pepsi brand equity measurement

1 | P a g e

PEPSI BRAND EQUITY PRAXIS BUSINESS SCHOOL

Pepsi Brand Tracker (Project2 Part2 Brand Equity Measurement)

PPRRAAXXIISS BBUUSSIINNEESSSS SSCCHHOOOOll

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

2 | P a g e


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.

3 | P a g e


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

4 | P a g e


1 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.

5 | P a g e


2 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.

6 | P a g e


3 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.

7 | P a g e


5 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.

8 | P a g e


6 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 Fizz Tagline Low Calorie Content Flavour Advertisement Brands

Pepsi Fanta Sprite Thums Up Coca Cola

9 | P a g e


6. Which of these qualities will you associate with the following brands? (Non attribute Preference)

Qualities Cool Powerful Classy Innovative

Brands Pepsi Fanta Sprite Thums Up Coca Cola

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

Categories Car Beer Condom Deodorant Apparels Paints Mouth Wash Shampoo Airlines TV

Brands

Pepsi

Fanta

Sprite

Thums Up

Coca Cola

8. If the following brand of cold drink is not available will you shift to another brand? (Buying

behaviour)

Brands YES NO Pepsi Fanta Sprite

Thums Up Coca cola

10 | P a g e


7 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.

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.

Pepsi Fanta Sprite Thums Up Coca cola

3

1

2

5

4

Brand Knowledge

Score

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.

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.

37%

0%10%

53%

0%

Attribute Importance

Percentage

Pepsi Fanta Sprite Thumps up Coca cola

15

55 57

142

32

Attribute Association

Score

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.

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.


3

1

4

2

5

Brand Association

Score

13 | P a g e


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.

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.


1

3

4

5

2

Buying Behaviour

Score


4

1

3

2

5

Brand Leveragibility

Score

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.

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.

8 Pepsi Brand Equity

Break up of Brand Equity for the brand Pepsi


12

9

1719 18

Brand Equity

Cumulative Score

3

1

34

1

Pepsi Brand Equity

Score

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.

9 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.

16 | P a g e


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

http://www.brandequity.com/

http://www.netmba.com/marketing/brand/equity

http://www.brandcoolmarketing.com/equity-measure.html

pepsi brand equity measurement

Documents