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Session - 18 - Conceptualizing, Measuring, and Managing Customer-Based Brand Equity
Session - 18 - Conceptualizing, Measuring, and Managing Customer-Based Brand Equity
REFERENCES
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M UCH attention has been devoted recently to the or divestiture purposes. Several different methods of
concept of brand equity (Aaker and Biel 1992; brand valuation have been suggested (Barwise et al.
Leuthesser 1988; Maltz 1991). Brand equity has been1989; Wentz 1989). For example, Interbrand Group
viewed from a variety of perspectives (Aaker 1991; has used a subjective multiplier of brand profits based
Farquhar 1989; Srivastava and Shocker 1991; Tauber on the brand's performance along seven dimensions
1988). In a general sense, brand equity is defined in (leadership, stability, market stability, interational-
terms of the marketing effects uniquely attributable to ity, trend, support, and protection); Grand Metropol-
the brand-for example, when certain outcomes re- itan has valued newly acquired brands by determining
sult from the marketing of a product or service be-the difference between the acquisition price and fixed
cause of its brand name that would not occur if the
assets. Simon and Sullivan (1990) define brand equity
same product or service did not have that name. in terms of the incremental discounted future cash flows
There have been two general motivations for
that would result from a product having its brand name
studying brand equity. One is a financially based mo-
in comparison with the proceeds that would accrue if
tivation to estimate the value of a brand more pre- the same product did not have that brand name. Based
cisely for accounting purposes (in terms of asset val-
on the financial market value of the company, their
uation for the balance sheet) or for merger, acquisition,
estimation technique extracts the value of brand eq-
uity from the value of a firm's other assets.
Kevin Lane Keller is Associate Professor of Marketing and Fletcher Jones
Faculty Scholar for 1992-1993, Graduate School of Business, Stanford
A second reason for studying brand equity arises
from
Univerity. This article was written while the author was Visiting Profes- a strategy-based motivation to improve market-
sor at the Australian Graduate School of Management, University of ing productivity. Given higher costs, greater compe-
New South Wales, Sydney, Australia. He thanks David Aaker, Sheri tition, and flattening demand in many markets, firms
Bridges, Deborah Macinnis, John Roberts, John Rossiter, Richard Stae-
seek to increase the efficiency of their marketing ex-
lin, Jennifer Aaker, and the anonymous JM reviewers for detailed, con-
structive comments. penses. As a consequence, marketers need a more
thorough understanding of consumer behavior as a ba-
Journal of Marketing
Vol. 57 (January 1993), 1-22 Customer-Based Brand Equity / 1
Brand awareness plays an important role in con- Types of brand associations. Brand associations
sumer decision making for three major reasons. First, take different forms. One way to distinguish among
it is important that consumers think of the brand when brand associations is by their level of abstraction (Alba
they think about the product category. Raising brand and Hutchinson 1987; Chattopadhyay and Alba 1988;
awareness increases the likelihood that the brand will Johnson 1984; Russo and Johnson 1980)-that is, by
FIGURE 1
Dimensions of Brand Knowledge
Leverage Compare characteristics of secondary Provide insight into the extent to which
associations with those for a primary brand associations to a particular person,
brand association (indirect measure) place, event, company, product class, etc.
Ask consumers directly what inferences are linked to other associations,
they would make about the brand based producing secondary associations for the
on the primary brand association (direct brand
measure)
'This table describes the indirect approach of assessing potential sources of customer-based brand equity by measuring bran
knowledge. The direct approach to measuring customer-based brand equity involves measuring the effects of brand knowledg
on consumer response to marketing-for example, by conducting experiments in which one group of consumers respond to
element of the marketing mix when it is attributed to the brand, and another group of consumers respond to the same marketin
mix element when it is attributed to a fictitiously named or unnamed version of the product or service.
Managing Customer-Based Brand Equity tentially can create value for the brand by improving
consumers' ability to recall or recognize the brand and/
According to the definition of customer-based brand
or by creating, maintaining, or changing the favora-
equity, no single number or measure captures brand
bility, strength, or uniqueness of various types of brand
equity. Rather, brand equity should be thought of as
associations. By influencing brand knowledge in one
a multidimensional concept that depends on (1) 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 frameworkall 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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