An Approach to the Measurement, Analysis, and Prediction of Brand Equity and Its Sources

The authors propose a new approach for measuring, analyzing, and predicting a brand's equity in a product market. Brand equity is defined as the incremental contribution ($) per year obtained by the brand in comparison to the underlying product (or service) with no brand-building efforts. The incremental contribution is driven by the individual customer's incremental choice probability for the brand in comparison to his choice probability for the underlying product with no brand-building efforts. The approach takes into account three sources of brand equity-brand awareness, attribute perception biases, and nonattribute preference-and reveals how much each of the three sources contributes to brand equity. This is done by taking into account not only the direct effects of these three sources on choice probabilities, but also the indirect effects through enhancing the brand's availability. The method provides what-if analysis capabilities to predict the likely impacts of alternative strategies to enhance a brand's equity. The survey-based results from applying the method to the digital cellular phone market in Korea show that the proposed approach has good face validity and convergent validity, with brand awareness playing the largest role, followed by nonattribute preference.

[1]  J. Aaker,et al.  Dimensions of Brand Personality , 1997 .

[2]  John D. C. Little,et al.  Models and Managers: The Concept of a Decision Calculus , 2016, Manag. Sci..

[3]  P. Schmidt,et al.  Limited-Dependent and Qualitative Variables in Econometrics. , 1984 .

[4]  K. Dinnie.  ‘Brand leadership’ , 2000 .

[5]  Gary J. Russell,et al.  A Relationship between Market Share Elasticities and Brand Switching Probabilities , 1998 .

[6]  Larry Percy,et al.  Strategic Brand Management (2nd ed.) , 2005 .

[7]  Allan D. Shocker,et al.  Brand equity : a perspective on its meaning and measurement , 1991 .

[8]  B. Wernerfelt,et al.  An Evaluation Cost Model of Consideration Sets , 1990 .

[9]  Abel P. Jeuland,et al.  The Interaction Effect of Preference and Availability on Brand Switching and Market Share , 1979 .

[10]  G. Maddala.  Limited-dependent and qualitative variables in econometrics: Introduction , 1983 .

[11]  Peter C. Verhoef,et al.  Customer Equity: Building and Managing Relationships as Valuable Assets , 2002 .

[12]  G. Urban,et al.  Pre-Test-Market Evaluation of New Packaged Goods: A Model and Measurement Methodology , 1978 .

[13]  Michael Birkin,et al.  Assessing Brand Value , 1994 .

[14]  Mary W. Sullivan,et al.  The Measurement and Determinants of Brand Equity: A Financial Approach , 1993 .

[15]  V. Srinivasan.  Network Models for Estimating Brand-Specific Effects in Multi-Attribute Marketing Models , 1979 .

[16]  Paul Feldwick,et al.  What is Brand Equity Anyway, and how do you Measure it? , 1996 .

[17]  Raymond R. Burke,et al.  Brand equity and the extendibility of brand names , 1993 .

[18]  Gary J. Russell,et al.  Measuring Brand Value with Scanner Data , 1993 .

[19]  D. Aaker.  Building Strong Brands , 1995 .

[20]  P. Nedungadi.  Recall and Consumer Consideration Sets: Influencing Choice without Altering Brand Evaluations , 1990 .

[21]  V. Srinivasan,et al.  Evaluating the Multiple Effects of Retail Promotions on Brand Loyal and Brand Switching Segments , 1992 .

[22]  A. Winsor.  Sampling techniques. , 2000, Nursing times.

[23]  P. Tuominen.  Managing Brand Equity , 1999 .

[24]  L. Lodish,et al.  Sales Force Sizing and Deployment Using a Decision Calculus Model at Syntex Laboratories , 1988 .

[25]  V. Srinivasan,et al.  A Survey-Based Method for Measuring and Understanding Brand Equity and Its Extendibility , 1994 .

[26]  Paul E. Green,et al.  Conjoint Analysis in Marketing: New Developments with Implications for Research and Practice , 1990 .

[27]  Donald R. Lehmann,et al.  Revenue Premium as an Outcome Measure of Brand Equity , 2003 .

[28]  Larry Percy,et al.  Strategic Brand Management , 2007 .

[29]  Jordan J. Louviere,et al.  The equalization price: A measure of consumer-perceived brand equity , 1993 .

[30]  John Roberts,et al.  Development and Testing of a Model of Consideration Set Composition , 1991 .

[31]  Allan D. Shocker,et al.  Managing Brand Equity , 1991 .