Application of Keller’s Brand Equity Model in Destination Branding Context Volkan ÜLKE Abstract Because of highly competitive destination markets, destination branding techniques are becoming popular among destination marketing organizations. Destination marketing organizations tend to leverage their destination brand value to other products associated with the destination brand. The purpose of this study was to apply and extend the concept of Keller’s customer-based brand equity model to destination brand measurement. This study has the following objectives: to develop a valid and reliable model of consumer-based destination brands, to empirically assess the dimensions of the destination brand construct, to test the relationship among dimensions in a destination brand construct, and to validate the model construct. And to emphasize emotional memories affect on the destination brand. Introduction In literature brand simply defined as powerful means of differentiation, and that differentiation is a significant competitive marketing strategy (Kapferer, 1997; Keller, 2003). The extension of the brand concept from products to service industries such as tourism offers implications for resort and travel destination management (Buhalis, 2000). Destination branding is considered a vital aspect of current destination management practice, as broadening tourist opportunities and travel locations have resulted in the increased substitutability and lack of differentiation amongst some destinations (Pike, 2005). Many tourism organizations for countries, cities, and regions have emerged to promote their destinations. Destination marketing tends to emphasize attributes of a destination, e.g. splendid resorts and hotels, unique culture, heritage and friendly people. These attributes are used so often they are no longer differentiators (Morgan, 2004). Many state destination organizations have created logos and slogans for their destinations to differentiate from others and promote themselves. Their slogans can be categorized by five different types: “1) Buy us because we are good, 2) Common attribute-based, 3) Unique attribute-based, 4) Exclusive appeal, 5) Average Joe and they are created toward their target markets.” (Lee et al., 2006) A number of destination branding success stories were introduced in Destination branding: creating the unique destination proposition. These examples include New York, Tasmania, Australia, Canada, New Orleans, Louisiana, Texas, and Oregon (Morgan, 2004). Currently, branding techniques have become “powerful tools” for tourist destination marketers because a brand can identify and distinguish the destination through a positive image. The brand can create a positive identity and image of a destination that ties tourists to it emotionally (Cai, 2002; Gnoth et al., 2007). The purpose of this study was to apply and extend the concept of Keller’s customer-based brand equity model to destination brand measurement. This study has the following objectives: to develop a valid and reliable model of consumer-based destination brands, to empirically assess the dimensions of the destination brand construct, to test the relationship among dimensions in a destination brand construct, and to validate the model construct. And to emphasize emotional memories affect on the destination brand. Even seventeen years paased over, you can still see the collapsed buildings, bullet scars everywhere in Sarajevo. The war may be over, but the marketing may go on in a country with precious little to profit from other than the painful memories of the past. Literature Review Brand/Braning Branding has the propensity to distinguish one product from another by creating different brand elements, “name, logo, symbol, and package design” and it can create value for a firm resulting in financial profit (Keller, 1998). The American Marketing Association (2008) defined “a brand as name, term, sign, or combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of the competition.” A brand for a new product is shaped by creating a new name, logo, or symbol and as a result of this it receives “awareness, reputation, and prominence in the marketplace” (Keller, 2002). Aaker’s (1991) widely accepted definition of a brand is “to identify the goods or services of whether one seller or a group of sellers, and to differentiate those goods or services from those of competitors.” (p.7) Unlike product markets, a destination brand is more likely to be a corporate or umbrella brand because it allows the destination’s individual operators’ brands to have certain qualities or attributes (Gnoth, 2007). Tourists perceive a destination as a product. They evaluate the attributes of the destination through both cognitive and affective processes (Baloglu & McCleary, 1999). Cai (2002) stated that "destination branding is a strategic combination of a consistent mix of brand elements to identify and distinguish a destination through positive image building and unlike typical goods and services, the name of a destination brand is relatively fixed by the actual geographical name of the place.”(p.722). Research has emphasized a unique combination of functional, symbolic, and experiential elements of a brand to create a unique destination identity (Dredge & Jenkins, 2003). Products associated with a destination brand carry not only the destination brand image but also the qualities and attributes of the products themselves. This kind of destination brand character is often considered brand extension and plays a significant role in building on the “halo effect,” stating that consumers transfer their country image to the product when evaluating unfamiliar products and the country image serves as a halo directly and indirectly on the products (Han, 1989). In some cases, destination brand research has followed a marketing approach from a retail perspective; however, these were at the conceptual level of exploration (Cai, 2002). In terms of destination brand management, various means to communicate the brand message effectively have been suggested (Jago et at., 2003). However, specific effects on destination brand management, such as the assessment of brand impact, have not been investigated. Measuring the effectiveness of brands is a crucial aspect of successful long-term destination management. It has been suggested that the effectiveness of destination brands can be measured from a customer perspective. Furthermore, empirical research that focuses on experienced travelers and their perception of the destination brand should be employed to measure the effects of brands on the customer (Blain et al., 2005). Keller (2002) classified the benefits of a “strong” brand into 4 different categories: productrelated effects, price-related effects, communication-related effects and channel-related effects. Product-related effects of brand include consumer product evaluations, consumer confidence, perceptions of quality, and purchase rate positively related to a brand name. If consumers are well aware of a brand, their attitude and their purchase intention toward the brand are increased. Price-related effects refer to the fact that brand leaders have higher priced positions and consumers have a lower level of price sensitivity toward those leaders. Communication-related effects refer to how the evaluation of brand advertising can be positively biased when consumers have positive feelings toward a brand which is a wellknown and well-liked brand. The effect of the well-known brand, which is most likely to have competitive advantage in marketing activities, is the channel-related effect. Brands are valuable assets and tools influencing consumer behavior which includes awareness, choice, use, satisfaction, recommendation, trust and loyalty. They reduce information search costs and risk for consumers and deliver quality, values, promises, and lifestyle enhancement (Kotler & Armstrong, 1996). Customer based brand equity The concept of brand equity has been a popular and important marketing concept since 1980. The concept of brand equity, however, has been defined by various researchers for different purposes resulting in a number of definitions (Keller, 1998). The emergence of brand equity has raised the importance of marketing strategies and provided focus for managers and researchers (Keller, 2003). The Marketing Science Institute (1989) described brand equity in the perspective of customers as “…the value that is added by the name and rewarded in the market with better profit margins or market shares. It can be viewed by customers and channel members as both a financial asset and as a set of favorable associations and behaviors.” Aaker (1991) defined “brand equity as a set of brand assets and liabilities linked to a brand, its name and symbol add to or subtract from the value provided by a product or service to a firm and/or that firm’s customers.” His approach to brand equity is viewed as a managerial and corporate strategy perspective. He stated that the assets and liabilities linked to a brand’s name or symbol can be grouped into five dimensions: brand loyalty, brand awareness, perceived quality, brand associations, and other proprietary brand assets. He suggested that we can generate brand equity by strengthening those dimensions. Keller (1998), who approached the concept of brand equity from the perspective of the consumer, defined “customer-based brand equity as the differential effect that brand knowledge has on the consumer or how customers respond to the marketing of that brand.” He also suggested that as customers respond more favorably to a product whose brand is identified, the brand has positive customer-based brand equity and it exists when the consumer has a high level of awareness and familiarity and strong, favorable, and unique brand associations in their memory (Keller, 2002). The brand is established through the proper identity, the appropriate brand meaning, the right brand responses, and the appropriate brand relationships with customers by establishing six core brand values: brand salience, brand performance, brand imagery, brand judgments, brand feelings, and brand resonance (Keller, 2001). ). Keller (2003) described brand equity as ‘‘a multidimensional concept and complex enough that many different types of measures are required. Multiple measures increase the diagnostic power of marketing research’’ (p. 477). He noted that, from a marketing perspective, brand equity is referred to as consumer-based brand equity. Recently, the concept of brand equity has been employed to measure how consumers assess a brand overall (Ford, 2005). Keller (2002) summarized the benefits created by strong brand equity as follows (p.xii): Improved perceptions of product performance Greater loyalty Less vulnerability to competitive marketing actions and marketing crisesLarger margins More inelastic consumer response to price increases and more elastic consumer response to price decreases Greater trade cooperation and support Increased marketing communication effectiveness Licensing opportunities and additional brand extension opportunities Research on destination branding began to emerge after the first journal article on this subject was published in 1998 (Gnoth, 1998). Studies on destination image have been plentiful. Even though many destinations have adapted branding strategies for marketing their products and services, there is no clear conceptualization on branding a destination (Gnoth et al., 2007). Tasci & Kozak (2006) discussed the concepts ‘brand’ and ‘image’. They concluded that these are related concepts and brand is referred to as “a product of marketing activities of destination authorities” while image is considered as “more of a product of consumer perception” as it plays the role of a sub-concept of a destination brand. In other words, if the image of a destination is positive, the brand would be more effective in the market. The brand would influence awareness, choice, satisfaction, recommendation and loyalty. Many destination organizations use destination branding as their main strategy because a strong brand creates value added to the seller and buyer as it builds strong brand equity (Cai, 2002). Morgan et al. (2004) discussed many successful destination branding initiatives and suggested destinations can become brands which have “celebrity value” and “emotional appeal.” Recent definitions of brand equity have evolved and include the added value of name and expand to a broad set of attributes that drives customer choice (Faircloth, 2001). Faircloth (2001) stated that “brand equity actually represents a product’s position in the minds of consumers in the marketplace.” Strong brand equity tends to convey premiums such as more favorable customer response to price change, brand extension and licensing opportunities (Keller, 2001). Kim et al. (2003) examined the relationship between brand equity and a hotel firm’s financial performance using the dimensions of customer-based brand equity (brand loyalty, brand awareness, perceived quality, and brand image). Kim et al. (2008) also investigated a direct relationship between hotel brand equity and customers’ revisit intention with all dimensions of brand equity (brand loyalty, perceived quality, and brand awareness/association) and perceived value as a mediating role in building the brand equity in customer-based brand equity approach. Overall attitudinal loyalty to a specific hotel brand is considered customer-based brand equity and behavioral loyalty is cited as hotel revisit intention which results in brand equity. They found that brand equity perceived by customers can have significant influence on a hotel firm’s financial performance. Brand loyalty and brand awareness / association increase revisit intension. Recent studies have highlighted the need to refine and measure the consumer-based brand equity construct (Yoo & Donthu, 2001). De Chernatony and McDonald (2003) indicated that an instrument to measure brand equity from a customer perspective has been lacking despite the increasing importance of the brand equity concept. Similarly, there is a need for a destination brand measure (Blain et al., 2005). The concept of customer-based brand equity and its measurement have emerged in tourism and hospitality settings. Destinations are far more multi-dimensional than consumer goods and other types of services (Pike, 2005). Low and Lamb 2000) noted that researchers hypothesized that consumer perceptions of brands are multi-dimensional, yet many of the dimensions identified appear to be very similar. Elements of the Keller model Brand equity, as defined by Keller (1993), occurs when a brand is known and has some strong, favourable and unique associations in a consumer’s memory. As shown in Figure 1, the CBBE model identifies four steps for building a strong brand. In this branding ladder, each step is dependent on successfully achieving the previous – from brand identity to brand meaning, brand responses and finally brand relationships. These steps in turn consist of six brand building blocks – salience, performance, imagery, judgments, feelings and resonance. The ultimate aim is to reach the pinnacle Keller’s brand equity model of the CBBE pyramid – resonance – where a completely harmonious relationship exists between customers and the brand. Keller’s (2003) argument is as follows. The first step in building a strong brand is to ensure the correct brand identity. The purpose is to create an identification of the brand with customers, and an association in their minds with a specific product class or need. To do this, brand salience must exist, which represents aspects of brand awareness and the range of purchase and consumption situations in which the brand comes to mind. The salience building block is therefore made up of two sub-dimensions – need satisfaction and category identification. The Keller model is focused primarily on an individual’s perceptions of brands in the assessment of brand equity, but in a destination context these other influencers can have an impact on brand equity as well. ………………………………. The second step establishes brand meaning by linking tangible and intangible brand associations. Brand meaning is therefore characterised in either functional (brand performance) or abstract (image-related) associations. Functional attributes are: primary ingredients and supplementary features; product reliability, durability and serviceability; service effectiveness, efficiency and empathy; style and design; and price. Image associations relate to the extrinsic properties of the product: user profiles; purchase and usage situations; personality and values; and history, heritage and experiences (Keller, 2003). organisational buying context (as argued by other researchers such as Lynch and de Chernatony, 2004), but suggests that different types of feelings and imagery to those specified by Keller, may be required in a destination brand equity model. Brand relationships constitute the final step in the pyramid where brand response is converted to create an intense, active loyalty relationship between customers and the brand. The pinnacle of the pyramid is resonance, which refers to the nature of the relationship between the customer and the brand. It is described as having four elements: behavioural loyalty, attitudinal attachment, sense of community and active engagement (Keller, 2001). Customer loyalty generating factors have also been found to be important to the success of industrial brands (Michell et al., 2001). Unlike consumer markets, the gain or loss of a few customers can significantly impact an industrial manufacturer’s bottom line. This makes brand loyalty particularly important as it is, in some respects, firm loyalty (Gordon et al., 1993). Changes for one individual product may affect perceptions of all products and cause a distributor to switch suppliers in all categories after a poor experience with an individual good (Gordon et al., 1993). While there is a lack of research to confirm the existence of attitudinal attachment and a sense of community in industrial markets, there is evidence of active engagement. Hutton (1997) found willingness to communicate about the brand and make brand referrals. He also found that some organisational buyers had developed such a strong relationship with the brand they were willing to extend to other products with the same brand name. In order to assess the applicability of the Keller model in a destination branding and identify insights and challenges of such an application, we undertake Sarajevo and Mostar visitors. Study Methods Each construct in the destination brand model requires scale items that are destinationspecific. Reis and Judd (2000) noted that ‘‘the psychometric approach relies on aggregate patterns of data to evaluate a proposed measurement model’’ (p. 341). Hence, multiple items for each dimension are useful to examine construct validation and check the consistency level of a respondent’s self-report of each dimension. Multiple items were used to measure each dimension of destination brand salience, destination brand imagery , destination brand performance, destination brand judgment, destination brand feelings and destination brand resonance. In this study questionnaires will be used which is scled by Boo, Busser and Baloglu (2009). Their model was tested for Las Vegas and Atlantic City visitors with an online survey. By using same question we will conduct a survey for Sarajevo and Mostar. And Results will evaluated according to Keller (2003) customer-based brand equity model. It is accepted to see right side of the model which reflects emotional affects has major path way between salience of brand and customer destination brand resonance. Survey results will analyzed by structural equation model (SEM). Performance Judgments salience Resonance Imagery Feelings References Aaker, D. A. (1991). Managing brand equity. New York, N.Y.: The Free Press. Baloglu, S., & McCleary, K. W. (1999). 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