Brand Key Performance Indicators as a Force for Brand Equity Management Joel Rubinson University of Chicago Markus Pfeiffer University of Munich ABSTRACT A measurable framework for brand equity is presented that links together financial performance, loyalty, and attitudinal dimensions and for understanding the impact of a corporate brand on sub-brands that share the same name. This study describes specific key performance indicator measures and, most importantly, how to intelligently set targets for each measure, so that marketers can track and manage the success of their brands. A case history for a large European telecommunications company is presented that shows how this framework produced a very different view of the health of the company's brands versus prior research, one that was ultimately accepted as correct. This study discusses organizational problems the CMO had to address as he tried to implement this new framework, and how to generalize this approach to other industries. I NTRODUCTI ON Imagine the branding challenges that a CMO might face as he or she first joins a new company. The CMO is likely to start by taking stock of how brands are managed by each division and brand group. What they are likely to find is that each group operates in a silo and has evolved different brand practices over time. The brand strategy templates and planning processes probably are different (or nonexistent) across groups. Some brands will have recent brand strategy work and others will not. The methods and measures that each division uses to track brand performance usually are inconsistent and probably sub-optimal. Some divisions might conduct brand trackers that produce key performance indicators (KPI), while others do not. Among those that do, they probably are using different research protocols and tracking different measures as the key indicators of brand success. The lack of corporate consistency is almost certain to exist for multinationals across countries. Finally, it is also likely that there is no corporate level management of the customer, because the divisions are siloed. Hence, silos prevent customer-centric thinking from taking root because a complete view of the relationship that the company has with the customer is probably not being obtained. The problem is compounded when there is a “Master Brand,” that is, a corporate brand name that is part of the brand name for each sub- brand, service, and specific offering. Examples of this kind of brand architecture include Virgin (Virgin Mobil, Virgin Atlantic, Virgin Megastores), Sony (what don't they make?), and Verizon (fixed line service, DSL, wireless). It is likely that the corporate brand has been pulled in different directions by the way that each sub-brand has evolved. Because the corporate brand often is not marketed (e.g., a customer cannot subscribe to “Verizon”; they subscribe to Verizon WIRELESS, DSL, etc.), it might not even have a brand strategy, leaving that up to the sub-brands with some form of loose cooperation. The CMO must provide leadership to the organization for defining how the marketing function can help the company win in the marketplace. This means the CMO must provide a compelling framework for how to create well-positioned brands, how to market them efficiently, and how to establish proper KPIs, along with relevant targets for these KPIs, to drive the organization to brand success. For a company to effectively manage and grow its brand equity, it must develop a framework for understanding how brand equity contributes to financial performance, and then operationalize this framework with a measurement system and a way to set targets for key measures. Then, the CMO must orchestrate organizational buy-in from senior management both at the corporate and divisional levels to play by the rules of this system. In this article, the authors propose a measurable framework for brand equity and present a modeling approach for linking together the dimensions of brand equity so targets can be set in a way that is consistent with financial goals. Then, we give a case example where the corporate marketing function was able to establish a brand equity management system that significantly impacted the culture and metrics across the company. A FRAMEWORK FOR BRAND EQUI TY Conceptualization Following the work of Keller, we define “brand equity” as “the differential consumer response from knowing the brand” (Keller, 2003) This definition, which probably should win an award as the shortest published definition of brand equity, packs a lot of punch into these eight words. In a way, our framework could be called the “linkage” theory of brand equity because of how it emphasizes the connections between aspects of brand equity. Figure 1 illustrates typical brand equity profiles that we have seen time and time again. The performance relationship of a leading brand versus a number two brand, etc. suggests that key dimensions of brand equity are linked together in a kind Journal of Advertising Research Vol. 45, No. 2, June 2005 pp 187-197 DOI : 10.1017/S0021849905050208 www.journalofadvertisingresearch.com