Customer Based Brand Equity ? A Pragmatic Approach

Customer Based Brand Equity ? A Pragmatic Approach

Customer Based Brand Equity ? A Pragmatic Approach

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Dr.K.Krishnakumar, Lecturer in Commerce, Periyar University, Salem ? 636 011

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Introduction

In the new era of a globalized market place, brands are key drivers of economic values of a corporation. In the new emerging business scenario, brands offer the capacity to add value which is perhaps unmatched by any of the assets which once enjoyed honour. Brands are the basis of consumer relationship and brands are becoming the most valuable assets that a business can possess. Markets, which were earlier protected, are now being liberalized. Product commonality is a major headache for marketers. Thus, marketers are left with a challenge: how to achieve differentiation which is valued by the customers. Brands in this context are new business warriors. They connect corporations with customers. Brands are wealth generators of the twenty-first century. As a result, brand management has long since grown into a vital ingredient for success in corporate strategy.

����������� From the marketer?s point of view the brand is a value, the brand name of the product marketed by them should be leads to attain brand equity. From the consumers point of view a brand which comprises of benefits. It means benefits in the sense of utility and service. A brand said to have equity when the consumers are prefer to buy a branded one instead of unbranded commodity. When a consumer who is able to recall the brand name and its attributes for the long period where the brand is having a equity. From that point of view of brand equity, it is the extension of brand loyalty and brand knowledge. So in this critical situation the marketers are supposed to create a value for their brand. But here some questions are raised, What is that value? How can create a value and what are the parameters for creating value to a particular brand? In recent years customer-based brand equity (CBBE) has garnered considerable attention in both academic and non-academic researches. Developing further insights into the measurement of consumer based brand equity is important in the face of prominence of branding. Hence the aim of this paper is to identify various elements and parameters for identifying the value, that is customer based brand equity.

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Brand Equity

The concept brand equity has emerged as the central concept in marketing over the past 20 years. Much attention has been devoted recently to the concept of brand equity. The concept of ?brand equity? is generally considered to refer to that part of the value of a product that is attributable to the brand name. From a managerial point of view, Farquhar (1989) defines brand equity as the ?added value? with which a brand name endows a product.� Aaker (1991) defines brand equity is a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm?s customers. For assets or liabilities to underlie brand equity they must be linked to the name and/or symbol of the brand. More generally, it has suggested that brand equity be considered from the perspective of three separate entities: firm, trade and consumer. From the firm perspective, brand equity is incremental cash flow arising from use of the brand name. From the trade perspective, brand equity is leverage (in terms of acceptance and distribution) arising from using the brand name. From the consumer perspective, brand equity is generally considered to be something to do with ?value?.

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Customer Based Brand Equity

��������������� Customer-Based Brand Equity is formally defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand. A brand is said to have positive customer-based brand equity when consumers react more favourably to a product and the way it is marketed when the brand is identified than when it is not (e.g., when the product is attributed to a fictitious name or is unnamed). (Kevin Lane Keller 2004).Thus, a brand with positive CBBE equity might result in the consumers? acceptance of a new brand extension, less sensitiveness to price increases and withdrawal of advertising support, or willingness to seek the brand in a new distribution channel. On the other hand, a brand is said to have negative customer-based brand equity if consumers react less favourably to marketing activity for the brand compared with an unnamed or fictitiously named version of the product. The main ingredients of consumer based brand equity are differential effect, brand knowledge, consumer response in marketing.

The followings are the some of the important building blocks identified as the crucial elements of customer based brand equity.

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Brand Loyalty

This is major component of brand equity. Brand loyalty, a long a central construct in marketing, is a measure of the attachment that a customer has to brand. If the customer continue to purchase one particular brand even in the face of competitors with superior features, price and convenience where we can find the brand loyalty. It reflects how likely a customer will be to switch to another brand, especially when that brand makes a change, either in price or in product features. It is one indicator of brand equity which is demonstrably linked to future profits. Brand loyalty is qualitatively different from the other major dimensions of brand equity in that it is tied more closely to the use of experience. Brand loyalty cannot exist without prior purchase and use experience. It is a basis of brand equity that is created by many factors, chief among them being the use experience. (Aaker 1991) defines loyalty as ?the attachment that a customer has to a brand? and consider it to be a primary dimension of brand equity. In contrast, Keller (1993) views loyalty as a consequence of brand equity, i.e. when favourable attributes results in repeated purchase. (Yoo and Donthfu 2001) defines brand loyalty from the attitudinal perspective that ?the tendency to be loyal to a focal brand, which is demonstrated by the intention to buy the brand as a primary choice?�

Brand Knowledge

����������� From the perspective of the CBBE model, brand knowledge is the key to creating brand equity, because it creates the differential effect that drives brand equity. What marketers need, then, is an insightful way to represent how brand knowledge exists in consumer memory. In particular brand knowledge can be characterized in terms of two components: brand awareness and brand image. Brand awareness is related to the strength of the brand node or trace in memory, as reflected by consumers? ability to identify the brand under different conditions (Rossiter, J.R, and Piercy.L (1987). Brand image can be defined as perceptions about a brand as reflected by the brand association held in consumer memory. A positive brand image is created by marketing programmes that link strong, favourable, and unique associations to the brand in memory. The brand knowledge effects through brand awareness and brand association, the benefits of brand are underlined as outcomes. Therefore brand knowledge entails significant activities leading to brand loyalty and equity. In brief brand knowledge encompasses the consumer?s ability relating to the awareness of the product, product features, where the product is available, company that makes the product, how the product is used and for what purpose and the specific and distinctive features of the product.

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Brand Awareness

����������� Brand awareness refers to the strength of the brand presence in the consumer?s mind. It is the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category. This refers to the strength of a brand?s presence in consumers? mind. Brand awareness is an important component of brand equity (Aaker, 1991; Keller, 1993). It is believed that brand awareness is improved to the extent to which brand names are chosen that are simple and easy to pronounce or spell; familiar and meaningful; and different, distinctive and unusual. Brand awareness consists of brand recall and brand recognition. A brand can increase the demand for a product in several ways. Brand awareness makes it easier for consumers to identify products with the well-known brand names (Mary W.Sullivan 1998). Therefore, brands provide information by increasing awareness and serving as a proxy for quality. Brands can also appeal to a consumer?s sense of individuality or make consumers feel as if they belong to a particular social group. �Brand awareness can be characterized according the depth and breath. The depth of brand awareness concerns the likelihood that a brand element will come to mind and the ease with which it does so. The breath of brand awareness concerns the range of purchase and usage situations in which the brand element comes to mind. The breath of brand awareness depends to a large extent on the organization of brand and product knowledge in memory.

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Perceived Quality

������� Perceived quality can be defined as the customer?s perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative

Source: http://articlesinside.co.cc/advertising/customer-based-brand-equity-a-pragmatic-approach

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