How To Measure The Value Of Brand Premium

The topic of this paper is to use a new method to measure the brand premium. Brand premium is one of the most important aspects of marketing and brand management, and some new measure methods are also built to make it perfect. Compared to the method using discrete choice model and originate from customer in my paper, the traditional methods of measuring are on the side of subjective and macro view. Its merit is that how we can measure brand premium can be based on the micro foundation-customer. A customer can make his or her own decision on what he or she need in the market, when all the customers do this, the market share of every brand can be established. This paper take toothpaste industry as an example, apply the random coefficient model as the basic model, this is to mean we can not only estimate the coefficient's average value, but also its standard error. This can make us getting an estimated market share with probability, not a fixed value when we predict one of the brand's market share. There is no doubt that the latter is better than the former. At the end of this paper, the effect of traditional method and the model used in this paper are compared with each other, the result is that the discrete choice model is better than the traditional one in accuracy.