This method uses an ingenious way of tackling the brand equity problem. Let us suppose that there are totally hundred consumers of toothpaste in the country. Of these, 65 use Colgate, 20 use Close-up, 10 use Promise and 5 use Babool. We also assume that there are only 4 toothpastes in the market.
|
Brand |
Prices (Rs. per 100 gm) |
No. of people using |
|
Colgate |
17.40 |
65 |
|
Close-Up |
22.50 |
20 |
|
Promise |
17-40 |
5 |
|
Babool |
14-60 |
10 |
What are the prices at which the market share for each of these brands is equal? It is obvious that Colgate is the most popular brand. But when its price is raised beyond a point, people will switch from Colgate to other brands. What is the point at which 40 people switch from Colgate and distribute themselves among the other brands equitably. This situation is shown in the fallowing table:
|
Brand |
Prices |
No. of people using |
|
Colgate |
24-50 |
25 |
|
Close-Up |
23-00 |
25 |
|
Promise |
17-50 |
25 |
|
Babool |
14-60 |
25 |
At this point, we have forced a situation market shares are equal. The prices here straight away give an indication of brand equity. If we divide the prices in paise by ten we get the numbers in the brand equity map. In other words, the brand equity of Colgate is equal to 245 while that of Babool is 146.
