BRAND EQUITY
DR. SAMAR TURKI
OUTLINES
 Introduction.
 A brief history of Brand and Branding
 Defining and conceptualizing brand and brand equity
 The concept of Brand Equity.
 Purpose of Branding
 Types of Brands
 Guidelines for Building Strong Brands
 The Difference Between Brand Equity and Brand Value.
 Elements & Components of Brand Equity.
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OUTLINES
 How to Build Brand Equity
 The brand equity Dimensions
 Brand Equity Model.
 Measuring brand Equity.
 Brand Equity Examples.
 Benefit of brand Equity.
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Introduction
■ The brand is an important part of marketing in the present business environment.
■ Branding has been around for centuries as a means to distinguish the goods of one producer to
those of another competitors by creating a recognizable and memorable image. The earliest signs
of branding can be traced to Europe where the medieval guilds required that craftsmen put
trademarks on their product to protect themselves and producer against inferior quality
substitutes. Also in fine arts branding began with artists signing their works. Brands today play a
number of important roles that improve the consumer’s lives and enhance the financial value of
firms.
■ The concept of brand equity has received much attention from marketers in both academia and
practice since the 1980s. brands play a very vital role in differentiating the company product from
that of competitors
■ Building strong brands has become a marketing priority for many organizations. Brand equity has
an important and strategic role in the gaining of competitive advantage.
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A brief history of Brand and Branding
A basic and essential function of brand and branding is differentiation. In a product category brand name allows the consumer
to differentiate one product from another – functionally and emotionally. Branding bricks in Egyptian kilns, putting a name on the
alcohol casks, branding cattle with a hot iron, craftspeople putting their trademark on their work are some examples of the
genesis of branding.
Brands started off as names/trademarks to differentiate one product from another, within a product category, and evolved to
have a meaning which was expressed in two ways. One from the brand creator‘s perspective – which was to create an entity
which would articulate a specific intention, feeling or vision with the consumer. The other was the consumer perspective – where
the message was interpreted and thus a brand became the sum of individual experiences. Brands then evolved further, where
they become the focus, and manifested itself on the unconscious individual and collective structures supporting it, where brands
then took on a life of their own and beyond the intentions of their creators or the interpretations of their consumers.
The "brand" concept evolved in the eighteenth century as the names and pictures of places of origin, and famous people
replaced many producers' names. The new purpose was to strengthen the association of the brand name with a product.
Producers wanted both to make their products easier for consumers to remember and to differentiate their products
Further from those of competitors. In the nineteenth century, a related purpose of branding emerged. A brand was used to
enhance a product's perceived value through such associations. The purposes and strategies of branding have evolved even
further in the twentieth century. Nevertheless, we find the early brand experiences relevant in addressing three critical
questions. First, how do you build a strong brand? Second, how do you sustain that brand over time? Third, how can you expand
a business by leveraging your brand?
Thus, brands play a key role for both the consumer and the firm. For the consumer it simplifies the buying decision by providing
easy identification, previous experience, symbolism and associations. For the firm it offers legal protection, means of endowing a
product with unique associations thereby being a source of competitive advantage and higher financial returns
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Defining and conceptualizing brand and brand equity
Brand Defined
The American Marketing Association defines brand as ―a name, term, sign, symbol, or design, or a combination of them
intended to identify the goods and services of one seller or group of sellers to differentiate them from those of competition.
A brand refers to a logo, name, design, term or any other feature that distinguishes a product from other products in the market.
A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision
to choose one product or service over another.
The brand has two functions :
1. To distinguish different products from each other
2. To certify a products origin
Branding
The conversion of a product to a brand is branding. Branding refers to endowing products and services with the power of a brand
.A firm‘s branding strategy reflects the number and nature of both common and distinctive brand elements it applies to the
products it sells .There is the physical side – brand name, logo, design elements and then the emotional connect that the brand
builds with the consumer. This is part of the marketing strategy. The primary focus of marketing strategy is to effectively allocate
and coordinate marketing resources and activities to accomplish the firm‘s objectives within a specific product market.
Therefore, the critical issue concerning the scope of a marketing strategy is specifying the target market(s) for a particular
product or product line. Next, firms seek competitive advantage and synergy through a well integrated program of marketing mix
elements (primarily the 4 Ps of product, price, place, promotions) tailored to the needs and wants of potential customer in the
target market.
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The Concept of Brand Equity
During the past few decades, brand equity has become one of the major areas of attention to
managers and marketing researchers owing to its major role as a significant intangible firm asset.
Many definitions of brand equity exist (table 1). One of the most widely accepted definitions states that
brand equity is the “added value endowed by the brand to the product” (Farquhar 1989). There are
some other definitions by other researchers as well. Aaker (1991) conceptualized brand equity as a set
of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the
value provided by a product or service to a firm and/or to that firm’s customers. Definition by Keller
(1993) focused on marketing; he described brand equity as “the differential effect of brand knowledge
on consumer response to the marketing of the brand”. Brand equity has also been defined as “the
enhancement in the perceived utility and Desirability a brand name confers on a product” (Lassar,
Mittal and Sharma 1995). Vázquez et al. (2002) mentioned that brand equity is the utility that the
consumer associates to the use and consumption of the brand. Clow and Baack (2005) pointed out
another definition: they considered brand equity as a set of characteristics that make a brand unique in
the marketplace, allows the company to charge a higher price and retain a greater market share than
would be possible with an unbranded product.
The Marketing Science Institute defines it as The set of associations and behavior on the part of a
brand's customers, channel members and parent corporation that permits the brand to earn greater
volume or greater margins than it could without the brand name and that gives the brand a strong,
sustainable, and differentiated advantage over competitors
Yoo et al define it as the difference in consumer choice between the focal branded product and an
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unbranded product given the same level of product features‘.
Definitions of brand equity
Researcher
Definition
Farquhar( 1989)
Added value endowed by the brand to the product
Aaker (1991)
Set of brand assets and liabilities linked to a brand, its name and
symbol that add to or subtract from the value provided by a product or
service to a firm and/or to that firm’s customers.
Keller (1993)
The differential effect of brand knowledge on consumer response to the
marketing of the brand
Simon and Sullivan (1993)
Cash flow differences between a scenario where the brand name is
added to a company product and another scenario where the same
product does not have brand name.
Rangaswamy et al., ( 1993)
Favorable impressions,
predilections
Yoo et al., (2000)
Vázquez et al., (2002)
attitudinal
dispositions,
and
behavioral
The difference in consumer choice between a branded and unbranded
product, given the same level of features
The utility that the consumer associates to the use and consumption of
the brand.
Table 1: Definitions of brand equity
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The Concept of Brand Equity
We can define and evaluate the brand equity from different perspectives, As Baalbaki (2012) mentioned brand equity can be
seen from three different perspectives, in next part we are going to discuss each of them,
Figure 1 : Brand Equity Perspectives
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1. Financial Perspective (Financial- Based Brand Equity)
Brand equity in the 1980s, as seen from the financial perspective, was viewed as a method that gave
managers guidance in understanding brand enhancement. In this perspective, the measures focused
on stock prices or brand replacement .Simon and Sullivan (1993) defined brand equity as “the
incremental cash flows which accrue to branded products over and above the cash flows which would
result from the sale of unbranded products”. Supporters of the financial perspective (FBBE) define
brand equity as the “total value of a brand which is a separable asset – when it is sold or included in a
balance sheet”. Wood (2000) discussed that from a financial perspective it is possible to give a
monetary value to the brand that can be useful for managers in case of merger, acquisition or
divestiture. Estimating a financial value for the brand is certainly useful but it does not help marketers
to understand the process of building brand equity. Wood (2000) believes that marketing perspective
of brand equity can help marketers to understand the brand in the minds of customers and to design
effective marketing programs to build the brand.
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2. Customer Perspective (Customer-Based Brand Equity)
Extant literature on brand equity has focused on the perspective of cognitive psychology (Christodoulides and de Chernatony,
2010) known as consumer-based brand equity. The customer-based brand equity (CBBE) approach is the dominant perspective
and the one preferred by a majority of academics and practitioners in marketing research because if a brand has no meaning or
value to the consumer it is ultimately meaningless to investors, manufacturers, or retailers .
The value of brand equity is determined from the perspectives, experiences and relationships of the consumers with respect to
the brand; hence, it is said to be consumer-focused.
Motameni (1998) also mentioned this perspective as a marketing perspective. He used the concept of brand equity in the
context of marketing decision-making. Keller (1993) used the term consumer-based brand equity to refer to brand equity and
noted that customer-based brand equity occurs when the consumer is familiar with the brand and holds some favourable, strong
and unique brand associations in their memory. Positive customer-based brand equity has many advantages like long term
revenues, customers’ willingness to seek out for themselves new channels of distribution, the ability of firms to command higher
prices and the effectiveness of marketing communications .
David A. Aaker considers that brand equity is “a set of brand assets and liabilities linked to a brand, its name and symbol that
add to or subtract from the value provided by a product or service to a firm/or to that firm’s customers.
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2. Customer Perspective (Customer-Based Brand Equity)
Brand equity defined as a set of assets or liabilities in the form of brand visibility, brand associations
and customer loyalty that add or subtract from the value of a current or potential product or service
driven by the brand.” (Aacker, 1991)
In simple terms, brand equity refers to how people, especially customers, perceive your brand. It’s a
customer experience determined by intangible attributes such as:
■ Brand visibility
■ Brand associations
■ Customer satisfaction
■ Customer loyalty
These attributes can either add or subtract from the value of your current (or future) products or
services. If you have positive brand equity, your customers regard your brand highly and are thus more
likely to do business with you. In contrast, if you have negative brand equity, your target audience would
rather avoid your brand.
Brand Equity is a qualitative measure of the brand’s positive recognition or goodwill in the minds of the
consumers considering the brand as an independent entity.
why Apple is such a valuable brand. They take time to understand their audience and create products
they know will resonate with their target audience. Known for pushing the envelope, Apple is always
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innovating new products. This makes their customers love them.
3.Employee Perspective (Employee-Based Brand Equity)
•
Youngbum Kwon (2013) discussed that the definitions of Employee-based brand equity and
Customer-based brand equity are similar in respect that they are both values that come from the
innate nature of the brand. Employee-based brand equity is defined from the employee
perspective and is based on the differential effect that brand knowledge has on an employee’s
response to his or her work environments and cultures (King and Grace, 2009).Youngbum Kwon
(2013) presented a three dimension model based on King and Grace (2009, 2010) and Aaker
(1991) research.
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3.Employee Perspective (Employee-Based Brand Equity)
The three dimensions are Brand knowledge, Role Clarity, Brand commitment. Cardy et al (2007)
argued that subjective and emotional employee judgments concerning an organization reflect brand
equity in the reflection of several following questions: what is the employee perception of an
organization’s reputation; does it convey a sense of respect to its members; does an individual
associate certain emotions, lifestyles, or experiences with an organization; has an employee forged an
organizational identity, or considered the firm a part of himself or herself .
All these questions describe subjective, intangible factors that imply developing an emotional tie with a
firm or its culture. In a marketing sense, brand equity results in increasing the positive feelings that
make one less likely to defect to a competing product. HRM can adopt the brand equity concept to
strengthen the psychological contract with employees and make them less likely to leave. According to
King and Grace (2009), Employee-based brand equity serves as a foundation to build Customer-based
brand equity because employees who understand and wholeheartedly endorse the organization’s
objectives deliver these values to their customers. In fact, employees are important resources for
company brand success
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Purpose of Branding
■ The purpose of branding is to create a powerful and lasting emotional
connection with customers and other audiences. A brand is a set of
elements or “brand assets” that in combination create a unique,
memorable, unmistakable, and valuable relationship between an
organization and its customers. The brand is carried by a set of
compelling visual, written and vocal tools to represent the business
plan and intentions of an organization.
■ Branding is the voice and image that represents your business plan to
the outside world. What your company, products and services stand
for should all be captured in your branding strategy, and represented
consistently throughout all your brand assets and in your daily
marketing activities
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Types of Brands
The type of brand used depends on the particular entity using it. The following are some of the most
common forms of brands:
■ Corporate Brands: Corporate branding is a way for companies to market themselves in order to
give themselves an edge against their competition. They make a series of important decisions in
order to accomplish this, such as pricing, mission, target market, and values.
■ Personal Brands: As mentioned above, branding isn't just for companies anymore. People use
tools like social media to build their own personas, thereby boosting their brands. This includes
regular social media posts, sharing images and videos, and conducting meet-and-greets.
■ Product Brands: This type of branding, which is also known as merchandise branding, involves
marketing one particular product. Branding a product requires market research and choosing the
proper target market.
■ Service Brands: This kind of branding applies to services, which often requires some creativity, as
you can't actually show services in a physical way.
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Guidelines for Building Strong Brands
Aaker (1996) and Keller (1998) suggest the following guidelines for building strong brands :
Table 2: Guidelines for Building Strong Brands
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The Difference Between Brand Equity and Brand Value
■ Brand equity and brand value may be different, but they can’t be separated. That’s because one of
the main ways to build brand value is to build your brand equity. If your target audience can
perceive your brand in a positive light, they’re likely to buy more from you. And that has a ripple
effect of driving your brand value up.(As brand equity leads to the creation of brand value, the
higher the equity, the higher the value).
■ If brand equity refers to the perception and emotions that customers have about your brand, what
then is brand value? Brand value is the financial worth of a brand. It is a measure of how much
brand is worth on the market. And it’s mainly calculated by measuring the value of your assets.
■ Brand value refers to the financial value of the brand. It is net present value of the future cash flows
that may be generated by the brand. To determine the brand value, companies need to determine
the worth of the brand in the market, i.e. how much an individual is willing to pay to buy the brand.
This value is determined by performing marketing and financial analysis.
■ Brand value is the financial estimate of how much a brand is worth and can be calculated when
taking into account the assets of the business on a balance sheet.
■ Brand equity refers to the importance of a brand in the customer’s eyes, while brand value is the
financial significance the brand carries. Brand value, on the other hand, is the financial worth of the
brand. how much the brand is worth in financial terms. This is calculated through the market and
answers the question: how much would it cost to purchase the brand?
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The Difference Between Brand Equity and Brand Value
Having established what brand equity and brand value are ,we can now zero-in on the differences
between the two.
1) Customer-driven vs. Market-driven
The main difference between brand equity and brand value is that:
Brand equity is determined by your customers and how they perceive your brand.
Brand value is influenced by market factors that determine how much your brand is worth.
2) Consumer’s Recall vs. Performance
A positive brand equity is determined by how easy it is for customers to identify and recall your brand. In
contrast, brand value rides on the overall performance of your brand, product, or services.
3) Successful Market Penetration vs. Brand Financial Success
Another main difference between brand equity and brand value is that:
Brand equity shows how successful you have been in penetrating your market.
Brand value indicates the financial success of your brand. It shows how successful you are at turning
brand equity into profit.
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The Difference Between Brand Equity and Brand Value
4) Emotions vs. Value-adding
A subtle difference between brand equity and brand value is that brand equity is built on how
customers feel about a brand. In essence, your brand equity is about building strong relationships
with your customers, while brand value is about building up your business through value-adding
activities.
■ Brand equity and brand value are measures that estimate how much a brand is worth. The
difference between the two is that brand value refers to the financial asset that the company
records on its balance sheet, while brand equity refers to the importance of the brand to a
customer of the company.
■ Understanding the difference between brand equity and brand value is important for marketing
and branding. It helps inform how you develop your marketing and branding strategies. It will help
you know what to do to build each of them. Overall, a clear understanding of how brand equity
differs from brand value will help you understand your brand’s overall health.
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Elements & Components of Brand Equity
Brand equity is a function of several other qualitative parameters which a customer can
associate with a brand. Some of the main components or elements of brand equity are as
follows:
1.Brand Image : The image which is formed in customer's mind. Brand image is the most
important parameter when it comes to creating brand equity.
2.Brand Identity : The image what the company is trying to form. Brand identity is created by
the company to try to form positive brand image but it depends on how customers perceive.
3.Brand Awareness : Brand awareness concerns the extent to which a brand is known or
recognizable to a consumer. Awareness should be high for good brand equity.
4.Brand Loyalty : dictates that a consumer who truly believes in the value of a brand’s
offerings will often make frequent and repeat purchases from it instead of switching
between brands.
High brand loyalty ensures that business is stable and consistent, and enables the
organization to capture a larger market share.
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Elements & Components of Brand Equity
5.Brand Association : Does the customer associate brand to a positive
attributes or not? Sometimes association something existing like event
or celebrity can contribute to brand equity.
6.Customer Perception : What is the overall perception and experience
of the customer related to the brand?
Since brand equity gives a qualitative outlook, it is quite complicated to
define it through numbers or a value.
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Elements & Components of Brand Equity
Figure 2: Elements & Components of Brand Equity
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How to Build Brand Equity
 Improve Brand Awareness
Remember, brand equity is mainly about how your customers perceive your brand. Because of this, one
of the first steps you must take to build it is to improve your brand awareness. After all, if people don’t
know your brand, they can’t have any perceptions about it.
So, how do you boost your brand awareness? Here are a few ideas : Use content marketing.(Create
content that your target audience resonates with), Influencer marketing, Event sponsorship.
Improving brand awareness is not just about driving sales, great as that is. It’s also about playing the
long-term game of building your brand equity — which, fortunately, leads to increased sales.
 Develop Brand Identity and Personality
Brand identity refers to the visible elements of a brand that help customers distinguish it from other
brands. Examples include color, design, and logo design, among others.
At the same time, brand personality is a set of human characteristics attributed to a brand. These can
be attitudes, emotions, and feelings your brand portrays.
Both brand identity and personality have an impact on your brand equity. The more your target
audience can relate and connect emotionally with your brand, the better your brand equity.
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How to Build Brand Equity
 Emphasizing Positive Brand Associations
Strong brand associations are crucial to building loyalty towards your brand. Ways of enhancing the way consumers
view your brand might include Using innovative and eye-catching means of advertising, highlighting the core
functional, social, or emotional benefits of your product.
 Focusing on Building Relationships
It is mainly consumers who determine the strength of your brand’s equity; it is, therefore, essential to
build and maintain positive relationships with your target segments. Managers can do this in simple
ways such as:
■ Staying in touch with customers via social media
■ Providing excellent customer service at all times
■ Tracking any negative press or feedback, listening and responding
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The Brand equity dimensions (Sources of Brand Equity )
The dimensions of brand equity can be explained below:
Perceived Quality : Aaker‘s (1991) defines Perceived Quality as ―consumer‘s perception of the
overall quality or superiority of a product or service with respect to its intended purpose, relative to
alternatives. High perceived quality occurs when customers recognize the difference and superiority of
the brand in relation to the competitor's brand
Brand associations. Aaker (1991) defined brand associations as “anything linked in memory to a
brand”. Brand associations are complicated and closely inter-connected. The concept consists of
multiple ideas, episodes, instances, and facts that establish a solid network of brand knowledge (Yoo
et al., 2000). It is formed by the customer’s belief in the brand created through direct experience with
the product or based on available associations (Aaker, 1991). The concept of brand associations
represents the functional attributes and experience provided by a particular brand. Invisible attributes
such as creativity, differentiation, dynamism and prestige are also considered under the umbrella of
brand associations. The combination of tangible and intangible attributes creates brand identity, in
turn leading to brand associations
Satisfaction is a person‘s feelings of pleasure or disappointment that result from comparing a
product‘s perceived performance (or outcome) to their expectations .Customer satisfaction only results
when the customer perceives him or herself and needs as playing a central role in all this activity. The
customer wants to see all the aggressive energy as a response to and support of his or her needs. The
customer wants some sign that the corporation has listened to its customers—and responded
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The Brand equity dimensions (Sources of Brand Equity )
Brand Loyalty is a measure of the attachment that a customer has to a brand. According to Yoo et
al. (2001), brand loyalty refers to loyalty to a specific brand, as exemplified by the brand always being
the first choice when customers intend to buy. Brand loyalty is the result of brand trust or the
promise of building high-value connections between customers and brands.
Brand loyalty refers to the positive association that the customers have with a specific product, which
is expressed by their repeated purchase of the product, even when competing alternatives are
available. The ultimate goal for marketing professionals is to acquire and sustain brand loyalty for a
particular product.
It is one indicator of brand equity which is demonstrably linked to future profits, since brand loyalty
directly translates into future sales. Brand loyalty comes from use experience but could be influenced
by the other major dimensions of brand equity - awareness, associations, and perceived quality.
The most famous brand name products are usually present in very competitive markets, with a wide
range of new and old competing products that are quite different to differentiate. Customers who are
brand loyal are going to purchase the brand and will not be influenced by price or convenience
factors. These customers are satisfied as the product fulfills their requirements, and so, they do not
want to try another brand.
Brand loyalty typically signifies the way customers perceive the brand. A positive image needs to be
instilled by the business in the minds of their customers if they wish to create high levels of brand
loyalty.
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The Brand equity dimensions (Sources of Brand Equity )
Brand Awareness is the ability of consumers to recognize or recall the brand under different
conditions. In particular, brand name awareness relates to the likelihood that a brand name will
come to mind and the ease with which it does so. Brand awareness consists of brand recognition
and brand recall performance. Brand recognition relates to consumers' ability to confirm prior
exposure to the brand when given the brand as a cue. In other words, brand recognition requires that
consumers correctly discriminate the brand as having been seen or heard previously. Brand recall
relates to consumers' ability to retrieve the brand when given the product category, the needs
fulfilled by the category, or some other type of probe as a cue. In other words, brand recall requires
that consumers correctly generate the brand from memory. The relative importance of brand recall
and recognition depends on the extent to which consumers make decisions in the store (where they
potentially may be exposed to the brand) versus outside the store, among other factors. Brand
recognition may be more important to the extent that product decisions are made in the store.
Brand image is a set of associations, usually organized in some meaningful way .Brand image
refers to the set of associations linked to the brand that consumers hold in memory. Brand image is
defined here as perceptions about a brand as reflected by the brand associations held in consumer
memory. Brand Image is on the receiver‘s side. Image research focuses on the way in which certain
groups perceive a product, a brand a company or a country.
Identity is the way a company aims to identify or position itself or its product. Image is the way the
public actually perceives them
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The Brand equity dimensions (Sources of Brand Equity )
Brand personality is defined as the ―set of human characteristics associated with a brand.
Perceptions of brand personality traits can be formed and influenced by any direct or indirect contact
that the consumer has with the brand. In addition to personality characteristics, researchers argue
that brand personality includes demographic characteristics such as gender. Perceptions of brand
personality traits can be formed and influenced by any direct or indirect contact that the consumer
has with the brand (Aaker, 1997). Brand personality reflects how people feel about a brand as a
result of what they think that the brand is or does, the manner by which the brand is marketed, and
so on.
Brand attitude is what the consumers think that the brand thinks about them. Brand Attitude‘ also
plays an important role in building brand equity.
consumers‘ purchase intentions toward the labelled product are influenced by their attitude toward
the label and their expectations to the labelled product label importance has an influence on the
attitude toward label and therefore an indirect influence on purchase intentions. Consumers‘
willingness to pay (more) for the labelled product is found to be influenced by attitude toward label,
expectations to the labelled product, importance of the label, purchase intentions and personal
income. As seen, attitude toward the label plays an important role in consumers‘ buying behaviour. In
its turn, attitude toward the label is influenced by trust in the label, expectations to the labelled
product, and importance of the label.
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The Brand equity dimensions (Sources of Brand Equity )
Table 3 : Brand equity dimensions
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Brand Equity Models
■ There is little agreement on exactly what the dimensions of brand equity entail (Christodoulides
and De Chernatony, 2010; Veloutsou et al., 2013). Aaker (1991) proposes brand equity with the
five dimensions of brand awareness, perceived quality, brand associations, brand loyalty and
other proprietary brand assets. However, the fifth dimension is not directly relevant to the
consumer; consequently, it is usually omitted. Keller (1993) focuses on two components of brand
knowledge signified as brand awareness and brand image. In addition, Lassar (1995) proposes
five basic components of brand equity: performance, social image, value, trustworthiness and
attachment. According to Atilgan (2009), brand equity consists of perceived quality, brand loyalty,
brand associations and brand trust. Other dimensions have also been proposed by many
researchers.
■ However, Aaker’s model (1991) is clearly the most popular brand equity model, brand equity
model of Aaker (1991) consisting of five core dimensions: brand awareness, perceived quality,
brand associations, brand loyalty and other proprietary brand assets.
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Aaker’s Brand Equity model
Figure 3 :Aaker’s Brand Equity Model
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Aaker’s Brand Equity model
■ Brand awareness: how known is the brand to the public? this is the starting point of building brand
equity.
■ Brand loyalty: how loyal are people to the brand? Loyalty is hard for competitors to copy, so it gives
a brand time to respond to competition.
■ Perceived quality: is the brand known or expected to deliver good quality products? Quality above
features will give a product the edge with consumers – for a while, until they begin to demand the
features.
■ Brand associations: what do people feel when they see the brand? The cognitive, split-second
reaction to seeing the brand on adverts, during the buying process, the ‘feel-good factor’, the
number of available brand extensions and differentiations.
■ Proprietary assets include Patents, Trademarks and trading partners : brands with higher
accumulated proprietary rights have a competitive edge against other brands. These assets are
vital to ensuring that other brands cannot compete by operating under a similar name or using
very similar packaging, which may confuse consumers and compete away from a brand’s
customer base.
All these components are measurable when ran through the right platforms that highlight where more
could be done to attain brand equity. Branding needs to be delivered at every touchpoint along the
customer journey to ensure this recognition. Data can then be gathered at various stages of
marketing to inform and increase customer brand loyalty and show up the distinctiveness of the brand
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from its competitors.
Keller’s Customer-Based Brand Equity (CBBE) model
■ The best-known CBBE model is the Keller Model, devised by Professor of Marketing Kevin Lane
Keller and published in his mighty Strategic Brand Management.
■ With the evolution of marketing, the focus of companies switched to the customer. Happy
customers mean profit. Companies realized that to become even more profitable they had to go
beyond simply keeping customers happy and build a strong relationship and resonance with them
too. Relationships are, of course, built on strong foundations and develop over a period of time.
■ Keller’s model is a pyramid. The stages of brand equity move upwards towards the apex and the
simple brilliance of this model is that it’s easy to tell what stage the brand is at and what it needs
to do to move higher.
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Keller’s Customer-Based Brand Equity (CBBE) model
Figure 3 :Keller’s Customer-Based Brand Equity (CBBE) model
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Keller’s Customer-Based Brand Equity (CBBE) model
Level 1: Brand identity (who are you?)
This is how customers look at your brand and distinguish it from others. It’s the most important stage
and must be strong to support the rest of the pyramid above it. Brand identity builds when customers
start off unaware of your products and values, then you can attract them with ad campaigns and
targeted marketing that increase awareness.
Building strong brand equity requires formulating your brand in a way that causes it to be prominent in
the minds of consumers; it’s all about enhancing your brand’s identity and salience.
Level 2: Brand meaning (what are you?)
When customers become aware of your brand, they’ll want to know more about it. Do its features work
well? Is it reliable? Does it look good? Is the customer service good? Is it value for money? This is
brand meaning and is divided into two:
■ Brand performance: when a brand ‘does what it says’ and performs well over time (how well your
product meets the needs of customers), it will be loved and trusted (e.g. Miele, Apple, Microsoft,
Virgin)
■ Brand imagery: what does the brand appear to be to customers? ((meeting the psychological
needs of your customers through developing your brand’s personality and overall image).
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Keller’s Customer-Based Brand Equity (CBBE) model
Level 3: Brand response (what are the feelings for the brand?)
Once a customer has bought the brand, does it live up to the hype and expectation for them? If they
love the product, they have feelings for it, and they’ll tell friends, family and social media to buy one.
They are starting to become a brand adocate. If they’re disappointed with their purchase, their
judgment of it will be negative and they won’t buy another one, and may criticise it widely. They
become a brand detractor. Companies need to address judgments and build positive feelings at Level
three to attain…
Level 4: Brand resonance (that strong relationship)
When a customer loves a brand so much they would not consider buying another one, feels a
relationship with it and a connection with other buyers, they are that very rare and precious thing: a
brand advocate.
Brand equity can be built by strengthening the connection, or resonance, established between your
brand and your customer, evidenced through factors such as repeat purchase or active engagement
on social media (both with the brand and those within the brand’s community).
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Measuring Brand Equity
Perhaps the most challenging aspect of brand equity is how to calculate it, for there is no unique or
consistent metric that brands can use to measure consumers’ subjective emotions and responses.
However, it remains an essential function since losing sight of the strength of your brand equity can
impact your bottom line and your ability to compete.
Quantitative measurements : This involves measuring brand equity by looking at financial metrics,
which reflect the requisite strength of the brand. Such metrics include:
■ Profitability, Profit margins and Growth rate
■ Price sensitivity – known in economics as price elasticity, and concerns the extent to which
consumer demand will react to changes in price
■ Market share percentage (What is your company’s market share? Leaders in the market tend to
have a higher brand equity.)
■ Purchasing frequency
■ Company Value: To measure the brand equity, you could think of the firm as an asset. When
subtracting the tangible assets from the overall value of the firm, you would be left with the brand
equity.
■ Revenue potential: What does the revenue potential look like for your product? How does this
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compare to your company’s current revenue?
Measuring Brand Equity
Qualitative Measurements
These measurements cannot measure brand equity as such, but are an essential means of insight.
Qualitative methods might include:
■ Monitoring social media reactions towards your brand
■ Conducting surveys or focus groups to evaluate consumers’ emotions and feelings towards your
brand, indicative of the value of your brand to consumers
■ Conducting focus groups to assess consumers’ knowledge of various brands within a market, their
favorite brands, and evaluate the relative prominence of your brand within this mix.
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Benefit of brand
If brand equity is intangible, why is it important?
 Brand enhances the value of a product beyond its functional purpose.
 sustainable competitive advantage and marketing success.
 The organizations seek to build a strong brand for the product. To be clearly distinguished, in this
way the organizations will help the customers in the choosing process to meet their desires.
 Brand building helps in creating, evolving and enhancing a brand's positioning and its perceptions
among stakeholders which are important in affecting the behavior and performance of an
institution.
 Increases revenue and profits since customers will choose your brand over the competition (even
if you’re more expensive).which lead to improve financial positions of the company
 The ability of the organization to put high prices and effectiveness of marketing communications
 Increase customer loyalty as customers tend to do business with brands that they have a positive
perception of. It is considered as a promise made by the company to its customers.
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Brand Equity Examples
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Positive Brand Equity: Nike
Positive brand equity is demonstrated effectively by the apparel brand Nike.
■ Nike has successfully built up strong brand awareness using various sponsorships and
advertisements at major sporting events, using bright orange shoe boxes, and creating innovative,
customer experience-focused stores. Its highly recognizable slogan, “Just Do It”, paired with its
infamous ‘swoosh’ logo means that many Nike campaigns do not need to mention the brand
name, because brand awareness is already so strong.
■ When consumers think of Nike, a majority of them are confronted by positive brand
associations of innovation, motivation, and determination. These positive associations are created
predominantly through their inspiring advertising campaigns and collaborations with influential
athletes, such as LeBron James or Michael Jordan, which encourages consumers to believe that
Nike is just as expert in the retail field as their representatives are in theirs.
■ These celebrity endorsements also contribute significantly to the brand’s perceived quality; if Nike
is good enough for famed athletes, then it is good enough for us.
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Positive Brand Equity: Nike
■ This in turn enhances brand loyalty. Consumers feel confident that Nike will deliver consistently
high-quality products and customer service. The customer relationship is further enhanced
through investment in the customer journey, with collaborative features such as the Nike Run
Club, allowing consumers to track their fitness goals and receive top quality coaching, or the
ability to personalize sneakers with Nike By You.
■ Financial value: These branding features add significant extra value to Nike products, making Nike
the world’s most valuable apparel brand. In 2020 Nike’s brand value was $39.1 billion, which
almost matched its brand revenue of $39.3 billion.
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Negative Brand Equity: Volkswagen
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Negative Brand Equity: Volkswagen
■ A key example is the Volkswagen emissions scandal of 2015, where it was revealed that the
brand had been falsifying their emissions figures using technology, which could cheat on
emissions tests. Volkswagen’s brand equity was left subsequently damaged.
■ The relative perceived quality of Volkswagen contributed highly to this, with consumers
undoubtedly feeling as though other mid-market car brands could provide greater overall
quality only by fitting their cars with reliable and fully functioning emissions technologies.
■ Crucially, its brand associations deteriorated since the public could no longer associate the
brand with positive feelings of trustworthiness or reliability.
■ Financial value: using a market share metric, we can see a decline in brand equity given that
following the scandal, Volkswagen lost nearly a quarter of its market value (23%), a reduction
of approximately $17.6 billion.
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Thanks
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