The brand asset valuator (BAV) model measures the brand value of an organization. Developed by advertising agency Young & Rubicam, the key finding of the program was that brand value emerges only once sufficient time has passed. Put differently, brand perception develops progressively in the mind of the consumer.
Understanding the brand asset valuator model
The brand asset valuator model is the result of a research program conducted by advertising agency Young & Rubicam.
The key finding of the program was that brand value emerges only once sufficient time has passed.
Put differently, brand perception develops progressively in the mind of the consumer.
This progression is explained via four pillars: differentiation, relevance, esteem, and knowledge. In the next section, we’ll take a look at each pillar in more detail.
The four pillars of the BAV model
The four pillars are arranged under two broad categories: brand vitality and brand stature.
Brand vitality
Brand vitality describes the growth potential of a brand and includes:
Differentiation
Or the ability of a brand to stand out from competitors.
Differentiation is a powerful driver of curiosity, pricing power, and brand advocacy.
While differentiation is a good starting point, it tends to decline as the brand reaches maturity.
Relevance
How appropriate or meaningful is the brand to consumers? Does it meet expectations around price or convenience?
The brand asset valuator model notes that there is a direct correlation between relevance, differentiation, and market penetration.
Brand stature
Brand stature describes the consumer response to a brand.
As such, it reflects current brand performance and is a strong determinant of brand strategy. Brand stature includes:
Esteem
Or the consumer perceptions of a brand.
To what extent do consumers hold the brand in high regard? Esteem is driven by two factors.
The first is the public perception of brand quality and popularity.
The second factor considers how the proportions of quality and popularity differ from country to country.
Knowledge
The final pillar is where all brands want to be.
Here, consumers are aware of the brand and understand its identity.
High levels of awareness cause consumers to become intimate with a brand.
The brand asset valuator power grid
The BAV power grid can be used to capture the relationship between each of the four pillars.
Power grids show the relative strengths and weaknesses of a brand, which clarifies strategic direction.
They also help clarify the role of each element in a marketing mix.
On the vertical axis of the grid, the current strength of a brand in terms of relevance and differentiation is plotted.
On the horizontal axis, esteem and knowledge are plotted.
Both axes are measured from low to high, with a new brand starting its journey from the bottom left-hand corner and progressing through each pillar.
The grid is then divided into four quadrants, called pillar patterns:
New/unfocused
Describing a new brand that has recently entered the market, but occasionally an old, stagnant, unfocused, or unknown brand.
Both must seek to build awareness and traction by establishing uniqueness, meaning, and personality.
Niche/unrealized
This pillar pattern includes successfully emerging or momentum brands leading with differentiation.
They experience healthy and consistent growth which eventually builds relevance, esteem, and knowledge.
Leadership
At this point, brand leadership has been achieved with the organization enjoying increased revenue.
Brand leaders display high levels of all four pillars.
However, the BAV model acknowledges that most leading brands will decline if they fail to innovate and maintain a competitive advantage.
Eroded
Tese brands have high knowledge but low esteem, relevance, and differentiation.
That is, consumers are aware of the brand but choose to shop elsewhere.
In theory, the brand then becomes old and stagnant which returns it to the first pillar pattern.
Apple’s Brand asset valuator model case study
Apple has a business model that is divided into products and services. Apple generated over $394 billion in revenues in 2022, of which $205.5 came from iPhone sales, $40 billion came from Mac sales, over $41 billion came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $29.3 billion came from iPad sales, and $78.13 billion came from services.
Let’s conclude the research by taking a look at a brand asset valuator model case study involving tech company Apple.
The Apple brand is the most valuable in the world, so it is perhaps obvious that the company occupies the leadership quadrant explained above which embodies characteristics of all four pillars.
To better understand Apple’s dominance as a brand, we’ll delve into each of the four pillars in more detail below.
Differentiation
Apple can capture attention in the cultural landscape like no other. In a now-infamous 1997 speech announcing Apple’s rebirth, CEO Steve Jobs introduced the mantra “Think Different” to his colleagues and employees.
Brand differentiation for Apple is mostly due to product design, which has been a hallmark of the company since it was founded.
When the iMac, iPod, iPad, and iPhone were released, there was nothing else on the market that could match these products for their intuitive and streamlined functionality.
Pricing is also used to differentiate the Apple brand. While most manufacturers of consumer electronics sell lower-priced goods at higher volumes for slimmer profit margins, most of Apple’s products occupy the premium end of the market with a price proportionate to quality.
Since the company has a loyal and devoted customer base, it can charge higher prices and command more attractive profit margins as a result.
According to consultancy company Prophet, Apple earned near-perfect scores in the following characteristics of brand relevance:
Ruthless pragmatism
Apple is a brand that continually tries to make consumers’ lives easier with consistent brand experiences and products.
Distinctively inspired
The company is trustworthy, inspiring, and modern, with a purpose to create product products that enrich the lives of its users.
Pervasively innovative
Apple is always innovating to maintain its competitive advantage and meet unmet consumer needs.
Customer obsessed
Lastly, Apple knows what matters most to its customers and finds ways to deliver.
Apple’s brand relevance became even most robust as technology use became a necessity during the pandemic.
Esteem
The public perception of the Apple brand is extremely favorable in terms of product quality and popularity.
This increases perceived value which, as we discussed earlier, means customers are willing to pay a higher price for Apple products.
Product quality has obvious connotations for perceived value, but the status afforded to consumers who own Apple products also increases brand esteem in a no less significant way.
The brand asset valuator model also measures brand esteem according to the extent to which quality and popularity differ by country or culture.
Having said that, the Apple brand is most popular in wealthy markets where consumers have more disposable income.
In less developed countries, Android and a slew of smaller competitors tend to be more popular.
Knowledge
Apple has carefully and methodically built its brand for over 40 years and has consistently delivered innovative products that have enriched consumers and society as a whole.
The company has a core identity that consumers understand and are intimate with.
This has been facilitated by consistent brand attributes that have remained more or less the same throughout the company’s history. These attributes include:
Progressive.
Up to date.
Worth more.
Intelligent, and
Innovative.
Apple’s logo and the lowercase “i” it places before its product names are also instantly recognizable.
This increases the sense of intimacy between consumers and what is a profoundly humanistic company that supports worthy causes, communities, and people.
Pepsi Brand asset valuator model case study
PepsiCo was founded in 1902 by American pharmacist and businessman Caleb Bradham as the Pepsi-Cola Company. Bradham, who hoped to emulate the success of Coca-Cola, marketed the beverage from his pharmacy and registered a patent for its recipe the following year.
In the second brand asset valuator case study, we will take a look at Pepsi.
Like Apple and other world brands, Pepsi embodies aspects of each of the four pillars and thus occupies the model’s leadership quadrant.
Differentiation
Pepsi and Coca-Cola have been locked in a battle known as the Cola Wars for decades, so how does Pepsi differentiate its core products?
At the most simplistic level, Pepsi’s cola drinks have a distinct citrus overtone while Coca-Cola has more of a vanilla-raisin flavor.
In many blind tests, however, consumers are unable to tell the difference between the two.
This fact makes brand differentiation particularly important for Pepsi which is positioned as more youthful and energetic than its main competitor.
This characteristic aligns with the company’s high sugar, high caffeine drinks that appeal to younger generations of consumers who love sports, music, and having fun.
Relevance
Pepsi was founded in 1965 and, despite multiple brand transformations over the years, has managed to stay relevant among its target audience.
This enables the company to tell stories that resonate with consumers on popular topics such as cricket, music, and Bollywood.
Moving forward, Pepsi’s brand relevance will enable it to reflect the confidence, swag, energy, and self-belief of Indian Gen Z and millennials.
Esteem
Pepsi is one of the most valuable soft drink brands in the world with an estimated value in this segment alone of around $14 billion.
To some extent, brand esteem has increased because of the introduction of healthier drink options and a renewed focus on sustainability.
But more interestingly, the company uses product packaging to differentiate its portfolio of 22 brands with a value of over $1 billion.
Pepsi understands the connection between attractive product packaging and perceived consumer value, and, for this reason, periodically refreshes each brand to ensure it is on-trend.
The immense popularity of Pepsi around the world is also supported by a vast advertising budget where products are promoted by celebrities and at high-profile events.
In a 2021 study conducted by Real Research Media, over 82% of respondents were aware of the Pepsi brand with over 72% consuming the beverage.
Knowledge
In a separate evaluation of brand intimacy in the beverage industry during COVID-19, research firm MBLM found that Pepsi occupied the number 2 spot behind Coca-Cola.
To measure brand intimacy, MBLM analyzed what it called the “can’t live without” measure to determine how essential the brand was in consumers’ lives.
Pepsi scored well because it provided continued comfort and gratification throughout the pandemic and, as many consumers returned to bars and restaurants, they enjoyed experiencing the Pepsi brand in more traditional contexts.
Key takeaways
The brand asset valuator model measures brand value as a logical progression based on consumer perceptions. The model is underpinned by extensive consumer research data.
The brand asset valuator model is based on four pillars: differentiation, relevance, esteem, and knowledge. New brands start in the differentiation phase and progress to the knowledge phase.
The brand asset valuator model power grid plots the relative strength or weakness of a brand. This allows the business to determine its overall brand equity and strategize accordingly.
Account-based marketing (ABM) is a strategy where the marketing and sales departments come together to create personalized buying experiences for high-value accounts. Account-based marketing is a business-to-business (B2B) approach in which marketing and sales teams work together to target high-value accounts and turn them into customers.
Ad Ops – also known as Digital Ad Operations – refers to systems and processes that support digital advertisements’ delivery and management. The concept describes any process that helps a marketing team manage, run, or optimize ad campaigns, making them an integrating part of the business operations.
Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.
Affinity marketing involves a partnership between two or more businesses to sell more products. Note that this is a mutually beneficial arrangement where one brand can extend its reach and enhance its credibility in association with the other.
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.
The bullseye framework is a simple method that enables you to prioritize the marketing channels that will make your company gain traction. The main logic of the bullseye framework is to find the marketing channels that work and prioritize them.
Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.
According to inbound marketing platform HubSpot, brand dilution occurs “when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product the company develops in an industry that they don’t have any market share in.” Brand dilution, therefore, occurs when a brand decreases in value after the company releases a product that does not align with its vision, mission, or skillset.
The brand essence wheel is a templated approach businesses can use to better understand their brand. The brand essence wheel has obvious implications for external brand strategy. However, it is equally important in simplifying brand strategy for employees without a strong marketing background. Although many variations of the brand essence wheel exist, a comprehensive wheel incorporates information from five categories: attributes, benefits, values, personality, brand essence.
The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.
Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.
Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.
Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.
One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.
Customer segmentation is a marketing method that divides the customers in sub-groups, that share similar characteristics. Thus, product, marketing and engineering teams can center the strategy from go-to-market to product development and communication around each sub-group. Customer segments can be broken down is several ways, such as demographics, geography, psychographics and more.
Developer marketing encompasses tactics designed to grow awareness and adopt software tools, solutions, and SaaS platforms. Developer marketing has become the standard among software companies with a platform component, where developers can build applications on top of the core software or open software. Therefore, engaging developer communities has become a key element of marketing for many digital businesses.
A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
Field marketing is a general term that encompasses face-to-face marketing activities carried out in the field. These activities may include street promotions, conferences, sales, and various forms of experiential marketing. Field marketing, therefore, refers to any marketing activity that is performed in the field.
interaction with a brand until they become a paid customer and beyond.
Funnel marketing is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. The notion of a customer embarking on a journey when interacting with a brand was first proposed by Elias St. Elmo Lewis in 1898.
Funnel marketing typically considers three stages of a non-linear marketing funnel. These are top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU). Particular marketing strategies at each stage are adapted to the level of familiarity the consumer has with a brand.
A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.
The term “greenwashing” was first coined by environmentalist Jay Westerveld in 1986 at a time when most consumers received their news from television, radio, and print media. Some companies took advantage of limited public access to information by portraying themselves as environmental stewards – even when their actions proved otherwise. Greenwashing is a deceptive marketing practice where a company makes unsubstantiated claims about an environmentally-friendly product or service.
Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience.
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.
Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase.
Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s.
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.
Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.
The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.
Marketing myopia is the nearsighted focus on selling goods and services at the expense of consumer needs. Marketing myopia was coined by Harvard Business School professor Theodore Levitt in 1960. Originally, Levitt described the concept in the context of organizations in high-growth industries that become complacent in their belief that such industries never fail.
Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.
Meme marketing is any marketing strategy that uses memes to promote a brand. The term “meme” itself was popularized by author Richard Dawkins over 50 years later in his 1976 book The Selfish Gene. In the book, Dawkins described how ideas evolved and were shared across different cultures. The internet has enabled this exchange to occur at an exponential rate, with the first modern memes emerging in the late 1990s and early 2000s.
Microtargeting is a marketing strategy that utilizes consumer demographic data to identify the interests of a very specific group of individuals. Like most marketing strategies, the goal of microtargeting is to positively influence consumer behavior.
Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.
Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.
The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others.
Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data.
Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.
Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure.
A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
We can define pull and push marketing from the perspective of the target audience or customers. In push marketing, as the name suggests, you’re promoting a product so that consumers can see it. In a pull strategy, consumers might look for your product or service drawn by its brand.
Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand.
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.
Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer.
Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation.
Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce.
Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.
Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies.
360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
