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Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of

Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

Building Global Brand Equity through Advertising: Developing A Conceptual


Framework Of Managing Global Brand Equity
Amit Arora
Georgia Southern University, Statesboro, Georgia, USA

Mahesh Raisinghani
TWU School of Management, Texas Woman‘s University, Texas, USA

Anshu Arora
College of Business Administration, Savannah State University, Savannah, Georgia, USA

D. P. Kothari
Professor and Vice Chancellor, Vellore Institute of Technology, Vellore, Tamilnadu, India

ABSTRACT

The research paper addresses issues in global brand management and building global brand
equity through advertising. In this paper, we focus on certain brand concepts like brand power,
brand positioning, brand loyalty, and brand reinforcement in the context of ‗Global Brand‘ and
the ability of the global brand to command a premium price. We conceptualize ―Brand Power‖
as a combination of brand awareness, brand knowledge, brand identity, brand promise, unique
brand image, perceived quality, and brand vision in the context of Global Brand. We recognize
that advertising creates global brand equity by living up to its brand power, with the use of a few
case studies in the field of global brand equity management.

The research paper proposes a conceptual framework of global brand equity through our
conceptualized global brand equity (GLOBEQ) model showing a direct relationship amongst
brand equity drivers of brand power (brand awareness, brand knowledge, brand identity, brand
promise, unique brand image, perceived quality, and brand vision), brand‘s market position,
brand loyalty, and brand reinforcement through brand associations and brand experiences.
Marketers rely on advertising as a primary tool to develop and nurture brand equity. In this
paper, we have used the DAGMAR approach in advertising for showing its impact on global
brand equity. Global brand management issues have been discussed and a GLOBEQ model with
inter-relationships with other key brand parameters has been suggested leading to an
identification of factors for managing and enhancing global brand equity through advertising.
The paper focuses on the following questions – 1) what characteristics do global brands have in
common, 2) what actions can managers take to create and maintain global brands, and 3) how
advertising acts as a contributor to global brand equity – specifically, how global brand equity
measures can contribute to the development and evaluation of advertising.

Key Words: Global brand equity, Brand power, Brand positioning, Brand loyalty, Premium
price and Advertising
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IJGMS 75 2009 Volume 1 Issue 4
Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

INTRODUCTION

Branding has been around for centuries as a means to distinguish the goods of one producer from
those of another. Brands today play a number of important roles that improve consumers‘ lives
and enhance the financial values of firms. Branding is not simply the name of a company or a
product; it is not simply using an existing name for a new product; it is not an advertising
campaign, a marketing slogan or a logo (Levine, 2003). Brand is a ―name, phrase, design,
symbol, or some combination of these elements that identifies organizations services and
differentiates it from competitors‖ (Lovelock and Writz, 2007). It is supposed to appeal to the
rational, logic, senses of taste and feelings of customers (Margaret, 1998). It is also intended to
make them feel comfortable, as if the brand represents their personality, lifestyle, aspirations and
behavior. A brand identifies the source of the product, assigns responsibility to the product
maker, provides a promise, reduces customer search costs and risk (Lovelock and Writz, 2007)
and signals the quality of the product (Janiszewski and van Osselaer, 2000).

Branding is endowing products and services with the power of a brand. It highlights the creation
of differences between products. Branding is the behavioral characteristic of the consumers to
organize their knowledge about products and services in a way that clarifies their decision
making and, in the process, provides value to the firm (Kotler and Keller, 2009). Brand
differences are often related to attributes or benefits of the product itself. Brand equity is the
added value endowed on products and services. It can be defined as differentiation effect of
brand knowledge on customer response leading to long term outlook, customer knowledge,
brand name, brand power, product innovation, brand quality, brand extensions, brand credentials,
brand advertising, brand publicity and above all, effective brand management.

Brand Differentiation is easy to create in automobiles, shoes, garments, cereals, consumer


electronics, Fast Moving Consumer Goods (FMCGs), etc. but branding is difficult and
challenging to create for goods like gasoline, rubber, furniture, etc. Brand and Customer
knowledge refer to the customers being aware and knowledgeable about differentiation and
appreciating it. Brand equity arises from differences in consumer response. If there are no
differences, competition will probably be based on price. Differential response by consumers is
reflected in perceptions, preferences, and behavioral aspects related to the brand. Other factors of
customer response leading to long term outlook, customer knowledge, brand name, product
innovation, brand quality, brand extension, brand credentials, brand advertising, brand publicity
and brand management are the results of branding, and are key components for managing global
brand equity. Brand strength and brand description are customer-based aspects of brand equity,
whereas brand value is a financial aspect of brand equity.

Brands, particularly those that are high in brand equity (value of the brand) can be organizations
most powerful assets (Herremans et al., 2000). It allows organizations to enjoy high brand
loyalty, name awareness, perceived quality and strong brand associations with customers
(Bristow et al., 2000). There are many steps involved with building a brand‘s equity including;
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IJGMS 76 2009 Volume 1 Issue 4
Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

brand awareness (unaided/aided), brand attributes, message association, brand promise, brand
bonding, brand favorability, brand preference, brand reinforcement, and ultimately brand loyalty.
Each has an important role in moving a consumer towards a purchase and should be understood
in terms of their specific function.

Brand bonding occurs when customers experience the company as delivering on its brand
promise. Disney is successful because the employees support the brand and believe in the credo
that states that they should delight the customer. Brand equity is reinforced by marketing actions
– about what the brand represents, what core benefits it has, what needs it satisfy, and how the
brand makes the product favorable, by creating unique brand preferences and associations in the
minds of consumers. Nivea, a European brand enjoys strong global brand loyalty due to its scope
expansion from skin cream brand to a skin care and personal care brand through brand
extensions reinforcing Nivea‘s brand promise of ―mild,‖ ―gentle,‖ and ―caring‖ brand globally.

Marketers want advertising to build their brands in the long term. Some studies have focused on
the long term effects of advertising. Some ads are effective in the short term and the long term,
while some are effective only while they run. Literature do not provide any evidence of ads that
contribute to business results in the long term without any measurable short term impact.
Historically, pretest measures are designed primarily to evaluate an ad‘s potential impact.
However, short term effectiveness is necessary but not sufficient, to produce long term results.
This brings us to an obvious question of measuring an ad‘s potential to build the brand and to
develop or reinforce Brand Equity in the long term. We will explore this question in the coming
sections. Let us now explore brand power, which comprises of brand awareness, brand
knowledge, global brand identity, brand promise, unique brand image, perceived quality, and
brand vision, leading to brand strength, brand value, customer value, market share, market
leadership, and ability to command a price premium; along with five assets model of brand
equity.

BRAND EQUITY DRIVERS: BRAND POWER, BRAND POSITIONING AND BRAND


LOYALTY

The set of brand style and themes can be described as a six-sided identity prism. Figure 1 shows
the six sided brand identity prism. The identity prism emphasizes the brand‘s identity as a
structured whole of six integrated facets of culture, personality, self-image, physique, reflection,
and relationship. The first three facets of culture, personality and self-image are incorporated
within the brand itself and the last three facets of physique, reflection and relationship are the
social facets which give the brand its outward expression. These outward facets are
communicated explicitly and they are visible and material. The brand pyramid and the identity
prism are illustrated in figure 1 (Kapferer, 2007). To manage and balance identity changes across
the facets in a guided and preferred direction, organizations need to understand the key brand
drivers and "raison d'être". Kapferer has captured this in a three-tier pyramid where he positioned
the identity prism is the pyramid, as shown in figure 1. The pyramid counts 3 layers of freedom
and flexibility: (1) the brand kernel, (2) the brand style, (3) the brand themes, acts and products.
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IJGMS 77 2009 Volume 1 Issue 4
Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

The flexibility and freedom of change decrease from the bottom to the top. The pyramid concept
enables differentiated change management across identity facets by grouping them in a pyramid
layer (Kapferer, 2007).

Advertising is directly related to the identity prism in a way that the outward facets or social
facets can be shaped by a positive advertising campaign. For example, The Olive Garden global
brand promise is ―the idealized Italian family meal‖ characterized by ―fresh, simple, delicious
Italian food,‖ ―complemented by a great glass of wine,‖ served by ―people who treat you like
family,‖ ―in a comfortable homelike setting.‖ To live up to that brand promise, The Olive Garden
sends select managers and servers on cultural immersion trips to Italy; launched the Culinary
Institute of Tuscany in Italy to inspire new dishes; conducts wine training workshops for
employees and in-restaurant wine sampling for customers; and remodeled restaurants to given
them a Tuscan farmhouse look. Communications include in-store, employee, and mass-media
messages that all reinforce the brand promise and ad slogan, ―When You‘re Here, You‘re
Family.‖

Figure 1: Brand identity prism and three-tier pyramid (Kapferer, 2007)

Goldfarb, Lu, and Moorthy (2009) recognize that advertising creates brand equity by living up to
its brand promise. Advertising brings in brand power, influences brand‘s market position,
creates brand loyalty and reinforces past brand purchases and brand experiences, leading to a
positive customer attitude towards the brand. We conceptualize that ‗Brand Power‘ is a
combination of all these brand equity concepts – brand knowledge, brand awareness, global
brand identity, brand promise, unique brand image, perceived quality, and brand vision. Brand
vision is a key global brand equity parameter because it applies to creating a value and a vision
for the brand on a global basis. Brand image plays an important role in the purchase of many
products and services, and advertising is still recognized as one of the best ways to build a brand.
For example, the Nike ethos of pure, brash performance was captured in the ―Just Do It‖ slogan
which became a catch phrase for the sports world globally and was personified in ads featuring
sports stars such as Michael Jordan, Maria Sharapova, and many other star athletes. Wieden +
Kennedy, a well established advertising agency has handled Nike‘s accounts for about twenty
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IJGMS 78 2009 Volume 1 Issue 4
Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

years now. It has helped Nike develop a global brand image with one clear brand vision of
targeting the global audience who are sporty, and/or are interested in sports and athletic
activities. The advertising has worked wonders for this global brand in terms of creating a
magnanimous Brand Power.

We believe that advertising creates brand power, and enhances brand equity on a global basis.
Crispin Porter + Bogusky (CP + B) advertising agency has a stellar record of building and
reviving iconic brands and is viewed by many as the most forward thinking agency in the
advertising and communication business. In its initial years, CP+B helped to create BMW Mini
Cooper automobile, a global brand, even with a tighter advertising budget. CP+B grabbed the
attention of the advertising community in 2002 with its award winning campaign created for the
introduction of BMW Mini Cooper. CP+B generated buzz by placing actual Minis in a variety of
odd places such as on top of SUVs that toured the country, and removing seats from sports
stadiums to display the cars at Major League Baseball and NFL games. The agency used little
TV spending and relied heavily on magazine and billboard ads. Brand power was created for
BMW Mini Cooper in the process, and the public relations stunts generated million of dollars
worth of buzz for the Mini.

Goldfarb, Lu, and Moorthy (2009) define brand equity to be the difference between equilibrium
profit for the branded product and an unbranded, store brand, equivalent. Shum (2004) focuses
on a different feature of advertising. Changes in consumer tastes and preferences, the emergence
of new competitors or new technology, or any new development in the marketing environment
can affect the fortunes of a brand. Brand power can help position the brand in the top-of-mind
for the consumers (brand positioning, not just in consumer markets but also in consumers‘
minds) leading to the development of a strong global brand.

Brand loyalty is a preference for a particular brand that results in its repeated purchase.
Marketers strive to position the brand, and develop and maintain brand loyalty among
consumers. They use reminder advertising to keep their brand names in front of consumers,
maintain prominent shelf position and displays in store, and run periodic promotions to deter
consumers from switching brands (Belch and Belch, 2009). In virtually every category, once
admired brands such as Zenith, TWA and GM have fallen on hard times or even disappeared.
Nevertheless, a number of brands have managed to make impressive comebacks in recent years,
as marketers have breathed new life into their customer franchises. Volkswagen, Dr. Scholl‘s
have all seen their brand fortunes successfully turned around to varying degrees in recent years.

In managing brand equity, marketers must recognize the trade-offs between activities that fortify
the brand and reinforce its meaning, such as a well received new product improvement or a
creatively designed ad campaign, and those that leverage or borrow from existing brand equity to
reap some financial benefit, such as short term promotional discount that just emphasizes the
lower price (Kotler and Keller 2009). At some point, failure to reinforce the brand through
positive advertising efforts to highlight the brand power, brand positioning, and sustenance of

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IJGMS 79 2009 Volume 1 Issue 4
Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

brand loyalty will diminish brand awareness and weaken brand image. On the other hand, brand
equity can be strengthened by the creation of brand power, brand positioning and brand loyalty.

Perceived Brand Quality is also a strong factor of brand power. Stronger the customer‘s
perception of brand quality, the stronger will be the power of the brand to command a price
premium and add value to customer and the firm. The ―Curiously Strong‖ campaign developed
by Leo Burnett for Altoids from the Wm. Wrigley Jr. Company won numerous creative awards.
Leo Burnett held Altoids account for 13 years by positioning it firmly in the minds of the
consumers, creating its brand power and generating a lot of brand loyalty. However, Altoid sales
declined and the brand lost its position as the market leader in the breath freshener category,
which led to the decision to change the advertising agency from Leo Burnett to Publicis & Hal
Riney, Chicago. With a strong focus on brand power, brand positioning and brand loyalty, the
clients are willing to change advertising agencies for brands that are underperforming and
starting to lose their equity.

MODEL OF BRAND EQUITY

In Figure 2, we illustrate a five assets model of brand equity given by Aaker (1991). The five
asset dimensions of brand equity are brand loyalty, brand awareness, perceived quality, brand
associations and other proprietary brand assets. This model implicates that brand equity provides
value to the customer, as well as to the firm. In managing brand equity, it is important to be
sensitive as to how value can be created in order to manage brand equity effectively and to make
informed decisions about brand building activities (Aaker, 1996).

The importance of brand equity consists in numerous benefits for companies that own brands.
Brand equity has positive relationship with brand loyalty. More precisely, brand equity increases
the probability of brand selection, leading to customer loyalty to a specific brand (Pitta and
Katsanis, 1995). Over a period of time, there is a dual relationship whereby brand equity leads to
brand loyalty and also, brand loyalty leads to more strengthened brand equity. One of the
benefits provided by high brand equity is the possibility of brand extension to other product
categories. Generally, brand extension is defined as the use of an existing brand name for entry
into a new product category (Aaker and Keller, 1990). When compared to new brand names,
brand extensions have lower advertising costs and higher sales (Smith and Park, 1992).
Successful brand extensions contribute to higher brand equity of the original brand (Dacin and
Smith, 1994; Keller and Aaker, 1992), however, unsuccessful extensions may reduce the brand
equity of the parent brand (Aaker, 1993; Loken and John, 1993). Aaker and Keller (1990)
developed a model for consumer evaluation of brand extensions, and a number of authors
worked on generalization of this model (Barrett et al., 1999; Bottomley and Doyle, 1996; Sunde
and Brodie, 1993).

In services‘ industry, the service provided by employees play an important role in customers‘
evaluations of service performance. An effective way to make service brands tangible is to use as
many physical elements as possible that can be associated with the brand. Bitner (1992) posits
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Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

that, ―the service setting can affect customers‘ emotional, cognitive, and physiological responses,
which in turn influence their evaluations and behaviors‖. Physical environment such as facility
aesthetics, layout accessibility, cleanliness, seating comfort, electronic equipment and display
(Bitner, 1990, 1992) play a significant effect on customer satisfaction, perceived service quality,
intention to repurchase and willingness to recommend. In order to build a positive and lasting
brand perception during the interaction, factors of service quality, such as assurance,
responsiveness and empathy must be a part and parcel of the customers‘ experience. These
factors may lead to customer trust, satisfaction (Zeithaml et al., 1990; Parasuraman et al., 1991),
and loyalty (Lovelock and Writz, 2006). Lacking these factors may create high levels of
customer dissatisfaction and generate a strong customer desire to switch to competitive brands.

For example, Southwest‘s brand (product) positioning is unique in the airline industry. It sees its
competition not just other airlines but any mode of transportation. It typically costs 7.5 cents a
mile to fly a passenger on Southwest Airlines (Torbenson and Marta, 2003). For a traveler in
Southern California going to Las Vegas, the decision is whether it is cheaper to drive, ride a
Greyhound bus or fly SWA. This kind of brand positioning by Southwest Airlines translates into
a lot of brand power and brand loyalty for SWA‘s customers leading to strong brand equity.
Hence, in services‘ branding, principles of brand equity are very important along with the key
brand equity indicators – brand power, brand positioning and brand loyalty.

Brand power, perceived quality, and brand associations can strengthen brand loyalty by
increasing customer satisfaction and providing reasons to buy the product. Even when these
assets are not visibly pivotal to the brand choice, they can reassure the customer, reducing the
incentive to try other brands. The elements of brand equity serve to support premium pricing or
to resist price erosion. Brand equity can enhance the efficiency and effectiveness of marketing
programs. A promotion that provides something new in terms of product attribute or usage will
be more effective if the brand is familiar and if the promotion does not have to influence the
consumer‘s perception of brand quality. An advertisement announcing a new product feature or
model or innovation will generate more interest and stimulate action, if the potential consumer
has a high quality perception of the brand.

A brand, low in brand equity may have to invest more in advertising and promotional activity in
order to maintain its position in the distribution channel. For example, Hyundai and Kia do not
have high brand equity in the Americas as compared to other automobile manufacturers like
Toyota, Honda, Ford, etc. Therefore, to maintain its brand position and to increase its market
share, Hyundai invests more in promotional activities like media advertising, offering longer
comprehensive warranties on its model line-up in order to improve its brand power substantially.
A five year comprehensive new vehicle warranty is offered on all Hyundai cars sold in USA
which no other auto manufacturer offers.

Brands perform valuable functions for firms. They simplify product handling, help in organizing
inventory and records. Brands offer the firm legal protection for unique features or aspects of
the products. The brand name can be protected through registered trademarks; manufacturing
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Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

processes can be protected through patents; and packaging can be protected through copyrights
and proprietary designs. These intellectual property rights ensure that the firms can safely invest
in the brands as valuable assets.

These five brand equity assets shown in figure 2 provides a significant competitive advantage to
the firm and serve as a barrier to prevent customers from switching to competitor brands.

CONCEPT OF GLOBAL BRAND EQUITY – A THEORETICAL FRAMEWORK

Successful global brands operate on important principals of modern management. These


management traits are identified as Visibility, Reliability, Attachment, Exclusivity, Flexibility,
and Brand Stewardship. The above management traits are also the important characteristics of
the global brand. Outstanding brands identify customer insights. When these insights are shared
across cultures they assist in the brand‘s adoption globally. In addition, global brand equity
increases the - (1) willingness of consumers to pay premium prices, (2) possibility of brand
licensing, (3) efficiency of advertising and integrated marketing communications, (4) willingness
of stores to collaborate and provide support, (5) elasticity of consumers to price reductions, and
(6) inelasticity of consumers to prices increases, and reduces the company vulnerability to
marketing activities of the competition and their vulnerability to crises (Barwise, 1993; Farquhar
et al., 1991; Keller, 1993; Keller, 1998; Pitta and Katsanis, 1995; Simon and Sullivan, 1993;
Smith and Park, 1992; Yoo et al., 2000). In general, we can say that brand equity represents a
source of sustainable competitive advantage (Bharadwaj et al., 1993; Hoffman, 2000). We define
the characteristics of the global brand, as follows:

Visibility
Well-performing brands enjoy strong awareness among consumers and opinion leaders. These
brands lead their industry or industries. Think BMW. Car aficionados, reviewers, and loyal
customers laud it with equal enthusiasm. It has come to symbolize ―performance‖ in engineering
and design while signifying that the owner has ―arrived‖ on a personal and professional level.
This type of visibility and recognition represents the nexus of perception and reality enabling
brands to rapidly establish credibility in new markets.

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Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

Figure 2: A five assets model of brand equity (Aaker, 1991)

Reliability
Best brands achieve a high degree of reliability in visual, verbal, auditory, and tactile identity
across geographies. They deliver a consistent reliable customer experience worldwide, often
supported by an integrated, global marketing effort. McDonald‘s is a tremendous example of a
brand that has returned to its roots by shedding distracting acquisitions, simplifying the core
offer, and adhering to a shared message globally. At the same time, McDonald‘s appropriately
modifies its approaches for greater regional relevance. Restaurants in France are more ―café-
like‖ in appearance and the menu is tailored to the local culture. Espresso is in quick supply and
the chairs are neither molded plastic nor bolted to the floor. Similarly, in India, McDonald‘s
offers free home delivery to customers with a minimum purchase order.

Attachment

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IJGMS 83 2009 Volume 1 Issue 4
Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

A brand is not a brand unless it competes along emotional dimensions. It must symbolize a
promise that people believe it can deliver and one they desire to be attached with. This allows
brands to achieve the loyalty of consumers by tapping into human values and aspirations that cut
across cultural differences. Nike has appealed to the athlete in all, regardless of true physical
ability, allowing for a focused message targeted to the mass-market. This has elevated the
discussion beyond tangible aspects of the shoe or apparel to how the customer feels when
wearing and performing in Nike gear.

Exclusivity (Uniqueness)
Great brands represent great ideas. These brands express the uniqueness of position to all internal
and external audiences making them exclusive to their target audience. They effectively utilize
all elements in the communications mix to position themselves within and across international
markets. Apple has creatively addressed its marketing mix while ensuring its people embody its
most ownable and beneficial brand attribute: innovation. The company has once again come to
represent leading-edge technology solutions that become a part of day-to-day life. Apple is
embedded tangibly and emotionally in their consumers‘ habits and practices.

Flexibility
A global brand must respect local needs, wants, and tastes. These brands are flexible and can
adapt to the local marketplace while fulfilling a global mission. HSBC has invested in that very
message by conveying its excellence in financial services, along with its deep knowledge of local
custom and practice. In essence, it is communicating a ―glocal‖ advantage.

Brand Stewardship (Providing Leadership and Direction)


The organization‘s senior leadership must champion the brand, ideally with the CEO leading the
management initiative. A leader‘s continual articulation of the brand philosophy and the brand‘s
view of the world is meant to give the business strategy a recognizable face. This commitment is
crucial, allowing for a unique positioning that transcends local idiosyncrasies and appeals to a
universal aspect of human nature and experience. It is a major step in ensuring that the corporate
culture will put the brand at the heart of everything it does.

In order to build a strong global brand, we need to have a consistent brand image with
dimensions of Visibility, Reliability, Attachment, Exclusivity, Flexibility, and Brand
Stewardship. Consistency of brand image is a part of managing the relationship between the
consumer and the brand. A big part in developing a consistent brand image and managing the
relationship between the consumer and the brand is played by Advertising and Integrated
Marketing and Communications (IMC). Branding can only be successful if the brand is
recognized, understood and acted upon throughout the organization. IMC acknowledges brand
recognition and contributes to the success of branding efforts. IMC strategy is a set of processes
that include the planning, development, execution, and evaluation of coordinated, measurable,
persuasive brand communications program over time with those external and internal audiences
(Shultz et al., 1994)

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Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

The most effective and synergistic IMC is achieved when brand identity is clearly and
consistently communicated to other brand stewards (Madhavaram et al., 2005). Building brand
equity requires the creation of a familiar brand that has favorable, strong, and unique brand
associations. This can be done both through the initial choice of the brand identities into the
supporting marketing program. Advertising and Integrated Marketing Communication (IMC)
may also be helpful in increasing user and usage imagery attributes. Word of mouth and other
social influences also play an important role for user and usage imagery attributes (Keller, 1993).
While Advertising and IMC principles are theoretically proven, the literature provide little
guidance on how to measure the success of advertising and other IMC efforts on branding. As
Grounds (2003) suggest, while the audience forms a brand picture based on the totality of the
communication, evaluation criteria are often too tactical and narrow and that new tools must be
developed to properly evaluate integrated marketing communications.

Figure 3 illustrates our conceptual global brand equity GLOBEQ model. The model takes into
account our conceptualization of ‗Brand Power,‘ discussed in section II. The key brand equity
drivers are a part of the model along with the significant characteristics of the ‗Global Brand,‘
discussed in this section.

The GLOBEQ model as shown in Figure 3 clearly indicates the Global Brand Equity Indicators,
Characteristics and Consequences of the Global Brand. The consequences of the global brand are
the establishment of global brand as an ‗asset,‘ value to customer, value to firm, brand strength
and brand value, market share, market leadership, market growth, and the ability of the brand to
command a premium price.

MODEL OF GLOBAL BRAND EQUITY AND ITS RELATIONSHIP WITH


ADVERTISING

Our conceptual GLOBEQ model (Figure 3) contains global brand equity development through
brand power, brand positioning, brand loyalty, and brand reinforcement through past brand
purchases and brand experiences. The characteristics and consequences of the global brand are
elaborated in the GLOBEQ model. Advertising plays a key role of influencing and enhancing
GLOBEQ. We illustrate the impact of advertising to GLOBEQ framework, in this section.

Colley (1961) indicated that it was possible to measure the results of advertising if specific
advertising‘s objectives are first defined. In the DAGMAR approach (Defining Advertising
Goals for Measured Adverting Results), Colley (1961) illustrates the importance of setting
advertising objectives. Under DAGMAR, an advertising goal involves a communication task
that is specific and measurable. A major contribution of DAGMAR was the specification of
what constitutes a good objective. Colley (1961) noted four requirements or characteristics of
good objectives, given as follows:

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Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

Figure 3: Model of Global Brand Equity (GLOBEQ) – A Conceptual Framework

1. Concrete and Measurable: Objectives must be concrete and measurable. The


communications task or objectives should be a precise statement of appeal or message the
advertiser wants to communicate to the target audience. For example, Foster‘s Beer, after
a successful introduction, saw sales declined significantly. In order to reverse the
downward trend, Foster‘s developed an entirely new positioning campaign with the
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Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
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objectives as strengthening the brand image globally, maximizing global brand presence,
broadening the market base beyond the traditional import beer drinkers and increasing
sales globally. Using a variety of tools including billboards, videos, point-of-sale
promotions, and spot television, the new brand positioning program doubled its unaided
awareness scores, tripled trial, and increased global brand awareness by 40%. In this
case, advertising helped the company strengthen its global brand image by promoting its
global brand equity.

2. Target Audience: A good objective should specify a well defined target audience. It
may be based on descriptive variables such as geography, demographics, and
psychographics (on which advertising media selection decisions are based) as well as on
behavioral variables such as usage rate or benefits sought. For example, Google, the
global online search engine, demonstrated the objective – setting process involved in
Google‘s search for qualified job applicants with the target market specified as qualified
prospective employees; geographically located in San Jose, Seattle, and Boston (around
MIT); and key objectives for Google Labs was to sought out from thousands of
applications only those most qualified candidates, thus saving time and money and
attracting the best employees. The media used by Google Labs objective setting was
billboards, print (tech, science, and professional journals; and college newspapers),
Internet (Linux online blog and home site Web pages), and Public Relations (CBS‘s Sixty
Minutes; ABC World News Tonight; The Wall Street Journal; 200 other media) with a
budget of $948,000.00. This objective setting yielded 2,500 qualified applicants – a
300% increase in applications.

3. Benchmark and Degree of Change Sought: Another important part of setting


objectives through DAGMAR is having benchmark measures to determine where the
target audience stands at the beginning of the campaign with respect to various
communication response variables such as awareness, knowledge, attitudes, image, etc.
The objective should also specify how much change or movement is required such as
increase in awareness levels, creation of favorable attitudes and / or number of consumers
intending to purchase the brand. For example, a preliminary study for a brand may reveal
that awareness is high but consumer perceptions and attitudes are negative. The objective
for the global brand campaign must then be to change the target audience‘s perceptions of
attitudes toward the brand. In case of Google, the objectives were to dispel the image
that Google was a finished product that needed only minor changes, therefore offering
little challenge or innovative opportunities.

4. Specified Time Period: A final consideration in setting advertising objectives is


specifying the time period in which they must be accomplished. The time period should
be appropriate for the communication objective. For example, awareness levels for a
Global Brand can be created or increased fairly quickly through an intensive media
schedule of widespread, repetitive advertising to the target audience. Repositioning of a
product requires a change in consumer‘s perceptions and takes much more time. The
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Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

repositioning of Marlboro cigarettes from a feminine brand to one with a masculine


image, for instance, took several years.

Figure 3 illustrates the basis of our Conceptual Global Brand Equity GLOBEQ model. Figure 4
illustrates how Advertising is directly linked to global branding foundations / principles and is a
driver of Global Brand Equity (GLOBEQ). In Figure 4, advertising objectives are linked to
DAGMAR approach. Advertising objectives lead to following Global Brand foundations.

1. Global Brand Power


2. Brand Positioning
3. Brand Loyalty
4. Brand Reinforcement through past purchases and brand experiences

All these global brand foundations / principles lead to global brand equity in terms of brand
positioning and brand loyalty with consequences as value to consumers, value to firms, and
positioning global brand as ―Asset‖. The outcome of managing global brands as ―assets‖ leads
to brand strength and brand value, as illustrated in Figure 4.

Advertising
DAGMAR
Consequences of the Global Brand –
Approach
as illustrated in Figure 3 – Global
Brand as ‘Asset,’ Customer Value,
Global Brand Equity Value to Organization, Brand
Strength, Brand value, Market
(GLOBEQ) Share, Market Leadership, Market
Growth, and Price Premium

Other IMC
Programs
Figure 4: Relationship of Advertising with Global Brand Equity

I. to Integrated
IMC refers GLOBAL BRAND
Marketing EQUITY
Communications, (GLOBEQ)
which includes SalesMODEL: CASE
Promotions, Direct EXAMPLES
Marketing, Direct Response
Advertising, Interactive Marketing including Internet and Digital Marketing, Public Relations, Publicity and Advertising

Here, we illustrate a few case examples of Global Brands where the GLOBEQ model has worked
and advertising has created a positive impact on the brand and customer equity.

HYUNDAI, the South Korean company, is the fastest-growing automotive brand in the
United States since 2000. Over the past decade Hyundai has transformed itself from a
manufacturer of low-end vehicles that were sometimes an easy target for late-night

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IJGMS 88 2009 Volume 1 Issue 4
Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

comedians, into a global leader in quality. Hyundai Motor America recognized that if the
company is to continue to grow in sales and upscale move, it has to shed forever its brand
image as a builder of economy cars. In 2007, Hyundai Motor America held an agency
review and chose Goodby Silverstein & Partners, San Francisco (GSP), as its new
advertising agency with an objective of ―moving the brand to a whole new place in
consumers‘ heads‖ and developing a brand image to support its premium positioning (Belch
and Belch, 2009). Hyundai Motor America launched an advertising campaign aimed at
reframing the way U.S. consumers think about the Hyundai brand. The integrated marketing
campaign was rather unconventional and challenged consumers‘ perception about the brand
as well as the way they think about cars in general. The tagline for the campaign was ―Think
About It‖ and used a theme of disarming honesty in an effort to break down the barriers that
consumers have built to shield themselves from advertising claims. The goal was to pull
consumers into a new understanding of the automotive world and to challenge their thoughts
about what is and what should be ―standard‖ in the industry.

Today, the statistics and numbers speak for themselves. Consider this – total light vehicle
sales (which includes passenger cars and light trucks) in the United States fell from
13,242,701 in year 2008 to 10,429,553 in year 2009 (Motor Intelligence data - U.S. Light
Vehicle Retail Sales – December 2009) . This translates to a whopping 21.2% drop in sales
on a year on year basis. However, the sales of Hyundai Motor America increased from
401,742 in year 2008 to 435,064 in year 2009 (Motor Intelligence data, 2009) translating to
an increase of 8.3% making Hyundai the only manufacturer other than Kia (Hyundai‘s own
subsidiary) and Subaru which managed an increase in sales during one of the worst economic
downturn in US when the sales of the Big Five (GM, Ford, Chrysler, Toyota, and Honda) fell
24.3% over the last year (Motor Intelligence data, 2009).

CALIFORNIA MILK ADVISORY BOARD (CMAB) is a state agency responsible for


promoting California dairy products. Two decades ago, the agency developed a long range
strategic plan designed to make the state a leading producer of cheese. One of the first steps
taken by the CMAB to implement its strategy was to create a distinct and compelling global
brand identity that would be the focal point of an integrated marketing communications
program (Belch and Belch, 2009). The CMAB created the Real California Cheese seal as a
certification mark to identify natural cheese made in California from California milk. The
seal is placed on many styles and variety of cheeses from California cheese makers who
qualify for and use the seal on their packaging. The seal is also used in all forms of
advertising, on all Real California Cheese coupons and promotions, on point-of-sale
materials at retail stores and even on restaurants menus. The placement of all the seal in all
of the elements of consumer communications reinforces the message and maximizes
awareness of the trademark. From 1995 to 2000, the CMAB ran a very popular campaign
using the tagline ―It‘s the Cheese,‖ which made humorous exaggerated claims that the real
reason people come to California is the cheese (CMAB Homepage, 2009). Later on, in the
year 2000, the CMAB hired a new agency, Deutsch LA, for developing a new creative
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IJGMS 89 2009 Volume 1 Issue 4
Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

strategy to promote California Cheese (Real California Milk Homepage, 2009). The new
campaign was launched with a new tagline, ―Great Cheese Comes from Happy Cows.
Happy Cows Come from California.‖ The humorous ads feature cows that seem to talk,
think, and process the world just as people do. The real success of the campaign is seen in
the numbers as California cheese production has increased more than 400% over the past two
decades, which is three times faster than overall cheese production growth during this period.
The campaign has helped in positioning California as the country‘s leading cheese producer,
in addition to having the happiest cows.

TRAVELOCITY has significantly increased awareness of their brand through the use of
online advertising. After measuring the branding value of their campaign, Travelocity found
that their banner campaign significantly lifted aided awareness of the Travelocity brand by
16% (Travelocity Business Homepage, 2009). Aided awareness refers to the percentage of
respondents who indicated that they are aware of Travelocity when presented with a list of
travel service providers. This greatly exceeds the average lift in awareness of all campaigns
measured which is 6%. The results vary by frequency level - the more times a person saw the
banners, the greater the impact in awareness lift. Among those people who were exposed to
the banners four or more times, the lift in awareness of Travelocity was 44% (Travelocity
business homepage, 2009). While Travelocity‘s overall goal is to sell seats, the company
recognizes that there is a way to measure how successful its online advertising is beyond
counting sales. By quantifying a significant lift in brand awareness and brand power, the
company was able to quantify that more consumers may place Travelocity in their
consideration set when they need to make travel arrangements in the future.

STARBUCKS has more than 13,000 locations around the globe and millions of brand loyal
coffee drinkers with numbers intending to increase to over 40, 000 locations and millions
more customers worldwide. In late 2007, the company reported statistics showing that the
customer visits fell and average in-store transactions also declined by 1%, leading to a fall in
stock process by 6%. This was not good news for Starbucks, especially when McDonalds and
Dunkin Donuts started advertising their own premium blend coffees. McDonalds, at that
time, spent $ 60 million just to promote its new coffee line, compared to approximately $ 38
million – less than 1% of US sales – by Starbucks (Lane, King and Reichert, 2009).

Starbucks achieved success on building the brand through local advertising efforts, Brand
experience and word-of-mouth communications and with no national traditional advertising.
Store environments and merchandising were strong points for Starbucks but a strong national
marketing effort did not exist. Starbucks came up with many less-than-successful marketing
efforts. A full service, sit down restaurant called Café Starbucks, a hip tavern with coffee
undertones - Circadia, and a magazine - Joe Magazine, all failed (Belch and Belch, 2009).

In a bid to rebuild the brand – Starbucks, the company refocused its marketing objectives and
strategies, and, for the first time, rolled out the brand on national television in an attempt to
reach a broader audience and stimulate trial among non-users. The first national TV
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Building Global Brand Equity through Advertising: Developing A Conceptual Framework Of
Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

campaign called ―Pass the Cheer‖ was introduced for 2007 holiday season (Lane, King and
Reichert, 2009). Starbucks focused on feel-good holiday commercials. Widen + Kennedy,
the advertising agency responsible for the Nike‘s ―Just Do It‖ campaign, was hired by
Starbucks to reinforce the brand image worldwide. The IMC budget was also significantly
increased with over $24 million spent in the first six months of 2007 (Lane, King and
Reichert, 2009). This helped in rebuilding and revitalizing the Starbucks image as a global
brand.

SUPER BOWL COMMERCIALS – The commercials on the super bowl has become as
famous as the game itself. The competition is as intense as the action on the field.

The advertising evaluations, the day – after post evaluations occupying the newscasts, chat
rooms, newspapers, and office discussions, all focus on the ―best‖ and ―worst‖ commercials.
These commercials are shown time and time again, analyzed by experts and posted on
numerous websites for further review. Advertising agencies have been let go when their
commercials have not scored well. At $2.6 million for a 30-second spot, clients expect to
win. While viewers have little or no knowledge of what makes a commercial successful, and
while the winning commercials have little or no impact on sales or ROI, some companies and
their ad agencies live and die by the results of the poll (Wall Street Journal, June 2010
article).

The Miller Brewing company feels that spending money to advertise on the Super Bowl has
added a lot of brand loyalty and given a positive brand image for their Miller Lite brand. The
Miller Lite ad steals some of the spotlight from Anheuser Bush by promoting the superiority
of Miller Lite to Bud Light. The company‘s management feels that the brands that decide to
have an integrated campaign which includes a Super Bowl ad will do better that brands that
decide to do a Super Bowl ad and build a campaign around it (Belch and Belch, 2009). A
30-second spot may not change the world but an integrated marketing effort including a
Super Bowl ad will definitely increase the brand power.

The Miller Brewing brand architecture as executed over the last decades was not as
successful as foreseen by management. Range brand strategy and line extension have brought
the Miller in to top 2 of beer brewing industry. The brand concept, brand identity, and brand
positioning in the mind of beer consumers was set by Miller (Wall Street Journal, June 2010
article). Basically it's one mindset to the (one) brand which could be beneficial to the range
of products. The paradox is hidden in the product range itself, segmentation, product (range)
name and positioning within the market. Miller Lite, a light beer, has been the most
successful product of Miller.

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Managing Global Brand Equity......................................Arora, Raisinghani, Arora and Kothari

CONCLUSION

In our research paper, we have presented a model of Global Brand Equity – GLOBEQ model –
showing interrelationships amongst Advertising, DAGMAR, global brand principles, global
brand characteristics, and global brand consequences leading to an emergence of the global
brand. This model is illustrated with the use of case examples of Hyundai, CMAB, Travelocity,
Starbucks, and Miller Brewing Company.

Our conceptual model can be easily linked to online marketing and advertising as well. Online
marketers have traditionally looked at behavioral responses to measure the effectiveness of the
medium. As click–through rates have been declining, critics have been reporting that online
advertising is ineffective. However, looking only at behavioral responses to online advertising
ignores the fact that online advertising can impact a brand‘s equity. Online advertising has been
shown to be cost effective branding vehicle especially when it comes to generating brand recall
and brand interest.

Future research in the field of global brand equity utilizing analogous research methodology can
be conducted in a variety of different ways. Causality may become a viable testing direction for
studying the effects of advertising on global brands. Future researchers will need to enlist all
important possible features of global brand equity, and the use of DAGMAR for setting
advertising objectives for each of these individual features of global brand equity.

Both brand equity and customer equity matter. There are no brands without customers and no
customers without brands. In our GLOBEQ model, we have linked the global brand equity to
advertising. The future research may focus on the concept of customer equity and supply chain
management in our conceptual model. Brands serve as the ―bait‖ that retailers and other channel
intermediaries used to attract customers from whom they extract value. Customers serve as the
tangible profit engine for brands to monetize their brand value. The concept of brand value may
be further researched in our model keeping the entire supply chain and customer equity in sight.

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