Pepsi Brand Equity Measurement

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Pepsi Brand Tracker (Project2 Part2 Brand Equity Measurement)

PRAXIS BUSINESS SCHOOl

A report Submitted to Prof. Srinivas Govindrajan In partial fulfilment of the requirements of the course Product and Brand Management On 03/08/09 BY Apoorva Jain Gunjan Dugar Hardik Mishra Manoj Mani Iyer PEPSI BRAND EQUITY

PRAXIS BUSINESS SCHOOL

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Executive Summary The objective of this project was to find out the brand equity of Pepsi . The parameters which enabled us to arrive at the brand equity were Brand Knowledge, Brand Vitality, Brand Association, Brand Leveragability and Buying Behaviour. For this purpose we did a survey where we interviewed thirty respondents on the basis of our questionnaire. The questionnaire comprised eight questions covering the above mentioned parameters. The next step dealt with ranking the brands and giving scores based on the rank achieved. The cumulative score of the brand formed the basis of arriving at the Brand Equity. Our brand Pepsi did reasonably well on the parameters Brand Leveragability (Rank 2), Brand Knowledge(Rank 3) and Brand Association(Rank 3) but could not stand up to the test of Brand Vitality(Rank 5), and Buying Behaviour (Rank 5). Overall, Pepsi ranked fourth on Brand Equity, considering all the parameters used to arrive at it. The suggestions that we could come up with for enhancing its Brand Equity were that, Pepsi needs to reposition itself as a promising brand to increase the repeat purchase. Pepsi as a brand is capable of leveraging and should leverage its name to other products like Beer, Condom, Shampoo and Apparel. It is capable of diversifying and should cash on this opportunity.

PEPSI BRAND EQUITY

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TABLE OF CONTENTS

TOPICS

Pg. No.

1. Introduction

4

2. Brand equity measurement model

5

3. Rationale

6

4. Assumptions

6

5. Research Methodology

7

6. Questionnaire

8

7. Findings

10

8. Pepsi brand equity

14

9. Suggestions

15

10. Bibliography

16

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INTRODUCTION

Brand equity is outcome that accrue to a need/want satisfier when the brand name is added on. It is the incremental contribution (Money) per year obtained by the brand in comparison to the underlying product (or service). The incremental contribution is driven by the individual customer’s incremental choice probability for the brand in comparison to his or her choice probability for the underlying product with no brand-building efforts. The method provides what-if analysis capabilities to predict the likely impacts of alternative strategies to enhance a brand’s equity. Brand equity is one of the more popular concepts in marketing today. It is also one of the most used terms in marketing research, and the subject of much fuzzy thinking. In fact, there are several definitions of brand equity, all of which stem from the concept of 'brand.' A useful definition is that a brand is the sum total of all that is known, thought, felt and perceived about your company, service or product. Branding, then, is the process of making products and companies into brands the consistent and disciplined way a company communicates a brand's essence to the public. Consumers' response to the brand revolves around the brand's image. This makes the concept an essential input into marketing strategy since a positive, strong brand image will presumably lead to choosing a particular brand.  Achieving strong brand differentiation is absolutely fundamental to building a compelling brand relationship with customers.  Brand equity can be thought of as the differential effect of brand knowledge on consumer response to the marketing of the brand.  Fundamentally, high levels of brand awareness and a positive brand image should increase the probability of brand choice. That is the fundamental goal of managing one's brand.  Brand equity only exists as a function of consumer choice in the marketplace. And although marketing and communications efforts can create and change brand images, brand equity comes into being when a consumer chooses a product or service.

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Brand Equity Measurement Model

In this model we tried to basically cover all the factors which influences the buying decision of the consumer which in turn constituted the brand equity. Parameters taken  Brand Knowledge  Brand Vitality  Brand Association  Brand Leveragability  Buying Behaviour

We would be ranking the brands based on the scores achieved and then will be giving scores based on the rank achieved and the cumulative score of the brand would be the equity of the brand. Brand Knowledge : Will be analysing percentage of respondents aware of the brand and giving scores based on the rank the brand has got among the brands the customer is aware of. Brand Vitality : In this we would be analysing the attribute that the customer perceives to be there in the product and buys it then would move on to the brands which has got that most important attribute as per the customer perception. Brand Association: In this we would be analysing what and how much are the intangible factors that a particular brand has compared to the other brands the customer is aware of which pulls the customer towards it. Brand Leveragability : We would be analysing the potential of the brand to extend to related, or even unrelated, product categories. Buying Behaviour : We would basically be judging the customer loyalty towards a particular brand by having availability as a factor.

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RATIONALE

 To measure the equity of the brand Pepsi we had to come up with a model that brings out the overall perception of the consumer towards the brand which influences their purchase, since the base product we were dealing with was cold drink, where the prices of all the brands are the same thus a model defining the premium that a brand can charge was not that relevant.  Brand Equity of a brand is one of the most important aspect if the company wants to know how well the brand overall is being perceived by the consumer and what are the deciding factors in consumers purchasing the product  The reason behind splitting it among various factors was to get a clear picture of which is the most crucial aspect that drives the demand for the base product, thereby checking it brand wise and then we can easily extend the findings for the brand and conclude where the brand is doing well and what needs to be done to emerge as a leader in the pack.  We would be assigning scores to each of the parameter based on the performance of each of the brand in questions clubbed under one particular parameter and then can arrive at one figure constituting brand equity.

4

ASSUMPTIONS

 From the brand’s point of view, the factors taken to build this model have been assumed to have equal importance, thus we have given equal weightage to each of these parameters.  We have taken the 4 most common brands recalled by the consumers to be our competitors.

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RESEARCH METHODOLOGY

Exploratory research: Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Exploratory research is a type of research conducted because a problem has not been clearly defined. Exploratory research helps determine the best research design, data collection method and selection of subjects. Given its fundamental nature, exploratory research often concludes that a perceived problem does not actually exist. Data collection: In this study internal and external source for data collection had been used. In this process the following two types of data comes into picture.  Primary data.  Secondary data. Primary data: All the primary data for the purpose of the study were obtained by interviewing the consumers with the help of a questionnaire. Questionnaire was framed on the basis of product & its competition. The questions were designed in such a way as to elicit maximum information and data. Secondary data: Secondary data has been collected by through books & websites. Respondents: The respondents are consumers of all age groups. Sample Size: The sample size was taken as 30 respondents. Sampling Scheme: The sampling technique adopted was “simple random sampling”. As the universe is the mass and surveying everyone is not possible. Data Analysis : For each of the question under the parameters we ranked the brands and then gave weights to the rank achieved by the brands, then the cumulative score achieved by the brand constituted the brand equity score.

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Questionnaire

1. Name five brands that comes to your mind when you think of cold drinks? (Brand Knowledge)

2. Identify the Cold drink brands from the taglines mentioned below? (Brand Knowledge)

Sl. No.

Taglines

Brands

1

Aap muskurayenge, bulbule gungunayenge

2

Yeh hai youngistaan meri jaan

3

Seedi Baat, No bakwaas, Clear hai

4

Taste the thunder

5

______ ka Signal loud, Bunking is allowed

3. Identify the following brands logos from the respective product design. Refer to sample graphics below. (Brand Knowledge)

A

B

C

D

E

4. Rank the following attributes in order of importance to buy a cold drink (Attribute Preference) Fizz

Tagline

Low Calorie Content

Flavor

Advertisement

5. Which is the one attribute you strongly associate with each of the following brands. (Attribute Preference) Qualities Brands Pepsi Fanta Sprite Thums Up Coca Cola

Fizz

Tagline

PEPSI BRAND EQUITY

Low Calorie Content

Flavour

Advertisement

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9|Page 6. Which of these qualities will you associate with the following brands? (Non attribute Preference) Qualities Brands Pepsi Fanta Sprite Thums Up Coca Cola

Cool

Powerful

Classy

Innovative

7. Which of the following products will you buy if offered by the following brands (leveragability)

Categories Brands Pepsi Fanta Sprite Thums Up Coca Cola

Car

Beer

Condom

Deodorant

Apparels

Paints

Mouth Wash

Shampoo

Airlines

TV

8. If the following brand of cold drink is not available will you shift to another brand? (Buying behaviour) Brands Pepsi Fanta Sprite Thums Up Coca cola

PEPSI BRAND EQUITY

YES

NO

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FINDINGS

Brand Knowledge Brand Knowledge was the first parameter in calculating the Brand Equity of Pepsi. In this we asked three questions testing the respondents on Top Of Mind Recall, Tagline recognition of each brand and logo recognition of each brand. This would give an idea of the amount of knowledge consumer has got in the brand which corresponds to the degree of interest each brand is able to generate in the mind of consumer.

Brand Knowledge Score 5 4

3 2 1

Pepsi

Fanta

Sprite

Thums Up

Coca cola

In the above table the scores are the cumulative scores of 3 questions asked in this parameter. Here the leader is Thumps Up followed by Coca Cola and then Pepsi Thus we can conclude that Brand Knowledge vice Pepsi is in the top three brands. This is indicating that the Pepsi is enjoying a reasonable amount of Brand Knowledge.

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11 | P a g e Brand Vitality In this parameter we wanted to know which is that most important attribute that makes the consumer buy the base product in first case so that we could extend this finding to each of the brand which would tell us how the respondents perceive about the presence of that attribute in each of the brand.

Attribute Importance Percentage 53% 37% 0%

10%

0%

In the above table we had come up these five attributes about cold drink and asked the respondents to tell us the most important attribute that they think should be there in any cold drink. Flavour emerged as most important attribute, as more that 50% of respondents chose this over any other attribute, followed by Fizz which was voted by 37% of respondents This was followed by the question of attribute association where we asked the respondent to judge which attribute they think the brand display strongly.

Attribute Association Score 142

55

57 32

15

Pepsi

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Fanta

Sprite

Thumps up

Coca cola

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12 | P a g e Since Flavour and Fizz was voted by 90% of the respondents we gave weightage of 5 and 4 respectively to the attributes and derived the above score, here Thums up is clearly the leader by a huge margin followed by Sprite, Fanta and Coca Cola, Pepsi here was the last which clearly shows that the brand is not taken as something which is high on relevance. Brand Association In this we wanted to know besides the attribute how the brands are perceived in terms of other intangible factors. The factors asked were Cool, Powerful, Classy & Innovative.

Brand Association Score 5 4 3 2 1

Pepsi

Fanta

Sprite

Thums Up

Coca cola

As per the above table Coca Cola emerged to be the leader in this parameter followed by Sprite, Pepsi, Thums up & then by Fanta. Buying Behaviour To understand the buying behavior of the respondents we asked them if they go to buy a cold drink brand and the brand is not available will they shift to another brand or look for the same brand at another shop. This will give us an idea of which brand has highest number of loyal customers. We got the following result.

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Buying Behaviour Score 5 4 3 2 1

Pepsi

Fanta

Sprite

Thums Up

Coca Cola

After doing the analysis we found that Thums Up has the highest number of loyal customers followed by Sprite. Pepsi has the least number of loyal customers. Brand Leveragability To decide the leveragability of cold drink brands, we chose 9 very different products (From car to shampoo to paints to condom) and asked the customer if all the brands of cold drink manufacture these products then which brand’s product will they purchase. We got the following result.

Brand Leveragibility Score 5 4 3 2 1

Pepsi

Fanta

Sprite

Thums Up

Coca Cola

From the above findings we can conclude that Coca Cola is the most leveragible brand followed by Pepsi. It is important to note that the respondent thought that Pepsi can do well if they manufacture condom, apparels, beer and shampoo.

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14 | P a g e Brand Equity After analysing each of the parameter we calculated the scores of Brand Equity for all the brands we had considered by totalling the scores of the brands achieved.

Brand Equity Cumulative Score 19

17

18

12 9

Pepsi

Fanta

Sprite

Thums Up

Coca cola

In the above table the cumulative scores for each of the brand is given where Thums up is the leader followed closely by Coca Cola, Sprite, Pepsi and Fanta.

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Pepsi Brand Equity

Break up of Brand Equity for the brand Pepsi

Pepsi Brand Equity Score 4 3

3 1

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15 | P a g e In the above table we get the breakup of the contribution by each of the parameter towards the brand equity of Pepsi. Findings of Pepsi Brand Equity Pepsi as a brand has done reasonably well in the parameter Brand Knowledge by securing third position and in Brand Leveragability by securing second position. Thus we can infer that the respondents can differentiate Pepsi as a brand from other brands and could easily relate it to other products as different as Cars and Shampoo. However in the parameter Brand Vitality Pepsi is the last among the total brands indicating that the respondents see the brand Pepsi as a brand which is very low in Relevance, where as in the parameter buying behaviour where we had checked the loyalty of the respondents towards the brands where the brand Pepsi again was the last indicating that although the respondents are able to distinguish the brand, they don’t see the brand as a need/want satisfier. In Brand Association where we had chosen four other factors besides the product attribute, Pepsi was ranked third among the other brands, this indicates that the brand has got promise in terms of the overall brand image and respondent still associate good qualities with the brand name.

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Suggestions

 Pepsi would need to reposition itself as a brand promising the most important attribute respondent

associate with any cold drink which would in turn increase the repeat purchase of the brand.  It can leverage its name to other products like Beer, Condom Shampoo & Apparels if it is considering

to diversify.  Majority of the respondents associate Pepsi as a brand as very innovative, thus it would do well to

keep up to that positioning.

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10 BIBLIOGRAPHY Books Referred Marketing Management by Keller & Kotler Sites www.brandequity.com www.netmba.com/marketing/brand/equity www.brandcoolmarketing.com/equity-measure.html

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