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Study: CE Brand Value Varies By Product Category

In consumers’ minds, brand awareness does not necessarily equate to brand value, and a brand’s value can vary greatly by product category.

Those are among the chief findings of a new consumer research study by marketing consultancy Coyote Insight, based here. The group’s inaugural Coyote Insight Brand Value project (CIBV) surveyed 2,500 recent purchasers and purchase intenders to measure the value that more than 50 brands hold for five different CE products.

The results indicate that contrary to popular belief, consumers do not regard CE brands equally across all product categories. “We suspected that the industry overgeneralizes the value of many brands, that it assumes that their perceived value within one category would be similar for another, but that is decidedly not true,” said Bill Matthies, a Coyote Insight partner. Acting on that false assumption, he said, results in lost opportunities for both sales and profit.

To determine brand value, Coyote Insight surveyed 500 shoppers for each of five products: 50W-inch flat panel TVs; home-theater-in-a-box (HTiB); 6.1 A/V receivers; vehicle multimedia systems; and car audio head units. For each product, respondents assessed five criteria that make a brand valuable: People know about it, think highly of it, aspire to own it, will pay more to own it, and retailers recommend it.

“Many think of brand awareness as a surrogate for brand value, but that is not the case,” explained Coyote Insight partner Grace Post. “There are numerous examples of brands that many consumers know about but will not buy or pay more to own. The inverse is true as well. Not paying attention to all five criteria is the downfall of many brands that could have done better.”

“Clearly, Sony’s 180-percent rating for vehicle multimedia looks great,” says Post, “until you consider it relative to Alpine, at 114 percent (see chart). Although Sony’s rating is better, this example of narrow ‘spread’ suggests that all five top brands have high brand value, mitigating each other’s ability to separate themselves from the pack.”

Conversely, she said, with its nearly two-to-one lead over fifth-ranked Kenwood, the potential for significant increases in both sales and profit for Alpine head units “is very real.”

The results also indicate that each of the five brand value components varies in importance between products. According to Post, the key to understanding brand value begins with understanding these inherent differences, as what is important for one product is not necessarily so for others.

“Manufacturers spend a lot of money promoting their brands, as do retailers, and this data shows that the return on investment on those expenditures is not at all equal,” she said. For example, the importance of a dealer recommendation for vehicle multimedia is far greater than it is for other products, while price promotions are more important for HTiB and much less so for flat-panel TV.

Coyote Insight will repeat the CIBV study in spring 2005 for the original five products as well as more than 20 additional products from the computing, personal communication, home and vehicle entertainment categories. For further information, contact Matthies at (714) 626-0680, or Post at (714) 626-0682.

Top 5 Brands by Product

Value Rankings Based on Consumer Surveys