Professional Documents
Culture Documents
Journai of Marketing
Vol. 57 (January 1993), 1-22 Customer-Based Brand Equity / 1
sis for making better strategic decisions about target in memory. Then the concept of customer-based brand
market definition and product positioning, as well as equity is considered in more detail by discussion of
better tactical decisions about specific marketing mix how it can be built, measured, and managed. After
actions. Perhaps a firm's most valuable asset for im- the conceptual framework is summarized, areas for
proving marketing productivity is the knowledge that future research are identified.
has been created about the brand in consumers' minds
from the firm's investment in previous marketing pro-
grams. Financial valuation issues have little relevance Brand Knowledge
if no underlying value for the brand bas been created
or if managers do not know how to exploit that value Background
by developing profitable brand strategies. A brand can be defined as "a name, term, sign, sym-
The goal of this article is to assist managers and bol, or design, or combination of them which is in-
researchers who are interested in the strategic aspects tended to identify the goods and services of one seller
of brand equity. Specifically, brand equity is concep- or group of sellers and to differentiate them from those
tualized from tbe perspective of the individual con- of competitors" (Kotler 1991; p. 442). These individ-
sumer and a conceptual framework is provided of what ual brand components are here called "brand identi-
consumers know about brands and what such knowl- ties" and their totality "the brand." Some basic mem-
edge implies for marketing strategies. Cusiomer-hased ory principles can be used to understand knowledge
brand equity is defined as the differentia! effect of brand about tbe brand and how it relates to brand equity.
knowledge on consumer response to the marketing of The importance of knowledge in memory to consumer
the brand. That is, customer-based brand equity in- decision making has been well documented (Alba.
volves consumers' reactions to an element of the mar- Hutchinson, and Lyncb 1991). Understanding the
keting mix for the brand in comparison with their re- content and structure of brand knowledge is important
actions to the same marketing mix element attributed because they influence what comes to mind when a
to a fictitiously named or unnamed version of the consumer thinks about a brand—^for example, in re-
product or service. Customer-based brand equity oc- sponse to marketing activity for that brand.
curs when the consumer is familiar with the brand and Most widely accepted conceptualizations of mem-
holds some favorable, strong, and unique brand as- ory structure involve some type of associative model
sociations in memory. formulation (Anderson 1983; Wyer and Srull 1989).
Conceptualizing brand equity from this perspec- For example, the "associative network memory model"
tive is useful because it suggests both specific guide- views semantic memory or knowledge as consisting
lines for marketing strategies and tactics and areas of a set of nodes and links. Nodes are stored infor-
where research can be useful in assisting managerial mation connected by links that vary in strength. A
decision making. Two important points emerge from "spreading activation" process from node to node de-
this conceptualization. First, marketers should take a termines the extent of retrieval in memory (Collins
broad view of marketing activity for a brand and rec- and Loftus 1975; Raaijmakers and Shiffrin 1981;
ognize the various effects it has on brand knowledge, Ratciiff and McKoon 1988). A node becomes a po-
as well as how changes in brand knowledge affect more tential source of activation for other nodes either when
traditional outcome measures such as sales. Second, external information is being encoded or when inter-
marketers must realize that the long-term success of nal information is retrieved from long-term memory.
all future marketing programs for a brand is greatly Activation can spread from this node to other linked
affected by the knowledge about the brand in memory nodes in memory. When the activation of another node
that has been established by the firm's short-term mar- exceeds some threshold level, the information con-
keting efforts. In short, because the content and struc- tained in that node is recalled. Thus, the strength of
ture of memory for the brand will influence the ef- association between the activated node and all linked
fectiveness of future brand strategies, it is critical that nodes determines the extent of this "spreading acti-
managers understand how their marketing programs vation" and the particular information that can be re-
affect consumer leaming and thus subsequent recall trieved from memory. For example, in considering a
for brand-related information. soft drink purchase, a consumer may think of Pepsi
The next section provides a conceptualization of because of its strong association with the product cat-
brand knowledge by applying some basic memory no- egory. Consumer knowledge most strongly linked to
tions. Brand knowledge is defined in terms of two Pepsi should also then come to mind, such as per-
components, brand awareness and brand image. Brand ceptions of its taste, sugar and caffeine content, or
awareness relates to brand recall and recognition per- even recalled images from a recent advertising cam-
formance by consumers. Brand image refers to the set paign or past product experiences.
of associations linked to the brand that consumers hold Consistent with an associative network memory
FIGURE 1
Dimensions of Brand Knowledge
BRAND
AWARENESS
Price
- . . • • ' * ' ' '
Packaging
Non-Product-Related
User imagery
Attributes
BRAND
Product Related Usage Imagery
KNOWLEDGE
^ Types of Functional
Brand Associanon Benefits
Experiential
Favorability of
Brand Associations
Attitudes Symbolic
Strength of
Brand Associations
Uniqueness Qf
Brand Associations
Managing Customer-Based Brand Equity tentially can create value for the brand by improving
According to the definition of customer-based brand consumers' ability to recall or recognize the brand and/
equity, no single number or measure captures brand or by creating, maintaining, or changing the favora-
equity. Rather, brand equity should be thought of as bility, strength, or uniqueness of various types of brand
associations. By infiuencing brand knowledge in one
a muhidimensional concept that depends on (I) what
or more of these different ways, marketing activity
knowledge structures are present in the minds of con-
can potentially affect sales.
sumers and (2) what actions a firm can take to capi- Second, marketers should define the knowledge
talize on the potential offered by these knowledge structures that they would like to create in the minds
structures. Different firms may be more or less able of consumers—that is, by specifying desired levels of
to maximize the potential value of brand according to awareness and favorability, strength, and uniqueness
the type and nature of marketing activities that they of product- and non-product-related attributes; func-
are able to undertake. Nevertheless, six general guide- tional, experiential, and symbolic benefits; and over-
lines based on the preceding conceptual framework all attitudes. In particular, marketers should decide on
are presented here to help marketers better manage the core needs and wants of consumers to be satisfied
customer-based brand equity. by the brand. Marketers should also decide the extent
First, marketers should adopt a broad view of mar- to which it is necessary to leverage secondary asso-
keting decisions. Marketing activity for a brand po- ciations for the brand—that is, link the brand to the
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