectiveness of territory branding have been improved, thanks to the development of a new methodology based on the Anholt City Brand Index model. The new methodology was tested and illustrated in detail using the example of measuring the effectiveness of the branding strategy of the city of Chernigov (Ukraine).

Abstract. The article solved the problem of using methods for measuring the effectiveness of brands of medium and small cities. The scientific and applied tools for evaluating the effectiveness of destination branding are improved thanks to the development of a new method based on the “Anholt City Brand Index” model. The new method has been tested and illustrated in detail by measuring the effectiveness of the branding strategy of Chernihiv city (Ukraine).

Key words: branding strategy, territory branding, brand assessment, marketing research.

Keywords: branding strategy, destination branding, brand evaluation, marketing research, City Brands Index.

Relevance of the topic. In the context of globalization and transformation of the economies of the countries of the post-Soviet space, when the economic model of development of territories has undergone irreversible changes, branding of territories is becoming increasingly important.

At the beginning of the 21st century, processes to create and promote territory brands intensified in many cities of Ukraine and Russia. At different territorial and administrative levels, the creation and promotion of destination brands as tools for increasing regional competitiveness takes place.

One of the main stages of implementing a territory branding strategy is assessing the effectiveness of the created brand. The problem is further aggravated by the fact that today there is no universal methodology that would allow assessing the effectiveness of brands in medium-sized and small cities in the post-Soviet space. The fact is that a brand is an intangible asset, so it is quite difficult to identify and evaluate the part of the value that it creates. Without exception, all methods are subject to serious justified criticism, so the process of their improvement is extremely important.

Thus, the problem of developing effective scientific and applied tools for assessing the effectiveness of ongoing branding activities is still extremely relevant for many regions, both the Russian Federation and Ukraine.

Analysis of the latest research and publications. The problems of territorial marketing and branding from the perspective of increasing the competitiveness of places have been studied and continue to be studied by many foreign and domestic scientists. The most iconic works are: Philip Kotler, Christer Asplund, Donald Haider and Irving Rein. The authors were the first to clearly justify the use of marketing and branding as a mechanism for the comprehensive promotion of territories.

Soon after them, the issues of territorial branding, as a separate categorical concept from marketing, were studied in detail by D. Vizgalov, A. Pankrukhin, M. Taits, and others.

The famous British researcher and political consultant Simon Anholt first developed a system for assessing the national brand “Anholt Nations Brand Index” and proposed a system for measuring the brands of large world cities “Anholt City Brand Index”.

The issues of branding of Ukrainian cities are dealt with by such researchers as Belovo-dskaya E.A. and Gaidabrus N.V. , Matusyak S.V. . Voloshenko M.

The purpose and objectives of the study: to develop and implement an effective methodology for assessing brands of medium and small cities (with a population of up to 500,000 people), which will determine the effectiveness of the brand of the city of Chernigov.

To do this, it is necessary to analyze the main methods for determining the effectiveness of a destination brand, among which to select, adapt and improve the most suitable one.

Presentation of the main research material. To assess the effectiveness of the formed city brand, it is necessary to apply a methodology that is adequate to the territorial identity, in particular, one that will correspond to the size of the city and will be financially feasible.

The models used to determine the effectiveness of national brands and brands of large global cities cannot be used in their original form to evaluate brands of medium and small urban destinations. For example, Simon Anholt's City Brand Index (CBI) model is not suitable for medium and small cities, since to evaluate the brand of a relatively small city, it is necessary to survey 10 thousand respondents from 20 countries, which is financially impractical. It should be added that the list of cities that are assessed using the CBI method does not include the capital of Ukraine

Journal of Economy and Entrepreneurship, Vol. 7, No. 10

Kyiv, as well as such cities of the Russian Federation as St. Petersburg, Kazan, etc., which significantly reduces the geography of analytical conclusions about the branding process in Russia and Ukraine.

Therefore, the author has proposed a methodology that is somewhat similar to Simon Anholt’s model (as part of the City Brand Index study), but significantly narrows the geography and number of respondents. The methodology is based on quantitative sociological research, with the help of which information is collected from potential groups of consumers of the territory (tourists, investors, new residents). Respondents are asked to evaluate the city according to six parameters: appearance, location, infrastructure, people, rhythm, potential.

It is no coincidence that quantitative methods of sociological research were chosen for data collection, such as those that are based on surveys of a certain number of respondents and allow obtaining the numerical values ​​that are being studied. Research gets its name from its focus on collecting quantitative information about a large number of research subjects. Such studies are designed to study objective, quantifiable characteristics of human behavior, they are used when accurate, statistically representative data is needed.

Quantitative research methods are most adequate in the situation of studying the behavioral reactions of large groups of populations, since their use makes it possible to extend the research results to the entire population and speak generally about the population of a certain destination, due to the coverage of a large number of respondents.

Quantitative research methods are always based on strict statistical models; large samples are used to determine the quantitative (numerical) values ​​of the indicators being studied. Strict requirements are imposed on sample modeling in quantitative research, based on probability theory and mathematical statistics. Information processing in such studies is carried out using ordered procedures that are quantitative in nature. The research results are statistically reliable, they can be extrapolated to the entire population of the destination or to the group to which the research is aimed. Quantitative research methods: questionnaires, personal interviews, telephone interviews.

The proposed methodology for assessing the effectiveness of a city brand was tested on April 22 - July 22, 2013 to assess the effectiveness of the Chernigov brand (regional center of Ukraine, with a population of 290 thousand people). By means of a questionnaire, 1,200 Internet users over 18 years of age, who are potential tourists to the city, were interviewed. The respondents were residents of two cities neighboring the city of Chernigov: Kyiv (Ukraine) and Gomel (Belarus), 600 respondents from each city. The maximum sampling error was ± 4%, with a confidence level of 95%. In order to minimize research costs, the survey was conducted on the Internet.

By randomly selecting volunteers from the information and tourism center of the Chernihiv City Council, questionnaires were sent out on social networks (Facebook, VKontakte) to those users who met the sampling criteria. The motivation for filling out the questionnaire was a competition among respondents who filled out the questionnaire for a two-day excursion tour to Chernigov. Then the data from the questionnaires was processed using a professional computer program for working with statistical data SPSS.

This technique differs from Simon Anolt’s CBI primarily in that the sample is modeled from probable potential tourists, that is, residents of those territories whom we primarily plan to turn into consumers of the product of our territory, and who we focused on when developing the brand. While Anholt selects respondents from the 20 most famous (according to various indicators) countries in the world.

Also, the author slightly increased the number of respondents from one location. Thus, according to the Anholt method, 10 thousand respondents from 20 countries of the world should be interviewed, that is, 500 respondents from each country (the maximum error is 4.4%, with a confidence level of 95%). In our case, using a random sampling method, we interview 600 residents from each planned city (margin of error is 4%, with a confidence level of 95%).

In the questionnaires offered to respondents, the city of Chernigov had to be assessed according to six main criteria, on a 5-point scale (“very bad”, “bad”, “satisfactory”, “good”, “very good”). In addition to assessing the criterion, respondents had to comment on their assessment in a descriptive form under each of the points, that is, answer the question of what exactly they like/dislike.

When conducting the survey, the instructions for the questionnaire noted that if the respondent had not been

Drobysheva E.A. - 2015

Determining the economic effect of creating and developing a brand is a rather difficult task. As D. Aaker noted, “...investments in creating brands are just as difficult to justify as investments in any other intangible assets.” P. Doyle writes that brands like NM A increase the shareholder value of the company. Therefore, the economic effect of brand management is formed due to four factors:

• 1) brands increase cash flows(increasing income, reducing costs and reducing investment);
• 2) brands accelerate cash flow(risks and time reduce the value of future flows, which means it is necessary to strive to obtain them faster);
• 3) brands have a positive impact on a company's long-term value, this influence is exerted by investments made in tangible and intangible assets;
• 4) brands reduce cost of capital and risks, and also stabilize expected cash flows.

Thus, to accurately assess the economic effect of branding and, accordingly, the return on investment in its creation and development, it is necessary to calculate the financial value of the brand using the income division method. This method is used by such well-known companies as Interbrand, Zinzmeyer&Lux(Switzerland), Brand Finance(Great Britain), V-Ratio(Russia), etc. When calculating the financial value of a brand using this method, two key indicators of the brand’s influence on projected cash flows are calculated:

• 1) brand contribution(degree of influence of the brand on consumer demand);
• 2) brand strength(the impact of the brand on reducing risks for the company).

Brand contribution(brand contribution) reflects the degree of its influence

on consumer choice in the purchasing decision process. Brand contribution is the share of cash flows from intangible assets EVA, the source of which is the brand. Brand contribution is a function of marketing, and this indicator may also contain key performance indicators (KPIs) of the marketing departments in the company.

Brand power(brand strength) reflects the ability to reduce risks for a company, make its business activities more diversified, stable and reliable. Brand strength measures the likelihood of generating projected cash flows. Based on this indicator, a discount factor is calculated by which the predicted cash flows, the source of which is the brand, are reduced. Brand strength is a function of management, and this indicator can be included in the KPIs of management departments in the company.

Thus, the most important brand factors that shape the economic effect are:

• brand influence on consumer demand (increasing demand and competitiveness);
• the influence of the brand on reducing risks for the company (effective use of brands for business diversification).

In the materials of D. Haig, O. V. Kitova, O. K. Oyner, O. N. Alkanova, T. Munoz, S. Kumar, S. Davis, M. Dunn, V. II. Domnin proposes various models that allow assessing the effectiveness of the management, marketing and branding management system. The model for transforming corporate activities into market and financial indicators of the company through influencing the perception, attitudes and activity of consumers is presented in Table. 13.1.

Table 13.1

Transformation of the company's actions into its market and financial

indicators

This approach provides a systematic understanding of the company’s branding activities and assessment of branding effectiveness in six areas: impact on consumers, perception, attitudes and market behavior of consumers, market and financial results from branding activities.

The concept of efficiency is based on comparing the obtained effect with the costs. Branding performance management (BPM) plays a special role in the marketing performance management system. Comprehensive branding performance management is implemented at three levels:

• 1) strategic branding (management of the effectiveness of brand management and brand marketing);
• 2) tactical branding (evaluation of branding effectiveness);
• 3) operational branding (monitoring the position of the brand).

Strategic level designed to achieve strategic

company goals. On tactical level the solution of various tasks necessary to achieve strategic goals is organized. Operational level determines the planning, organization and control of numerous branding activities, which are a means for solving tactical problems.

At the operational level, it is necessary to measure many parameters (metrics) in the market environment to organize and evaluate the effectiveness of branding activities. Effectiveness at the tactical level is assessed using KPIs. Performance management at the strategic level is carried out using a balanced scorecard (BSC). For top managers, business owners and investors, the balanced scorecard is integrated with the company's main financial indicators, which are aggregated into a dashboard. A system of indicators is displayed graphically on such an information panel, giving a holistic view of the effectiveness of company management. The use of information systems to organize integrated performance management activities is called business intelligence (business intelligent - Bl).

• Aaker D., Jochimsteiler E. Brand leadership: A new concept of branding. P. 29.
• Doyle P. Value-based marketing. P. 302.

Recently, branding issues are increasingly becoming the object of theoretical research and scientific research. However, these studies remain problematic, which theorists rarely address, including the assessment of branding effectiveness. The weak theoretical development of this problem is also reflected in the actual practice of brand management. Despite the increasing need to accurately measure the effectiveness of branding activities, few companies actually use branding performance metrics. If these indicators are used, they measure the effectiveness of only a separate branding activity (for example, the effectiveness of using marketing communications tools to promote a brand), and do not assess the effectiveness of branding as a whole as a set of activities to create and develop a brand.

Thus, there is a need for a clear methodology that allows assessing the effectiveness of various branding activities as a whole, i.e. in integral performance assessment. This article proposes one of the possible approaches to solving the identified problem.

The first part of the article is devoted to a brief analysis of existing models for assessing branding effectiveness. The second part of the article proposes an integrated approach to assessing the effectiveness of branding and describes the structure and content of the main stages of assessment in accordance with the proposed model.

Differentiation of approaches to assessing the effectiveness of Branding

The concept of branding effectiveness. Efficiency characterizes the ratio of the effect obtained and the costs of its implementation and is “a kind of price or payment for achieving a given result” [Bukhalkov, 1999, p. 341]. Thus, to define the concept of “branding effectiveness” it is necessary to determine the costs of branding and the resulting effect.

Branding costs are determined by summing up the costs incurred to create and develop a brand: the costs of its development, creation and promotion through marketing communications. Information on the costs of branding events is usually relatively accessible and convenient for processing and analysis.

However, when calculating costs, the following factors must be assessed:

• the time period for which branding costs are calculated;
• structural components of costs when estimating costs. Thus, it is known that investments in advertising, on the one hand, lead directly to an increase in sales, which are measured immediately, on the other hand, these investments create recognition and brand image, which contributes to future sales;
• discount rates when adding up costs (to bring past costs to the present period).

Branding effects. Any effect reflects the degree of achievement of some given result, the evaluation of which compares actual or expected indicators with a predetermined goal (planned indicators). If the result is not achieved at all, then efficiency loses its positive economic significance. Thus, in the production and economic activities of a company, the efficiency indicator usually expresses the amount of income per unit of cost, for example, product profitability [Bukhalkov, 1999, p. 341].

In branding, defining the concept of effect is much more difficult, since building a brand is associated with the creation of not only material, but also emotional and symbolic values. Therefore, the concept of effect in branding is multifaceted. Due to the complex nature of costs and benefits, a set of branding effects should be considered when assessing the effectiveness of branding.

It appears that effects in branding can be divided into perceptual, behavioral and economic effects. Perceptual effects are associated with creating brand awareness and positive attitudes towards the brand (through various marketing communications activities). Behavioral effects are associated with the formation of brand loyalty. Economic (financial and market) effects are associated with an increase in sales volumes or market share of a brand, an increase in brand equity.

Approaches to assessing branding effectiveness. Currently, many authors have, to one degree or another, addressed the issue of assessing the success or effectiveness of branding, proposing various approaches to solving this difficult problem. A number of approaches and models that allow assessing the effectiveness of branding are presented below in a generalized form. Obviously, the brief overview demonstrated does not exhaust all existing approaches, however, most of the proposals remaining beyond its scope are to one degree or another similar to the options for assessing the effectiveness of branding given below.

Model by L. de Chernatony. L. de Chernatony in his works focuses on the importance of a holistic approach to assessing the effectiveness of brand management. In 1998, he undertook a study that demonstrated the need to use a whole set of criteria to assess the success of a brand, both based on business indicators and obtained by assessing consumer opinions.

Later, this approach was further developed in the development of a matrix consisting of two columns (internal and external brand assessment) and five rows (brand vision, organizational culture, brand objectives, brand essence, implementation and search for brand resources).

In Fig. 1 shows five categories representing the building blocks (sequential stages) of creating and developing a brand. Within each of them, questions were formulated (51 questions in total) to determine the effectiveness of branding at each specific stage of brand building.

Answers to these questions are given on a scale from 0 to 5 points. For each category, an integral score is calculated (the arithmetic average of scores for the entire number of questions within a certain category). So, for example, in the case of the “Brand Vision” option, the denominator is 14.

Rice. 1. Assessing the effectiveness of branding at various stages of brand building
Compiled by: .

The next step is to construct a brand health diagram, which makes it possible to assess its viability. Thus, in the hypothetical example given by Chernatony, the analyzed brand enjoys strong support from the “organizational culture”, but has problems in terms of “brand objectives” (Fig. 2).

A thorough analysis of the brand health diagram allows specialists to identify those areas in which it is necessary to take measures to improve the effectiveness of brand management.

Model by M. Sherrington. M. Sherrington suggests assessing the effectiveness of branding using a key performance indicator (KPI), which is tied to the company’s strategy and its specific vision of the market [Sherrington, 2006, p. 220]. Sherrington emphasizes the need to identify dominant KPIs, arguing that this is “an excellent way of focusing the business on the right growth patterns and checking whether growth goals are being achieved” [Sherrington, 2006, p. 224]. On the one hand, simplifying the system of indicators aimed at adapting to a specific market situation is justified. On the other hand, there are certain limits to simplification, and therefore, it is unreasonable to reduce such a complex and multidimensional construct as a brand to one dominant indicator. In addition, such an approach still requires constant monitoring of the strength (vitality) of the brand and additional verification of the sufficiency of the selected dominant KPI, which may not simplify, but, on the contrary, complicate the assessment system as a whole.

Rice. 2. Brand health chart (hypothetical example)
Source: .

Model by D. Aaker. Brand management guru, American specialist D. Aaker believes that the effectiveness of branding should be assessed based on an analysis of indicators of the use of brand equity assets, such as “brand awareness”, “perceived brand quality”, “brand loyalty” and "brand associations"

A system of indicators (Fig. 3), which the author called the “Brand Equity Ten”, allows you to evaluate the effectiveness of using assets. At the same time, the author believes that effective brand management includes a system of not only financial, but also behavioral and market indicators [Aaker, 2003, p. 376-377]. It should also be noted that this “ten” does not necessarily represent the optimal set for all possible situations and, according to the author, requires modification to fit the specific situation and task being performed.

As shown in Fig. 3, the first four groups of indicators are consumer assessments of brand equity assets obtained as a result of research. The fifth group uses indicators that reflect the current market situation (market share, brand representation in the distribution network). At the same time, according to D. Aaker, the core parameter of brand equity remains consumer loyalty to the brand, since it represents “an entry barrier for a competitor, the opportunity to receive a price premium and time to respond when a competitor’s new products appear, as well as an obstacle to destructive price competition "[Aaker, 2003, p. 380].

Rice. 3. “Ten indicators” of brand equity Source: [Aaker, 2003, p. 380].

Approach by T. Munoz and S. Kumar. T. Munoz and S. Kumar propose building a branding assessment system based on three classes of metrics (perceptual metrics, behavioral metrics, financial metrics), which make it possible to assess the effectiveness of branding. At the same time, the company itself determines which metrics will be included in these groups. The disadvantage of the proposed model is that it does not include market indicators (for example, market share and brand distribution indicators), focusing only on consumer and financial metrics.

Research by D. Lehman, K. Keller and J. Farley. In 2008, the results of a study by D. Lehman, K. Keller and J. Farley on brand metrics were published. The main goals of this analysis were to identify “universal” brand metrics (cleared of cross-cultural differences in the perception of brands) and to establish the subordination between them. The results obtained allowed us to formulate an assessment system of six key groups of brand metrics, including “brand understanding”, “comparative advantage”, “interpersonal relationships”, “brand history”, “brand preference” and “brand commitment”. In addition, the need to pay more attention to metrics such as “interpersonal relationships” and “brand history” is emphasized. Unfortunately, this study is devoted purely to consumer metrics (to a greater extent - perceptual metrics and to a lesser extent - behavioral metrics). Nevertheless, the generated groups of metrics can be used to build a general model for assessing branding effectiveness.

Model by S. Davis and M. Dunn. There is another model for assessing the effectiveness of branding - the approach proposed by S. Davis and M. Dunn, which we propose to dwell on in a little more detail. In their opinion, in order to assess the role of the brand in achieving the strategic and tactical goals of the company, it is necessary to develop indicators (metrics) of branding effectiveness - “measurable parameters for assessing the effectiveness of the actions of a brand-oriented company, i.e. a company that, when making strategic decisions, adheres to the rule of compliance of such decisions with the existing or desired brand policy" [Davis, Dunn, 2006, p. 147].

To develop branding performance indicators, S. Davis and M. Dunn propose using the concept of contact branding. It is based on the fact that by identifying and monitoring the points of contact between the brand and the consumer, the effectiveness of brand management can be assessed. At the same time, contact points are understood as all those ways in which “existing and potential consumers come into contact with the brand, and which can or are already used to influence current or future decisions related to the brand” [Schultz, Kitchen, 2004, p. 137].

To assess the effectiveness of branding, Davis and Dunn suggest analyzing the formation of consumer experience from the perspective of three groups of points of contact between the consumer and the brand, such as:

1) experience before making a purchase;

2) experience during the purchase;

3) experience after making a purchase (Fig. 4).

At the same time, the authors of the model note that the division of contact points into these groups is very arbitrary, since the same points can appear in more than one group at the same time and influence the behavior of both potential and actual buyers.

Rice. 4. “Wheel” of points of contact with the brand
Compiled from: [Davis, Dunn, 2005, p. 19].

The first group of touch points, aimed at attracting new consumers, builds knowledge about the brand before making a purchase. Experience of contact with a brand can be gained primarily through the influence of various marketing communications tools: advertising, viral marketing, PR campaigns, sales promotion. These marketing communications tools aim to, first, create brand awareness; secondly, to form the perception of the brand and the expectations associated with it; thirdly, convey the main benefits and advantages of a branded product to a potential buyer; fourthly, to ensure that the brand is included in the buyer’s choice set. At the same time, in our opinion, one should not use marketing communications (primarily advertising) to overestimate or exaggerate the expectations of customers from purchasing a given brand, since a negative experience of using a branded product after purchase can lead to consumer disappointment and reluctance to re-purchase products under the corresponding brand. title.

The second group of contact points is formed during the purchase. It aims to create a positive connection between the consumer and the brand while making a purchase. The formation of a favorable impression of the brand is influenced by the quality of service and professionalism of the sales staff, the atmosphere in the store, merchandising, sales promotion campaigns at the point of sale (distribution of trial samples, tastings).

The third group is contacts after making a purchase. It is aimed, firstly, at maintaining a favorable image among consumers who have purchased the brand; and, secondly, to ensure that they achieve a high level of satisfaction from their purchase. To create a positive experience after a purchase, after-sales services, warranties, and service are very important. However, the main goal of creating a post-purchase experience is to increase the number of customers loyal to the company and brand. This goal is achieved not only by a high level of service and brand support in accordance with the expectations that arose before and during the purchase, but also by loyalty programs (discount programs, sales promotions, loyalty clubs).

As a result, the effectiveness of contact branding is to ensure that the consumer receives a positive impression at all levels of contact with the brand. A negative customer experience at one touch point level will lead to ineffective branding as a whole. In other words, a favorable impression received by a buyer at one level of contact points with a brand is not always able to “compensate” for a negative attitude toward it experienced at another level. Thus, poor after-sales service will undermine the customer's trust in the brand, and the brand promises made in the previous two stages of formation will be in vain. It becomes clear that it is the total amount of contacts with a brand that consumers accumulate over time that determines their response to branding programs that go beyond managing individual contacts to managing the entire consumer experience before, during and after purchase.

In this regard, it is very important for a brand manager to understand how existing and potential consumers come into direct contact with the brand.

Metrics of contact branding in the model of S. Davis and M. Dunn. There are two types of metrics that, according to S. Davis and M. Dunn, should be taken into account in a company's metrics system. Tactical metrics provide diagnostics of the effectiveness of branding in terms of shaping the customer experience at points of contact with the brand. The authors note that these metrics “help you evaluate the activities you carry out that are relevant to existing or potential customers within one of three groups of brand touchpoints” [Davis, Dunn, 2005, p. 244].

Davis and Dunn consider the following metrics of branding effectiveness to be tactical: brand awareness; brand understanding; brand relevance; brand trust; fulfilling brand promises; brand preference; brand consideration; ; keeping the brand promise; brand satisfaction; brand recommendation [Davis, Dunn, 2005, p. 245-252].

Thus, the listed tactical metrics should be taken into account when assessing the effectiveness of a company’s activities at brand touch points. Performance analysis provides an opportunity to identify the strengths and weaknesses of a brand and identify those points of contact with the brand that require special strengthening.

Strategic metrics, in turn, “provide diagnostics of the impact of a brand on business performance. These metrics help you measure the impact of your brand building efforts on the overall performance of the brand, and thus the company as a whole" [Davis, Dunn, 2005, p. 244].

The following six strategic branding performance metrics provide insight into how a company's branding efforts and brand touchpoints impact overall performance:

1) brand extension;

3) retention of brand buyers;

4) brand purchaseability;

5) price premium for the brand;

6) brand commitment.

The choice of certain metrics for assessing branding effectiveness depends on the specific goals of the assessment. Without a clear understanding of specific goals, a company will continually struggle to determine which metrics truly matter to it. Table 1 can provide guidance in choosing the most appropriate metrics for a company based on its goals.

Table 1: Considering Brand Goals and Metrics Together

Source: .

Integral model for assessing branding effectiveness

Each of the approaches to assessing branding effectiveness discussed above has its own advantages and disadvantages. Most of them are characterized by the premise of the need to use consumer and financial market metrics to obtain an adequate assessment indicator. We share this position, however, in our opinion, none of the existing assessment models fully covers all the necessary indicators. One of the most promising approaches for the development of a new, integral model for assessing branding effectiveness is the contact branding model of S. Davis and M. Dunn. The choice of contact branding performance metrics as fundamental in the system of performance indicators for branding activities as a whole is explained, in our opinion, by the fact that they:

• they are practice-oriented because they allow us to assess how the brand manifests itself outside of companies in terms of customer expectations and competitors’ actions;
• provide information for making thoughtful strategic and tactical decisions on the creation, promotion and after-sales service of the brand;
• provide diagnostics of the brand’s impact on business performance;
• allow the company to more effectively invest in the support and development of brands;
• act as starting basic indicators (indicators of the first level effect - the effect of perception), on the basis of which it is possible to build a chain of behavioral, market and financial indicators for assessing the effectiveness of branding [Starov, 2008, p. 251].

However, we propose to structure the system of metrics proposed in the Davis and Dunn model not from the position of implementing strategic and tactical goals, but from the position of interdependence and subordination of metrics. It seems that this approach allows us to create the basis for developing an integral model for measuring branding effectiveness, where each of the 17 metrics associated with a specific category of brand touchpoints can belong to one of the following four general groups of metrics, identified on the basis of contact branding marketing activities:

1) perception metrics;

2) behavioral metrics;

3) market metrics;

4) financial metrics (Fig. 5).

These groups of metrics allow for integral monitoring of branding effectiveness (primarily the implementation of perception, behavioral, market and financial effects), i.e. monitor how effectively investments in the construction and development of the brand are used.

Perception metrics determine the degree of awareness of the consumer about the brand, his understanding of the advantages and benefits of its purchase, the possibility of including it in the selection set, i.e. evaluate consumer behavior before they purchase a brand.

Rice. 5. “Contact Wheel” and branding performance metrics

Behavioral metrics measure aspects of consumer behavior primarily post-purchase, which manifests itself in brand preference, repeat purchases, loyalty and willingness to recommend a favorite brand to others.

Market metrics determine the competitive position of a brand in the market and predetermine the economic and financial results of branding. Indicators such as market share, brand development index, distribution level represent the main market metrics for assessing branding effectiveness.

Financial metrics reflect the return on investment in a brand, a financial assessment of the increase in brand equity in connection with successful contact branding events. For this purpose, indicators such as ROBI (return on brand investment) and current brand value are used.

All these types of metrics provide an opportunity to fully evaluate the effectiveness of branding (Table 2). According to well-known experts in the field of brand management, T. Munoz and S. Kumar, “the key benefit of a brand assessment system is that it allows you to link branding and financial results.” All of the above indicators are interconnected and interdependent. Improving the target indicators of one of the groups of metrics contributes to the growth of the performance of indicators of another group of metrics.

As an example, let’s trace the connection between market and financial metrics. Strong brands own a significant market share: as a rule, the share of the leading brand is twice that of the brand in second place, and three times that of the brand occupying third position in the market. The brand with the largest market share also produces the highest value. According to a study of 2,600 companies, the rate of return on investment of brands with a market share of 40% is on average three times higher than that of brands with a market share of 10% [Doyle, 2001, p. 237] (Fig. 6).

Table 2. Branding effectiveness metrics

Compiled from: [Davis, Dunn, 2005, p. 245-253; Munoz, Kumar, 2004, p. 383].

Rice. 6. Relationship between market share and return on investment in a brand
Source: [Doyle, 2001, p. 238].

Let's take a closer look at these groups of metrics.

Brand perception metrics (Table 3) are divided into two groups:

• awareness metrics;
• metrics of familiarity with the brand and readiness to be included in the selection package. This group of metrics is measured when conducting consumer marketing research. Perceptual metrics include both metrics commonly used in other branding performance models (such as awareness or brand influence on purchasing decisions) and less commonly used metrics (such as brand awareness).

Table 3. Brand perception metrics

Behavioral metrics (Table 4) are aimed at assessing the cognitive and affective attitude towards the brand, which forms the overall opinion about it. They can also be divided into two groups of indicators:

1) related to the purchase decision;

2) related to behavior after the purchase.

Table 4. Brand behavioral metrics

Compiled from: [Davis, Dunn, 2005, p. 245-253].

Market metrics. In our opinion, the main market metrics that allow us to determine the effectiveness of branding include the following indicators:

• brand market share;
• brand development index;
• brand distribution level;
• brand extension.

A brand's market share is one of the most important marketing indicators of branding effectiveness, reflecting the competitiveness of a brand and its ability to attract potential and actual customers.

The market share of a brand can be determined using the formula proposed by G. Dowling [Dowling, 2006, p. 102]:

Brand Market Share = Penetration Rate x (Purchase Frequency x Quantity Purchased). (1)

Based on formula (1), we can conclude that three strategies should be used to increase market share:

1) increasing the quantity of branded goods purchased during one store visit (through the use of various sales promotion techniques, in particular the sale of packages containing several units of branded goods at the price of one unit, as well as the use of coupons at sales promotion points;

2) increasing the frequency of brand purchases on the market (a strategy aimed at persuading people to use a branded product more often and more intensively);

3) increasing the degree of brand penetration (the percentage of buyers of the desired brand from the total number of buyers purchasing goods of a certain category to which this brand belongs).

Dynamics of switching between brands and market share. Market share and its dynamics can be tracked using the analysis of switching between brands as a basis. In this regard, the study of this problem conducted by J.-J. deserves attention. Lambin (J.-J. Lambin).

To simplify the analysis of switching, Lamben limited himself to considering a market consisting of two competing brands. As shown in Fig. 7, from the point of view of dynamics, each specific purchase has three possible outcomes:

1) purchase of brand A goods;

2) purchase of brand B goods;

3) refusal to purchase.

Rice. 7. Dynamics of switching between two brands