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 agency interviewed over 100,000 consumers in 32 countries to gauge their perception of more than 13,000 brands.
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 describes the growth potential of a brand and includes:
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.
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 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:
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.
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:
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.
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.
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.
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
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.
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.
In 2021, it was announced that Apple was the most relevant brand to consumers for the sixth year running after a survey involving 13,000 consumers and 228 brands.
According to consultancy company Prophet, Apple earned near-perfect scores in the following characteristics of brand relevance:
Apple is a brand that continually tries to make consumers’ lives easier with consistent brand experiences and products.
The company is trustworthy, inspiring, and modern, with a purpose to create product products that enrich the lives of its users.
Apple is always innovating to maintain its competitive advantage and meet unmet consumer needs.
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.
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.
Considering Apple is the world’s most valuable brand with the App Store available in 175 countries and regions, these traits likely differ less when compared to other brands.
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.
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:
- Up to date.
- Worth more.
- Intelligent, and
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
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.
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.
Pepsi was founded in 1965 and, despite multiple brand transformations over the years, has managed to stay relevant among its target audience.
In India where it posted three consecutive months of double-digit growth in Q2 2022, Pepsi performs extensive consumer research to ensure it is always abreast of pop culture trends.
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.
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.
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.
- 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.
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