Professional Documents
Culture Documents
Brand Value
David Aaker
(David Aaker, Vice Chairman of Prophet consults exclusively for Prophet clients. He is the creator of the Aaker
Model™, has published more than 100 articles and 15 books, including his latest, Aaker on Branding: 20
Principles That Drive Success. Prior to that book, he authored Brand Relevance: Making Competitors Irrelevant,
which was cited by Advertising Age as being among the "Ten Marketing Books You Should Have Read" in 2011
and was named one of the top 3 marketing books of the year by Strategy and Business. Professor Emeritus at
the Haas School of Business, University of California, Berkeley, he has been awarded four career awards
including the 1996 Paul D. Converse Award for outstanding contributions to the development of marketing. In
March 2014, he was profiled by California Magazine and called "The Plato and Newton of Branding.")
Brand equity is a key construct in the management of not only marketing but also business
strategy. It helped create and support the explosive idea that emerged in the late 1980s, that
brands are assets that drive business performance over time. That idea altered perceptions of
what marketing does, who does it and what role it plays in business strategy.
Brand Equity also altered the perception of brand value by demonstrating that a brand is not
only a tactical aid to generating short-term sales but also a strategic support to a business
strategy that will add long-term value to the organization.
So what is brand equity and brand value and how should they be
measured?
Brand equity is a set of assets or liabilities in the form of brand visibility, brand associations
and customer loyalty that add or subtract from value of a current or potential product or
service driven by the brand. To elaborate:
Brand visibility means that the brand has awareness and credibility with respect to a
particular customer need—it is relevant. If a customer is searching for a buying option and
the brand does not come to mind, or if there is some reason that the brand is perceived to be
unable to deliver adequately, the brand will not be relevant and not be considered.
Brand associations involve anything that created a positive or negative relationship with or
feelings toward the brand. It can be based on functional benefits but also a brand personality,
organizational values, self-expressive benefits, emotional benefits or social benefits.
Customer’s loyalty provides a flow of business for current and potential products from
customers that believe in the value of the brand’s offerings and will not spend time evaluating
options with lower prices. The inclusion of loyalty in the conceptualization of brand equity
allows marketers to justify giving loyalty priority in the brand building budget.
Brand Loyalty
Reduced Marketing Costs
Trade Leverage
Attracting New Customers via Awareness & Reassurance
Time to Respond to Competitive Threats
Brand Visibility
Anchor to Which Other Associations Can Be Attached
Familiarity Which Leads to Liking
Visibility That Helps Gain Consideration
Signal of Substance/Commitment
Brand Associations
Helps Communicate Information
Differentiate/Position
Reason-to-Buy
Create Positive Attitude/Feelings
Basis for Extensions
“In an increasingly crowded marketplace, fools will compete on price. Winners will find a
way to create lasting value in the customer’s mind.”
Final Thoughts
Brand equity continues to be a driver of much of marketing, indeed business strategy. For it
to work, it needs to be understood conceptually and operationally. And it is important that it
be tied to brand value in credible ways.