University of Applied Sciences
Final paper for the obtainment of the
Master of Arts degree
The Relationship Between Brand Equity Aspects and Brand Extension Process
in the study course Open Media Master
Media and Communication Management
Prof. Dr. Brigitte Kleinselbeck
Second first Examiner:
Prof. Dr. Markus RometschSubmitted by:
First name family name: Mehmet Cem Akdemir
Student ID-number: B-37373
Study course: M.A. in Media and Communications Management
Table of Contents
List of tables
List of figures
Types of Brand Extension6
Benefits and Risks of Brand Extension10
Brand Equity Definitions14
Measurement of Brand Equity and Brand Equity Aspects17
Keller’s Customer Based Brand Equity Model 17
Keller’s Brand Equity Pyramid20
Aaker’s Brand Equity Model24
Working Brand Equity Model29
Empirical Research Methodology33
Purpose and Research Methodology33
Data Collection Tools33
Place, Time and Data Collection Method34
The Universe of Research and Sampling34
Ethical Aspect of the Research34
Statistical Analysis and Interpretation of Data34
Limitations of Study36
The world of commerce is distinguished by brands. As a consumer, one has a wide range of brands to choose from. Certain brands are better known than others be-cause of the value that has been placed on them by the consumer. Brand extension can be considered by firms to monetize the brand value that is already present in a brand. Companies are now using brand extension as a growth strategy because of the value they can derive from a brand. This thesis looks into, the relationship between Brand Equity Aspects and Brand Extension Process. It also analyses whether there is a difference or relationship between the socio-demographic factors and Brand Equity Aspects and Brand Extension.
Brand equity, brand extension, brand equity aspects, brand value, brand equity measurement, vertical extension, line extension, category extension
List of Tables
Table 1: Perspectives and Aspects of Brand Equity16
Table 2: Perspectives and Comparison of Brand Equity Models29
Table 3: Some socio-demographic characteristics of the research group I37
Table 4: Some socio-demographic characteristics of the research group II 38
Table 5: Distribution of the research group’s thoughts about “Brand Identity / Awareness” 38
Table 6: Distribution of the research group’s thoughts on “Brand Meaning / Perceived Quality39
Table 7: Distribution of the research group’s thoughts on “Brand Response / Brand Association”40
Table 8: Distribution of the research group’s thoughts on “Brand Loyalty / Resonance” 41
Table 9: Distribution of Brand Equity Aspects and Brand Extension scores in the Research Group42
Table 10: Results of the Correlation Analysis between Brand Aspects and Brand Extension in the Research Group (Pearson Correlation)43
Table 11: Comparison of Brand Equity Aspects and Brand Extension Scores by Gender in the Research Group (Independent Samples T Test) 44
Table 12: Comparison of Brand Equity Aspects and Brand Extension Scores by Marital Status in the Research Group (Independent Samples T Test) 45
Table 13: Comparison of Brand Equity Aspects and Brand Extension Points by Country of Living in the Research Group46
Table 14: Comparison of Brand Factors and Brand Extension Points According to Educational Status in the Study Group (One-way ANOVA) 47
Table 15: Results of the Relationship Analyses between Age, Monthly Income and Brand equity Aspects and Brand Extension in the Research Group (Pearson Correlation) 48
List of Figures
Figure 1. Conceptualizing brand extension evaluations7
Figure 2. Brand extension types9
Figure 3. Framework for measuring brand value13
Figure 4. Keller’s brand equity pyramid22
The value of existing brands is beginning to be recognized by firms. It has be-come one of the strategies firms are adapting as their growth strategy. Researchers such as Keller, Kapferer, Aaker among others have further to examine what constitutes to brand extension.
Accordingly, to Kapferer, brand extensions have now become common practice across industries while in the past brand extensions were restricted to the luxury goods sector (Kapferer, 2008). Keller also says that engaging in brand extension is possibly the most profitable idea for firms to launch new products and capture higher share in the current market. (Keller et al., 2008) A brand is considered an asset according to Aaker. It is the source of creating value. The equity of a brand can be determined by the assets and liabilities that a brand is associated with. (Aaker, 1991)
Brand extension has been defined by researchers Kim, Lavack ; Smith as, ‘the application of an established brand name to new products in order to capitalize on the equity of the original brand name and to capture new market segments” (Kim, Lavack & Smith, 2001, p. 211)
This thesis explores the importance of different aspects of brand equity on the brand extension process. The paper first establishes what a brand is, and what brand extension means according to various theorists and researchers. Careful research of the different types of brand extension is studied. Also, the risks and benefits of incorporating any brand extension strategy is considered. Brand value which determines what the financial value placed on a brand is also looked into.
Brand equity as defined by several researchers and theorists will be studied extensively. The various aspects that constitute the measurement of brand equity. Further the paper will examine two renowned models: Customer based brand equity model by Kevin L. Keller and Brand Equity model of David Aaker.
This will lead the researcher to combining of the two brand equity models dis-cussed here which help establish the hypotheses and research question of the thesis. The scientific research that will be conducted through this paper will address the primary and secondary hypotheses.
The hypotheses will be tested with the empirical social research method, an online survey. The survey will attempt to address the relationship between brand equity aspects and brand extension. SPSS tools will be utilised to analyse the results of the survey which will help approve or disapprove the hypotheses established earlier in the paper.
According to the American Marketing Association (AMA), a brand is “a name, term, logo or symbol, sign or combination of them to differentiate the product or services of seller from the competition”. (AMA, 1995)
David Ogilvy in his book, “Ogilvy On Advertising” terms brand as, “The intangible sum of a product’s attributes: its name, packaging, and price, its history, its reputation, and the way it’s advertised.” (Ogilvy, 2011).
In deed it is one of those terms which has been defined by many people and companies. Jerry McLaughlin the co-founder and CEO of branders.com in a Forbes article, says that, the first definition of brand is the name given to a product or service from a specific source. (Mc Laughlin, what is a brand, anyway? 2011)
It can be noted that, all brands have certain specific characteristics which they are identified and differentiated by, which is what makes it unique. Brand building ac-cording to Jerry McLaughlin is the deliberate and skilful application of effort to create a desired perception in someone’s mind. (Mc Laughlin, 2011)
Brands have several valuable functions. At a basic level, they are what the firm has a primary offer. As far as the customers are concerned, brands are the choices they make, which promises them quality, reduces risk and/or trust they could have. Brands reflect the complete experience once has with products. They play a crucial role in determining the effectiveness of marketing efforts as advertising and channel placement. They are also a financial asset. Therefore, one can say, brands manifest their impact at three primary levels- customer market, product market and financial market. And the values accrued by all the factors is what could be called brand equity. (Keller and Lehmann, 2006)
A brand suggests a product’s value, facilitate trade and promote efficiency. By this it insulates itself from competition. (Park et al. 1986) When a brand is managed properly, it can add dimensions to a product or service and help differentiate it from its competitors in the same field that satisfies an identical need. (Kotler & Keller, 2005)
These days brands are built with a particular consumer type in mind, since brands are primarily consumed by a particular type of consumer depending on who they are, who they wish to be and who they wish to be seen as. (Elliot & Wattanasuwan, 1998; Kay 1995; Simoes & Dibb, 2001)
Name recognition can be considered as the one of the most cited features of any successful firms. (Aaker, 1989) This is particularly true to repurchase decisions which rely heavily on the customer’s previous experiences. (Levitt, 1990) Kotler did bring to attention that brands are often expressed through the leverage of their name, symbol or logo, that is, these are the parts that can be vocalized or communicated (Kotler, 1998)
While creating and building a brand, and to create equity for the brand, according to Keller, a number of broad criteria has been identified on how to choose and design it; they are:(Keller, 1998)
3. Aesthetic appeal
4. Transferability both within and across product categories as well as across prod-uct categories as well as across geographical and cultural boundaries and market segments
5. Adaptability and flexibility over time
6. Legal and competitive protectability and defensibility
A brand name is often seen as a complex symbol that represents a variety of ideas and attributes. It tells consumers not just the way it sounds but also what has been built up and acquired as a public object over a period of time. (Gardner and Levy, 1955) It can be said that brands lend symbolic meaning to products, adding on their functional benefits. (Janiszewksi and van Osselaer, 2000) The symbolic meaning is also used as a medium to develop a social identity for the consumer. (Holt, 2003) Furthermore, this symbolic meaning is used to delineate and communicate traits of the individual’s self- concept and that enables the consumers to develop an affiliation with the brand to the point of identification. (Lin, 2010)
Companies with major brands have a major asset. The asset, they say can be goodwill, loyalty, reputation or preference. This makes it a powerful and lasting asset, and a company can make profits out of it for years. This can be called equity in brand marketing terms. (Arnold, 1992)
In order for brands to consider brand extensions, companies must leverage the brand equity it holds. (Keller, 2002)
Consumers have a wide selection in brands in the market nowadays, which causes a competitive business world. Some brands are more well-known and have a better image in consumers’ eyes, so that their brand value also differs in the market. (Kavas, 2004) Brand extension is one of the practices for companies to turn that brand value into another profitable step. Brand extension is defined as “application of an established brand name to new products in order to capitalize on the equity of the original brand name and to capture new market segments” (Kim, Lavack ; Smith, 2001, p. 211). As companies realised the values of their brand name, they have started to use brand extension as a growth strategy for the last decades. And it has become one of the most frequently used branding strategies. A strong brand name can make a new product distinguish from the competition by reputation, perceived quality, functions and trust. while also giving the marketers ability to reach to an existing customer base which provides lower product introduction expenses. It can create easiness to understand the key associations of the extended brand. It strengthens a brand’s awareness to ease the recall; raise the value perceived (Keller, 2003).
Brand extensions which is the use of an established brand name to launch new products is one the most frequently used branding strategies. Extending a brand beyond the original product category is deemed a profitable business to undertake. As mentioned earlier, it is perceived that brands that are already known and recognised require lower new product introduction expenses such as advertising, trade deals, or price promotions. (Collins-Dodd & Louviere 1999- Tauber 1988)
In today’s marketing environment, brand extension strategy has in fact been favoured to other new product launch options. The benefits that brand extension delivers can be said as (Verma, 2012):
Cost of new launches: A new brand costs way more money to develop and launch. (Verma, 2012)
Promotional efficiency: When a company needs to support a large number of individual brands, the promotion cost structure goes up. Thereby extensions of the same brand name can enhance promotional efficiency. (Verma, 2012)
Consumer benefits: When a consumer is already aware of a particular brand, and a company launches a new product, familiarity with a brand name reduces the risk perceived by the prospect in a brand buying situation. (Verma, 2012)
Returns: The McKinsey Quarterly study on brand leverage conducted in 1999, which explored the returns connected with brands found that strong brands are able to return as much as 1.9 percent above the industry average. (Court, Mark, 1999) as cited by (Verma, 2012)
As the application of extensions spread to different industries, successful brands also shown up in the scene. Yamaha, for example have been stretching their brand from musical instruments to marines and motorcycles. By maintaining their customer satisfaction on the highest level (Constar Blue, 2015) the company also managed to have a stable rise in total assets for the last years (Statista 2018). Philips is also a successful example. The brand extended from coffee machines, TV units to medical systems, semiconductors.
Despite those applications, successful brand extension processes are usually uncertain. (Nielsen, 1999) suggests “that approximately 80% of the fast-moving consumer goods extensions fail.” For almost every successful extension, there are more counter failures. Colgate, the famous tooth paste brand, went into food production business but the outcome was a fiasco. Colgate logo, generally related to strong mint flavour, wasn’t well perceived on food products. Zippo: The Women Perfume, is another case where the strong association with the mother brand caused a negative image of the extended product. Even all the marketing push, Zippo Perfume was looking like a big lighter shaped perfume, reminding spraying lighter fluid to yourself. In those cases, failures related to missing “brand fit”. Brand fit is defined when “marketing managers extends the brand to stay within the range of their key brand identity elements and “fit” the extension product to the parent brand’s identity.” (Viot, 2011).
Brand extension is a function of connections a brand enjoys in the minds of the customers. Some brands can focus more on the product rather than the brand. One can say product drives the brand in this case in which case the scope is limited. However, various brands break away from product orientation to reflect their customers. These reflections can be aspirations, images, emotions, values and experiences. For instance, Body Shop the UK based brand, is not just a cosmetic brand it is considered a powerful philosophy. Customers don’t just buy Body Shop products for their cosmetics, but also for the ideology behind the products. (Verma, 2012)
Nowadays, brand extensions have become common practice across industries while in the past brand extensions were mainly introduced in the luxury goods sector (Kapferer, 2008).
Marketers recognize the value of their existing brands, which lead them to introduce new products under already existing brand names. As new product launches involve high costs and have to gain a new customer base and furthermore, they have no existing brand awareness or loyalty, brand extension is a crucial tool of marketers. Due to rising global competition, product innovation is imperative to a company’s success. This has led to firm’s engaging in brand extensions as they may be the most fruitful way for firms to launch new products and also garner market share. (Keller et al., 2008)
To site an example, the brand Mars is not only available as a chocolate brand but also as an ice cream, a chocolate drink, chocolate syrup and much more. French fries in the US was synonym to McCain but today the firm also sells pizzas, buns and iced tea (ibid). Firms such as Mars Inc. and McCain Foods Limited have recognized that brands are the real capital of the company and a source of competitive advantage. (Pitta & Katsanis, 1995; Quelch & Harding, 1996).
The brand extension perspective introduces two radical modifications. First of all, it maintains that a brand is a single and long-standing promise, but this promise can or should be expressed and embodied in different products, and eventually in different categories. If we are to look at the example of Palmolive as a brand, it represents softness and from this, it makes sense to have Palmolive hand wash, dish washing liquid, shaving cream, shampoo and so on. (Kapferer, 2012)
Types of Brand Extension
Brand extension essentially involves leveraging an existing brand to promote a product into a different category. (Verma, 2012)
Earlier research has shown that in order to have a successful brand extension, the parent brand should have favourable associations and consumers must perceive a high degree of bit between the parent brand and the extension category (Keller and Aaker 1992, Romeo 1991) The brand associations both the parent brand and the extension category can be characterized by a range of emotions such as feelings, thoughts, images, beliefs and perceptions that a consumer has towards a brand or product. Some of the important aspects the parent brand must have are: high quality like ability and trustworthiness. (Keller, 2012)
A fit between the parent brand and extension category can result from a number of different causes such as (1) overall similarity between the parent brand and extension category, (2) technical or manufacturing commonalities, (3) complementarities in usage occasions or users, and (4) relevance of brand-specific associations in the extension category. (Keller, 2012) The other factors according to Keller which increase the likelihood of extension are the past consumer usage of the parent brand, marketing support that highlights the benefits of the brand extension and wide retail distribution (Broniarczyk & Keller 2011)
The below figure demonstrates a very simple brand extension model that takes into consideration the important considerations for brand extension. Here it can be seen that the parent brand can have multiple products in different categories. In the same way, the extension category can also have multiple competitors. The various characteristics of the parent brand and extension category is what the customer looks into to see if it is deem fit for him or her. It also depends on the consumer’s motivation, ability and opportunity and the level of involvement of the consumer while evaluating the extension and the manner in which he or she does the evaluation while making his final choice. (Ahluwalia 2008, Lane and Jacobson 1995, Ng 2010, Yorkston et al. 2010)
Figure 1. Conceptualizing brand extension evaluations. Adapted from Economic and Behavioural Perspectives on Brand Extension, by Keller, K. (2012). Marketing Science, 31(5), 772-776. Retrieved from http://www.jstor.org/stable/41687965
From the above figure, one can decipher that there are, a number of interesting factors which of these that can be delved into. First up, it is the tendency of consumers to have stronger feelings about the elasticity of a brand when it has proven itself in multiple domains. That is to say that perceptions are more complex when a brand is associated with many products. (Kayande et al. 2007, Meyvis and Janiszewski 2004, Monga and Roedder John 2010, Shine et al. 2007). Secondly, often brand extensions fail not because they are not good, but because they are not good enough when compared the existing alternatives. Hence, competitive considerations are critical. (Swaminathan et al. 2001) Thirdly, consumers attitude towards are brand and their response to a brand-ex-tensions can be very different. It is imperative to understand individual differences and then appeal to the extension to different market segments in order to have a successful brand extension. (Keller, 2012)
When one speaks of brand extensions, one also refers to line extensions. A line extension is when one extends a line to enrich the basic promise through diversity for instance providing new tastes, new flavours for a jam brand. It can also be a finer seg-mentation of a need for instance many variants of a shampoo brand according to the hair type, age of customer or kind of scalp problem. Line extension could also be providing complementary products. A brand might provide all the products involved in solving a specific customer problem. For instance, a brand fighting hair loss would not limit itself to its first product a shampoo but also provide gel or hair dye and so on. (Kapferer, 2012)
Kapfereer says that brand extensions are, absolutely necessary as they are a direct consequence of competition in mature markets and of the fragmentation of media. It leads to growth and profitability. (Kapferer, 2012)
Brand extensions are categorized into two; horizontal and vertical extensions. Horizontal extensions include line extensions and category extensions. Line extension uses the parent brand name within the same category and target a new market segment. The category extension is to extend into a new product category from the parent brand. (Keller, 2003)
Vertical extension is adjusting parent brand’s quality and price according to new market segment, and release with a different name in the same product family. (Keller & Aaker, 1992). Vertical extension can be additionally divided into two categories; Upscale and downscale vertical extensions (Xie, 2008). Up-scaling means to stretch the brand with higher quality products from the parent brand. Down-scaling is the offering of more affordable and lower priced alternatives for the parent brand products. Vertical extension strategies used in most industries. In an example case, German music instruments manufacturer Warwick, uses the brands; German Pro Series and Rockbass to label the more affordable instruments. Also differentiate their flagship, handmade models with the brand; Master Build. Offering products in three different price segments.
Figure 2. Brand extension types. Adapted from Building strong brands, by Aaker, D. A. (1996)., Simon & Schuster, The Free Press
The figure above classifies the brand extension types and their relative distance to parent brand which is adapted from (Aaker, 1996; Xie, 2008). Line extension is the shortest extension where slight changes to the parent brand applied. New products offered in the existing product category with identical price and quality level. Vertical ex-tension used when companies decide to offer more prestigious or affordable products then the parent brand. In vertical extensions, parent brand extended more compared to line extension as marketers offer new products with different levels of quality, price and under different brands. Even the categorization of the brand extension researched many times, some researchers categorizes line and vertical extension in the same group. (Dens & De Pelsmacker, 2010). Category extension is the furthest extension where companies release a totally new, unrelated product in a different category in a new market. (Keller, 2003) Porsche, German sports car manufacturer can be a good example for the category extension, as they offered high quality laptops under Porsche Design brand.
If we are to look at vertical upward brand extension, in particular, it refers to a brand entering a higher or lower price segment where it has competed till date. One can say that in upward extension, the aim is to access a segment with higher product margins adding costs to garner more value. Another important facet is to benefit from an alleged halo effect: where by when there is a buzz on the higher quality, higher cost brand then the lower prices lines automatically gets sold. (Kapferer, 2012)
Downward vertical brand extension allows the brand to become more accessible. Brands focussing on premium pricing as a measure of their brand equity, do not forego the profitability goals, they infact make use of their reputation in inexpensive categories of prices to sell larger volumes. (Kapferer, 2012)
What brand extensions rely on is the ability to create a competitive advantage by leveraging the reputation attached to the brand name in a growth category, which is different from the brand’s present categories. (Kapferer, 2012) Kapferer goes on to say in his book, the new strategic brand management, that there are five crucial assumptions which can be made for brand extensions:
1.The brand already has strong assets and is associated with a number of customer benefits whether it is tangible, or intangible and such a brand often de-mands high level of trust from consumers. (Kapferer, 2012)
2.These assets can have a rub off effect to the new and attractive category of the extension. Buyers in this case still believe and acknowledge that the new products of the extension have the benefits which are associated with the parent brand. (Kapferer, 2012)
3.Further these brand benefits and values are relevant to the new extension. It can be said that if the extension is done in an unforeseen manner, then the competition will be unable to react to it. (Kapferer, 2012)
4.To both consumers and trade, the products and services which have been ex-tended will deliver a perceived advantage over the competition. (Kapferer, 2012)
5.It will be possible due to this extension that the brand and the company be able to sustain competition in the long run. (Kapferer, 2012)
As different brand extensions strategies applied in different industries, success factors of brand extension have emerged as an important subject of researchers. This study aims to provide guidance to managers for the application of a successful brand extension strategy.
Benefits and Risks of Brand Extension
As a growth strategy, marketers use brand extension to extend the brand into more profitable markets with less risks. Tauber (1988) suggests that the business world is cost controlled and cost-based world. In that sense brand extension is cost-effective, helps reducing the launch of a new product by reducing the cost advertising, trade deals (Kapferer & Laurent, 1993).
The extensions also provide a less risky environment to a new product while entering to a new market (Lain, 2002). The reputation of the brand can attract customer easier as they share the loyalty and trust of the parent brand (Aaker and Keller, 1990). This also helps to reduce the potential fail of the new product (David Taylor, 2004)
On the other hand, the riskiest outcome is damaging the parent brand after a failed brand extension attempt. Some stretching can confuse consumers (Quelch and Kenny, 1994) and it may lower consumers’ trust in parent brand (Ian. 2010). Coca Cola’s infamous “new coke” failure case is an example where the extension of the brand can confuse and damage the sales of the company.
Affecting the new product’s position in the market is also another limitation. Ac-cording to (Carolin, 2007), new product should be positioned close to the parent brand that may reduce the risk.
The temptation to grow a business once a brand name has been established is with brand extensions. But then, way too many companies fail in their brand extension strategy. Turpin in his paper points out that there are three main challenges:
1. Is the company “Brand Building”; “Brand Borrowing” or “Brand Milking”?
2. Is the brand really, what customers think it is?
3. Is the brand genuinely perceived as an expert in its category?
Brand Building, Brand Borrowing, Brand Milking
“Brand milking” refers to stretching the brand to maximize cash and is considered short term, brand borrowing is an attempt to generate more cash which can considered mid-term and brand building refers to reinforcing the long term, brand equity. However, brand stretching can have disappointing results. In fact, new research on brand extension indicates that reasons for failure are not new and always point into the same direction: limited differentiation and value for consumers, too many “me-toos”; not enough brand building, too much brand borrowing and too much “brand milking”! (Turpin, 2005)
Is the brand what customers really think it is?
Many examples of poor brand extension suggest that it can also be very risky to redefine your business core competences or brand positioning “in a way that may sound logical to your management but is not obvious enough to consumers!” Customers decide the success of a brand. (Turpin, 2005)
Is the brand genuinely perceived as an expert in its category?
Many marketers argue that consumers are more likely to buy from trusted “expert brands” than from names that claim to be good in different product categories. (Turpin, 2005)
Marketing professionals, also academics studied the subject; value of brand. The concept of defining fiscal aspects of brand had many classifications. Feldwick, Lock-wood, Popper (1996), defined brand value as “the total value of a brand as a separable asset when it is sold or included on a balance sheet”.
Walfried Lassar, Banwari Mittal, Arun Sharma, (1995) suggest “value is the perceived brand utility relative to its costs”. Since the brand is considered as an intangible asset of a company, the measurement of brand value is cost based. Martins et al. (2010) suggests that the calculation of brand value can be done based on historical profits of the company. But the subjectivity of accounting raised questions while measuring the value of the brand.
In their paper, Avi Goldfarb, Qiang Lu and Sridhar Moorthy, have said that brands can be termed as the productive assets for a firm just as building and machinery are. They are fixed assets in the short term which can produce long term benefits. In order for a brand to be built which makes it productive, it has to develop brand equity which is time and money consuming. One can estimate a brand’s value, from what has been built as brand equity and the equity of the brand does not go down instantly, in fact, it continues to deliver benefits over a period of time even once the company stops investing in it. (Goldfarb, Lu, and Moorthy, 2009)
The researchers, Goldfarb, Lu, and Moorthy in 2009 tried to define brand value as, “the equilibrium profit earned by a brand in its branded state minus the equilibrium profit it would have earned if it were unbranded but considered and retained its search attributes.” The below figure demonstrates the same. (Goldfarb, Lu, and Moorthy, 2009)
Figure 3. Framework for measuring brand value. Adopted from Measuring brand value in an equilibrium framework, by Goldfarb, A., Lu, Q., & Moorthy, S. (2009). Marketing Science, 28(1), 69-86.
With the literature review, existing theories can be divided into two categories; brand equity being based on customer’s perceptions and, brand value being the financial equivalent of the brand. Accordingly, the concepts of brand value and brand equity are clearly different.
What can be said as mentioned by Goldfarb, Lu and Moorthy is that measuring brand value which is what a brand brings to a firm ultimately involves two aspects (1) what the brand does for the consumer and (2) the way brand equity affects a firm’s competitive position. (Goldfarb, Lu, and Moorthy, 2009)
Even though the brand equity concept has been researched since 1980 by academics such as Tabuer (1981), Farquhar (1989), Aaker (1991), Keller (1993), the definition of it is still ambiguous Knowles, (2008). Raggio, Leone (2007) suggest that there is no uniformly accepted theoretical framework for brand equity. Verma, H. V. (2012) suggest that in 90s four strategic challenges identified by researchers. These were;
i. How to measure brand equity?
ii. How to measure the effectiveness of marketing?
iii. How to execute a successful new product process?
iv. How to measure customer satisfaction?
Verma (2012) also suggests; even the issues appear to be different the only main prob-lem is brand equity. Because it is the parent concepts that covers all issues.
Brand Equity Definitions
Brand equity subject lacks theoretical unity as researches approached form different philosophies with different perspectives (Wood, 2000). Some definitions focus on financial aspects, while others on consumer view and finally some merging both factors. Some of these definitions are;
Aaker (1991) defined brand equity as; “a set of brand assets, 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.”
Keller, Lehmann (2006) defined the term with a similar approach; the value accrued from three levels of brand; customer market, product market, and financial market.
Knapp (2000) suggests; “Brand equity as is the totality of the brand’s perception, including the relative quality of products and services, financial performance, customer loyalty, satisfaction and overall esteem toward the brand. It is all about how consumers, customers, employees and all stakeholders feel about the brand.”
Farquhar (1989) suggests that; “brand equity can be measured by incremental cash flow from associating the brand with the product”. Also adds; “it is the added value to the firm, the trade, or the consumer with which a given brand endows a product.” He suggests that incremental cash flow results from premium pricing and reduced promotional expenses.
Upshaw (1995) terms brand equity in her book Building Brand Identity as “brand equity is accumulated value or worth of a brand; the tangible and intangible assets that the brand contributes to its corporate parent, both financially and in terms of selling leverage.”
Sikri (1992), brought attention to “brand name” subject by defining brand equity as; “the added value that is attributable to the brand name itself which is not captured by the brand’s performance on functional attributes.”
Brodsky (1991) “The sale and profit impact enjoyed as a result of prior year’s marketing efforts versus a comparable new brand.” Srivastava & Shocker (1991) “Brand equity subsumes brand strength and brand value. Brand strength is the set of associations and behaviour of consumers, distributors, and corporate owner of the brand allowing the brand to enjoy sustainable competitive advantages. Brand value is the net financial result of the ability of management to lever-age the strength of the brand through tactical and strategic actions in support of current and future profits to reduce risks.”
“Value of a well-known brand. It contributes to the acceptance of new products, shelf space allocation, perceived value, perceived quality, ability to charge premium price, and even the value of assets in the balance sheet.” Schiffman, Kanuk (1994)
“The measurable financial value in transactions that accrues to a product or ser-vice from successful programs and activities” Smith & Schulman (1991).
“Additional value that lies beyond its physical assets. This value comes from the position that the company has in the market, compared to that obtained in the absence of the brand. ” Dimitriadis (1994)
“Increase in the perceived usefulness and level of attractiveness that a brand gives to a product.” Lassar, Mittal and Sharma (1995)
Definitions cover some similar aspects of the brand but they can be groups as the customer perspective, the financial perspective or a mix of those. Farquhar (1989) and Aaker’s (1991) definitions is a mix, while Keller terms the definition with customer-based perspective. On the other side Smith & Schulman (1991) came with a financial based brand equity definition. There are also different ideas about the brand equity perspectives. Kapferer (2004) suggest that there are only two views of brand equity, one is focusing the special relationship between consumer and brand itself, while other one is trying monetarizing the value of the brand.
Keller and Lehmann (2006) mentioned three main perspectives in their study but with a slight difference. Customer-based, company-based and finance-based. They suggested that finance-based brand equity is an asset that can be bought and sold. Customer based brand equity focuses on the relationship between the consumers and brands. Company based brand equity is the additional value added to the company by the help of brand’s value itself.
Analysing all the definitions and perspectives gives us opportunity to see the overlaps in definitions and different ideas even on the main aspects of the brand. To better understand and format the aspects the table below has been prepared.
Perspectives and Aspects of Brand Equity
Feldwick, P., & Davies, G. (1996). Brand value: the total value of a brand as a separable asset ± when it is sold, or included on a balance sheet;
Brand Loyalty: a measure of the strength of consumers’ attachment to a brand;
Brand Image: a description of the associations and beliefs the consumer has about the brand
Keller, K. L., & Lehmann, D. R. (2006) Brand Identity: Category Identification
Brand Meaning (Imagery, user profiles, performance, primary characteristics)
Brand Response (Judgments, Feelings)
Resonance: Loyalty, attachment to the brand
Aaker, D. A. (2009). Brand Loyalty
Brand associations in addition to perceived quality
Other proprietary brand assets; patents, trademarks, channel relationships.
Lassar, W., Mittal, B., & Sharma, A. (1995). Performance: a consumer’s judgment about a brand’s fault-free construction
Social image: the consumer’s perception of the esteem in which the consumer’s social group holds the brand.
Feeling: the relative strength of a consumer’s positive feelings toward the brand
Value: the perceived brand utility relative to its costs
Trustworthiness: the confidence a consumer places in the firm and the firm’s communications
Shankar, V., Azar, P., & Fuller, M. (2008). Advertising: effects Brand equity
Two Multiplicative Components
Offering Value: net present value of an offering carrying a brand name
Relative brand importance: brand image and other marketing-mix elements
Srinivasan, V., Park, C. S., & Chang, D. R. (2005). Brand Awareness
Attribute perception biases
Sources used; Feldwick, P., & Davies, G. (1996). Do we really need Brand Equity?S.l.: S.n., Keller, K. L., & Lehmann, D. R. (2006). Brands and branding: Research findings and future priorities. Marketing science, 25(6), 740-759., Aaker, D. A. (2009). Managing brand equity. simon and schuster., Lassar, W., Mittal, B., & Sharma, A. (1995). Measuring customer-based brand equity. Journal of consumer marketing, 12(4), 11-19., Shankar, V., Azar, P., & Fuller, M. (2008). Practice Prize Paper—BRAN* EQT: A Multicategory Brand Equity Model and Its Application at Allstate. Marketing Science, 27(4), 567-584.,
Measurement of brand equity and brand equity aspects
Review of the literature shows that there many models to measure the brand equity. Even the methods are useful, there has been some weak points. While the early methods good at comparing brands, they fall short at transferring those preference meth-ods to financial measures. Randall, T., Ulrich, K., & Reibstein, D. (1998)
Aaker (1991) with his model uses consumer ratings for a branded product and compares it with unbranded products to measure brand equity.
Simon, C. J., & Sullivan, M. W. (1993) extract the brand equity from the com-pany’s market value, in the end capturing elements like; price premium associated, ex-pected future profits of the brand and ability to estimate reduced marketing cost for future products.
Cathy J. Cobb-Walgren, Cynthia A. Ruble, & Donthu, N. (1995) in Journal of Advertising mentioned that brand equity usually divided into 2 groups; one involving consumer perceptions like awareness, associations, perceived quality and one involving consumer behaviour; for example, brand loyalty, willingness to pay a high price. Hsieh, M. (2004) with his article in Journal of International Marketing, points that there are two distinct approaches measuring customer based-brand equity: direct and indirect approaches. Researchers like Farquhar (1989), Aaker (1991), Kamakura and Russell (1993) use the direct approach, defining the brand equity as the value added to the brand. Hsieh, M. (2004) suggest that “researchers who take the indirect approach define brand equity as the differential effect of brand knowledge on consumer response to the marketing of the brand.” Verma, H. V. (2012) suggests that the brand itself is the core of the brand equity. The link between brand and brand equity is the consumer’s perspective. Consumer’s attitude and image of the brand drives beneficial outcomes. Keller (1993) developed and published his “Customer Based Equity Model” on this customer perspective of the brand.
Keller’s Customer-Based Brand Equity
As mentioned before Keller’s brand equity model is customer focused. Instead of financial focus of the subject, also other researchers Yoo and Donthu, 2001; Pappu et al., 2005 measured the brand equity from a customer perspective, and Kamakura And Russel, 1993 from a customer behaviour point. Keller’s first conceptualization of customer-based brand equity based on brand knowledge dimension of the equity which covers brand awareness and brand associations.
Keller, K. L. (1993) defines customer-based brand equity model as “the differential effect of brand knowledge on consumer response to the marketing of the brand.” Keller also suggests that customer-based brand equity model only occurs when the customers have a strong relation with the brand and attached some associations to brand in their memory. Keller (1993), conceptualized brand equity and mentioned three key elements for brand equity. The advantage of conceptualization is important as Keller suggest that “it enables managers to consider specifically how their marketing program improves the value of their brands”. These three key elements are;
I. Differential effect: It is comparison of consumer response to the marketing of a brand with the response to the same marketing of a unbranded version of the product
II. Brand knowledge: It is the brand awareness and brand image and is conceptualized according to the characteristics and relationships of brand associations.
III. Consumer response to marketing: It is consumer’s perception, preference, and behaviour arising from marketing mix activity.
Keller also conceptualized brand knowledge by applying some memory notions. He conceptualized the model as “associative memory network”. He divided brand knowledge into 2 categories; brand awareness and brand image. He suggested the brand knowledge is the key concept of customer-based brand equity. As brand name or image can trigger some attached associations in customer’s mind. He also discussed that “a brand tends to form a network of nodes in memory to which a variety of associa-tions are linked.” There are different notes with different associations and the concept is they are all linked together where the links also have variable strengths. Those variable link strengths also affect the speed of activation of the nodes. Therefor, the concept is important as the activation speed is directly connected with brand recalling and recogni-tion. (Keller, 1993), (Verma, 2012)
Brand Awareness: is “the consumer’s ability to identity the brand in different conditions.” (Rossiter, John R. and Larry Percy, 1987)
According to Aaker brand awareness is “the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category” (Aaker, 1991)
Keller suggested that brand awareness is the possibility that brand name’s recognition with ease. So, it consists two levels; brand recognition and brand recall. Brand recognition is to have a prior knowledge or idea, or having heard about the brand which causes a exposure in consumer’s mind. Brand recall is defined the consumer’s ability to retrieve, recall this information about the brand from memory when given the product category. (Keller, 1993)
According to Keller, brand awareness has 3 key roles in consumer decision making process. As also suggested by (Baker et al.1986; Nedungadi 1990), he thinks that increasing brand awareness makes the brand a considerable one in consumer’s mind when thinking about the product family. Second one is, in this consideration process brand awareness may have an affect on decisions. Even without any other brand associations. Finally, he advises that the brand awareness by “influencing the formation and strength of brand associations in the brand image.” The establishment of the brand node is important as the brand associations will be linked to that node. Brand image is important as it is linked to main nodes in this network and the strength and formation of this link between nodes affects consumer’s decisions.
Brand Image: Brand Image is considered as one of the most crucial points for firm’s marketing strategy. (Aaker and Keller 1990; Keller 1993). Keller defines brand image as “perceptions about a brand as reflected by the brand associations held in consumer memory.” Both Aaker, Keller considered the brand image as an important component of Brand Equity. And it has been the part of brand equity frameworks for researchers like Feldwick 1996, Park and Srinavasan 1994.
As a part of “associative memory concept”, Keller notes that brand associations are the informational nodes that linked to the brand node in consumer’s mind. These nodes form the meaning for consumer about the brand. Those associations become the key during the differential response. Keller identified those associations in three groups as; attributes, attitudes and beliefs. Favourability, uniqueness and strength of these associations determines the Brand Strength. (Keller, 1993)
o Attribute Associations: Attributes are descriptive features, used to characterize a product/service. Keller divides the attributes into 2 groups, product related or service related.
o Product related attributes are the ingredients/components that is needed to form the product or service.
o Non-product related attributes are the purchase related external aspects of the brand. The four type of non-product related attributes are;
? Price information: It is important as customer may form their cate-gory knowledge of the product depending on the different price groups.
? Packaging or product appearance information: It is also related to purchase process not as a component for the product to function/perform
? User imagery: Created by customer’s personal experience. Associations may be based on demographic factors like sex, age, in-come.
? Usage imagery: Also formed by customer’s personal experience. Keller mentions that with user imagery, they can produce brand personality attributes. Usage situation may be based on type of activity, time of the day, location.
o Benefit Associations: Benefits are the customer’s personal opinion and added value to a product/service based on experience or suggestions. In Keller’s customer-based brand equity model, he divided benefits associations into three groups according to motivations;
o Functional benefits: The main outcomes or advantages of using a product or service. These are the basic advantages connected to safety and physiological needs. (Maslow 1970) Or some problem avoidance needs.
o Experiential benefits: Based on feelings after experiencing the product. Those feeling can be sensory pleasure and variety.
o Symbolic benefits: Related to social approval, personal identification, expression needs like prestige, fashion, exclusivity.
o Attitude Associations: Wilkie defined as “overall evaluations of brand”. (Wilkie 1986). They are key to customer behaviour like determining purchasing decisions and brand choice. Multi-attribute formulation approach is widely accepted. In this model brand attitudes are the function of the associated attributes. (Keller, 1993) There are three components in attitude associations; (Verma, 2012)
o Cognitive component: Knowledge perception derived from direct experiences or other sources.
o Conative component: Behavioural or action related.
o Affective component: Emotions or feelings related.
In some low involvement decisions brand awareness alone is enough to consumer response. But in most cases, other associations of brand are crucial and key to determine consumer’s response. (Keller, 2008)
Keller’s Brand Equity Pyramid
In 2003, Keller defined brand equity as consumer’s response to marketing activities. The key for marketers is to create value for the brand and have successful brand equity by capturing this consumer response and creating loyal relationships with the brand and consumer. To do that Keller suggested a 4-step brand building method and conceptualized his brand equity pyramid on those steps.
Those four steps answer a set of fundamental questions that every consumer ask. They all linked to corresponding brand steps. So, in the end brand resonance model is a sequence of steps can be created. For successfully achievement each previous step should be completed with success. (Keller, 2008) Four steps are:
1st stage: Identification of the brand. Use brand salience as a measure. Ensuring consumer recognizes the brand and recalls it by linking different nodes from the memory like logo, symbol, product class and benefits.
2nd stage: Establish brand meaning by linking tangible and intangible brand associations. The stage is important to create brand image and characteristics. Those brand associations can be grouped as image or function related associations.
3rd stage: Reveal the customer response. Keller categorizes those responses as consumer judgements and consumer feelings.
4th stage: Convert those personal identification of the customer has with brand to a active, intense loyal relationship. This resonance, brand relationship is grouped in four; loyalty, attachment, community and engagement.
As mentioned before those four stages of brand building, answers fundamental question raised in consumers’ mind:
1. Brand identity addresses “Who are you?”
2. Brand meaning addresses “What are you?”
3. Brand responses addresses: “What about you? What do I think or feel about you?”
4. Brand relationship addresses: “What about you and me? What kind of association and how much of a connection I like to have with you?”
Figure 4 below visualizes those steps and positions the six brand building block in order. There are also two routes; the one on the left is rational route to brand building and the one on the right is emotional route, representing customer side. Going from both sides of the pyramid and reaching the top is the key to achieving the strongest brand. (Adapted from Keller, 2008)
Figure 4. Keller’s brand equity pyramid. Adapted from Keller, K. L. (2008). Strategic brand management: Building, measuring, and managing brand equity. Harlow: Pearson Prentice Hall.
1. Brand Salience
The first level where brand has been recalled as symbols, logos or other associations by consumer. “Achieving the right brand identity means creating salience with customer.” (Keller, 2008). The measures are how often and how easy can a customer recognizes and recall a brand. It is the level where provides basic functions to customer. (Keller, 2008)
2. Brand Performance
As the product is the key component of brand equity its performance and imagery form the brand meaning. The performance association can be derived from a personal experience or heard about a brand from others. It means how well customer satisfactions are met. These are the function related associations. (Keller, 2008)
3. Brande Imagery
Brand imagery is part of brand meaning which fulfils the social psychological needs of the customer. Instead of the functions of the product, it is the abstracted view of the product for customer. It can be linked to intangibles like user profiles, personality and values, heritage and expenses. (Keller, 2008)
4. Brande Judgements
Third level of the brand equity pyramid refers to Brand Response. Where brands response to customer response. Keller divides the group to judgement and feeling. Judgements are the customer personal opinions where they combine all the brand im-agery and brand performance components together. (Keller, 2008) The types of judgements that cru-cial with respect to a brand are:
o Brand Quality
o Brand Credibility
o Brand Consideration
o Brand Superiority
5. Brand Feelings
Those are the emotional responses to a brand/product. It relates to feelings arouse by the result of marketing activities for the brand or customer’s feelings for the brand or the product. (Keller, 2008) Those feelings can be:
o Social approval
Brand resonance is the main goal for the marketers to achieve. It is the ultimate level of relationship between consumer and the brand. The depth of psychological bond and the strength of the relationship can determine the advantages provided by resonance. Keller (2008) divides the brand resonance as;
• Behavioural Loyalty
• Attitudinal Attachment
• Sense of Community
• Active Engagement
Aaker’s Brand Equity Model
David A Aaker, a marketing professor at the University of California-Berkeley and a management consultant at Prophet, devised a marketing model, The Aaker Model. The Aaker model views brand equity as a congregation of brand associations, awareness and brand loyalty which when combined together adds value to the product or service. (Muilwijk, 2014)
Brand equity as defined by Aaker is, “a set of brand assets and liabilities linked to a brand, its name and symbol add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers.” It can be noted that as per this defi-nition, that brand equity takes the form of asset or liability. An asset as one is aware is one that increases the value whereas liability reduces the value.
According to Aaker, there are five interdependent factors that define brand equity. (Aaker, 1997) They are:
? Brand loyalty
? Name awareness
? Perceived quality
? Brand association in addition to perceived quality
? Other proprietary assets linked to brand- patents, trademarks, etc.
If we are to look into how Aaker’s brand equity model works, we can say that the five factors form the resources of brand equity. The combined sum of the resources is what is brand equity. The result from brand equity is the perceived quality and brand equity is always perceived by a client as to how they experience it. (Muilwijk, 2014)
Brand equity assets have the capability of adding or subtracting value both for the customer and the firm. Customers get value by getting interpreted information, pro-cessing and storage. Perceived quality and associations which are the assets of brand equity can help in buying decision and, also provide user satisfaction. Brand equity assets provide value to a firm enabling it to charge premium, have brand extensions, channel support and corporation as well as brand loyalty benefits. (Verma, 2012)
Aaker in his book, Managing Brand Equity, summarized the concept of brand equity as detailed in figure (XX. The five categories he considered assets are shown as the basis of brand equity. It can also be seen from this figure that brand equity creates value for both the firm and the customer.
Providing value to the firm: Brand equity has the potential to add value to the firm, by generating marginal cash flows. It can have promotions for instance to which can woo old or new customers.
Providing value to the customer: Brand equity assets can add or subtract value for customers. (Aaker, 1997)
Taking a closer look at the factors that are considered in Aaker’s brand equity model.
Figure 5. Aaker’s brand equity model. Adapted from Aaker, D. A. (1997). Managing brand equity: Capitalizing on the value of a brand name. New York, NY: Free Press
Brand Loyalty: This refers to the extent to which people are loyal to a brand. It suggests that when customers pay very little attention to a brand, that brands then lack a hold on the customers. Brand loyalty can be considered as one the most important bases of equity creation. When customers show commitment to a brand, it creates equity. It has been one of the key concerns of marketers. It provides a sort of insulation against competition. But it also allows the opportunity to demand a premium. (Verma, 2012)
Brand loyalty can be defined as, “the biased behavioural response, expressed over time by some decision-making unit, with respect to one or more alternative brands out of a set of such brands, and is a function of psychological processes.” (Sheth et al, 1999)
It is expensive for any business to gain new customers and relatively inexpensive, to keep existing one especially if they are fond of the brand. It allows for low switching costs and also, gives a sense of confidence to new customers. If a customer is loyal to a brand, it reduces the vulnerability to competition. Loyalty can mean greater trade leverage, since customers expect the product to be always available. (Aaker, 1997)
Verma says that there are five levels of brand loyalty that can be identified, from committed buyer to an indifferent buyer. The other three are in between states. At the lowest level, the indifferent buyer has no attachment to the brand. The buying is done basis the price or availability than towards the loyalty to brand. In this case the buyers do have any brand affinity let alone loyalty. The second category of buyers consists of the ones who are satisfied with the brand. They do not have any reason to switch but they will easily switch if the competition offers a better benefit. These buyers are also known as habitual buyers. The third category of buyers are the ones who switch only competition is able to, cover the switching costs for them, because switching costs for them involve time, money and risk. They are known as, ‘switching-cost loyal’ customers. The fourth category of loyalty are buyers who like the brand. They have a tendency to have an emotional attachment to the brand. This could have been developed over time due to long period of usage, or user experience or perceived high quality. They consider the brand they use as a friend. The next level of customer loyalty customers can be considered as deeply committed to the brand. (Verma, 2012) The commitment is an “enduring desire to continue the relationship and to work to ensure its continuance”. (Sheth et al 1999)
Name Awareness: Often known as brand awareness it is the second brand equity asset. As a practice, people tend to buy brands that they are familiar with. It can be assumed that a brand that is familiar is reliable, to stay in business and of reasonable quality. A known brand is often preferred over an unknown brand. In order to be even considered, a brand must be recognised. An unknown brand in this case has no chance of being selected. (Aaker, 1997)
Brand awareness means recognition and recall. For a brand to be part of the decision-making process it is important for a brand to be remembered when the product category is thought of. Brand awareness is recognition, recall and top-of-the mind recall. In this case, brand recognition is at the bottom of the pyramid of the brand awareness. It is especially important especially when considering low involvement buying situations, for instance in store purchase. A higher level of awareness is a person’s ability to recall a brand without any cue. Even higher is top-of-mind recall where in the brand comes first to mind. When it comes to top-of-mind it generally indicates the superior position a brand has over others. Brand awareness creates value in many ways. Frist up, brand recognition must be created which leads to associations. Recognition implies familiarity, which means low involvement in purchase decision and thirdly, awareness also confirms the commitment. (Verma, 2012)
Perceived quality: This often directly influences purchase decisions and loyalty and comes into effect when a buyer is unsure to make a detailed analysis of his or her purchase decision. It can be considered also for brand extension. It is always measurable for brand characteristics. (Aaker, 1997)
The quality of a brand can be objective or perceived. Objective view is the actual quality of the brand in terms of superiority whether it is a product or service, whereas, perceived quality is the perception of superiority of the brand. There are several ways that perceived quality leads to creating value. Firstly, it allows the customer to make a choice of buying a specific brand. Only those brands which are perceived to have a high quality are considered while making a purchase by a customer. Secondly, it gives the brand the opportunity to be differentiated or positioned differently basis the perceived quality it holds in the eyes of the customer. It can be said that brands that have a higher perceived quality can charge a premium. Finally, it can help brands into launching ex-tensions. (Verma, 2012)
Brand Associations: When it comes to brand names, the underlying value of a brand of a brand is basis the associations it has. For instance, a lifestyle or personality association with a brand. It is said to change the use of brand itself. (Aaker, 1997)
Verma says that whatever associations have could be connected to feelings, character, symbols, lifestyle, user, etc. From a brand equity stand point, brand associations create great value for the brand. Brands are bought in this case for what is associated with them. Customers exhibit loyalty basis these associations they have. It helps also recall information, which becomes important during the decision-making process. Brand associations also helps with differentiation. The associations that are formed by differentiation give attributes and benefits to the consumer to buy the particular brand. (Verma, 2012)
A brand is considered an asset according to Aaker. It is the source of creating value. The equity of a brand can be determined by the assets and liabilities that a brand is associated with. These are brand associations, perceived quality, loyalty, awareness and other proprietary assets. (Verma, 2012)
Working Brand Equity Model
From the comparisons, in-depth literature research and understanding the key aspects of the brand equity, a combined/working brand equity model can be derived. The combined model is based on the customer-based equity models of Keller and Aaker. Representing four steps for measuring brand equity by blending key dimensions from each researchers’ models. The model will be the base for the research and all the statements based on those blended aspects of brand equity and its sub-dimensions.
Comparing the models
Table 2 below gives a summary of the different perspectives of researchers.
Perspectives and Comparison of Brand Equity Models
Aaker Keller (1991) Keller (2008)
Model and Terms Brand Equity as
Assets and liabilities Customer-based brand Equity Brand Equity Pyramid
Drivers of Brand Equity -Brand Loyalty
-Brand Associations Brand Knowledge
“A set of assets and liabilities linked to a brand, its name and symbol, that adds to or subtracts from the value provided by a product or service to a firm and/or to that firm’s customers. “The differential effect of brand knowledge on consumer response
to the marketing of the brand.” “The added value a product accrues as a result of past investments in the
marketing activity for the brand.”
As seen from the figure above, both researchers have customer-based approach for a strong brand equity model. The main idea is a brand does create the value by customers not by itself. As mentioned before these models require a customer involvement and with the right interpretation of this involvement; strong, loyal relationships can be created between the brand and the customer. This will transform the product to much more valued one, providing the marketers numerous advantages.
Aspects of the Brand Equity (Working Model)
There are four blended/combined aspects for brand equity each has three measures based on the researchers’ perspectives on the success factors of brand equity.
Brand Identity / Awareness
The aspect is based on Keller’s brand knowledge components and Aaker’s Name awareness aspect of brand equity. It is the recognizing and the recalling the brand. The first level of involvement and the base step to a customer-brand relationship which is the key to acquire correct brand identity. As Keller noted; besides recognizing and recalling, consumer also needs to link this identification to nodes of memory and think about the brand.
Consumer consideration: When the customers looks for a particular brand in the time of need or purchasing
Association anchors: Customer’s attached different associations to the brand from a personal experience with the product/brand or others’ suggestions. This also influence the brand identity / awareness.
Iii.Substantiality: Customers own experience or ideas about brand image, brings influential commitment towards the brand
Brand Meaning / Perceived Quality
Brand meaning how a brand characterizes and stands in the customers’ mind. It is customers’ thoughts or feelings about the brand. By providing a perceived quality this image of the brand is created as it is heavily dependent on the image and the performance of the product. It affects customer opinions and the perception of the brand as it is the personal experience or other source of information based on how well the product serves the customer or performs. Imagery is the psychological or social needs associated to the product by customer himself or by indirectly by advertisement or word of mouth. Availability of the product, performance, price, purchase situations, values can be listed as those associations.
Extended brands: Having products in more category may give the customers a sense of reliability and quality.
Price: Purchase situations and added value can form some quality indicators for the product, so customers can tend to spend more. It may create the image a higher priced product is a better quality, premium one.
Wider availability: With the help of advertisement and word of mouth consumers think the widely available, well distributed products are reliable.
Brand Response / Association
Brand meaning helps to produce brand response. Brand response is the step where the information/ memory about the brand is retrieval. It can turn into judgements, attitudes and purchasing decisions. Keller groups the brand response / associations as brand judgements and brand feelings which he names from the “head” or the “heart”. (Keller, 2008).
Drive purchasing: The main judgements and associations of the customer about the brand, which lead to purchasing decisions.
Attitude: Customer’s positive experiences with the product/service creates a positive approach to the brand or different products from the brand
Retrieval of the information: recalling and processing different memory nodes linked strongly together about the brand in consumer’s mind, where it leads to similar ideas about the new products of the brand.
Brand Loyalty / Resonance
The last step focuses on building an intense, active and loyal relationship with the brand and the customer. It relies on a deep, psychological link that customer has with the brand. The level of loyalty rises as the consumer bonds with the brand and seeks information about the brand, events and participates in the fan community. This leads to reduced marketing cost, time to response to competitors, influence new customer by loyal ones.
Purchase advantage: Loyal customers tend to buy the new products with-out marketing influence. They generate constant revenue for the company with less effort from marketers.
Influencing new customers: Existing loyal customers influence new customers with their own experience and loyalty towards the brand and affect their purchase decisions.
Additional response time to competitors’ threats: Loyal customers tends to stay in the environment and offers of the brand they bound to, considers the switching to other brand as last option. Giving advantage to the firm’s that they are loyal to, to come up with an offer of themselves.
With this model, aspect and the measures may help to identify strong and weak links during the process of branding or brand extension. Each of the survey questions in empirical research was based on the measures of those aspects. The author aimed to measure each score of the statement and its’ link strength to the main branding/brand extension score for the model.
Empirical Research Methodology
In this study, survey respondents who live in Germany and Turkey, agreed to participate the survey over the internet. The purpose of the survey is to analyse “The relationship between Brand Equity Aspects and Brand Extension Process” and per-formed exploratory and cross-sectional.
Purpose and Research Method
The main purpose of the research is to analyse the relationship between Brand Equity Aspects and Brand Extension Process. With this being the aim of the study, it was also analysed whether there is a difference or relationship between the socio-demographic factors and Brand Equity Aspects & Brand Extension. This study is and exploratory and cross-sectional.
Data Collection Tools
Literature review conducted on the subject and the aspects of Brand Equity was reduced to 4 categories with combining Keller’s Brand Equity Model and Aaker Brand Equity model; Brand Identity / Awareness, Brand Meaning / Perceived Quality, Brand Response / Brand Association, Brand Loyalty / Resonance. Each of the three statements related to brand equity aspects created by the researcher with the reference of literature review. The answers to those statements / judgements created by researcher using 5-point Likert-type scale; strongly disagree, somewhat disagree, neither disagree nor agree, somewhat agree, strongly agree. With those approach 12 questions of the survey focusing on Brand Extension were created by the author.
The research questionnaire consists of 18 questions, 6 of which are socio-demo-graphic and 12 of which are brand equity aspects that relates to brand extension process. In this research, the reliability coefficient of the “The relationship between Brand Equity Aspects and Brand Extension Process” survey was measured as 0,724. The survey’s sub-categories/aspects’ reliability coefficient were; 0,5195 for Brand Identity / Aware-ness, 0,5308 for Brand Meaning / Perceived Quality, 0,5278 for Brand Response Brand Association, and 0,6175 for Brand Loyalty / Resonance. Even though the sub-categories values are enough compared to the whole survey, the reason for low values are that the small number of questions for each sub-category.
“The relationship between Brand Equity Aspects and Brand Extension Process” survey contains 12 Likert-type questions in 4 categories. There are 3 Likert-type questions for each category. The numerical value of each answer is 1 – strongly disagree, 2 – somewhat disagree, 3 – neither disagree nor agree, 4 – somewhat agree, 5 – strongly agree. The score of each category is calculated by taking the arithmetic average over numeric values. Likewise, the numerical values of the answers given to the 12 questions in total were calculated by the arithmetic mean to calculate the Brand Extension score.
Place, Time and Data Collection Method
This study was done by the researcher by inviting respondents from his social network who live in Germany and Turkey. Survey was held between 17 July – 7 August 2018, and participants had access to the online survey via Survey Monkey online services.
The Universe of Research and Sampling
The research population are adults (+18) who lives in Germany and Turkey. The research sample consisted of people who were in the social network of the researcher and randomly invited to the survey and agreed to participate. There were 95 participants from Germany and 148 participants from Turkey, making the total number of respondents 243.
Ethical Aspect of the Research
Written information was given to participants about the purpose of the study, the beneficial of the results for scientific purposes with the estimated time will be spend for the survey. They were free to decide whether to participate or not in the research, re-specting their right to refuse to give information at any point of their participation.
The privacy principle was adhered to by assuring the information given will be anonymous and will never be shared with third party services. Only be used by the re-searcher for scientific purposes. Since the participation in the survey relies on volunteer-ism, no permission has been obtained from any institution (public or private).
Statistical Analysis and Interpretation of Data
The categorial variables obtained in the study are frequency and percentage; and the measured variables are summarized as mean, standard deviation, maximum value and minimum value.
T-test and one-way analysis of variance (ANOVA) tests were performed in inde-pendent groups to test the differences between variables. The Pearson Correlation test was used to test the relationship between variables. Statistical analysis results were; p=0.05 significance level.
All hypotheses were done for each aspect of Brand Equity and its relation to brand extension. Sub-hypotheses were set on socio-demographic and their relation brand extension as follows;
-H10: There is no significant statistical relationship between Brand Identity / Awareness and Brand Extension.
-H11: There is a significant statistical relationship between Brand Identity / Awareness and Brand Extension.
-H20: There is no significant statistical relationship between Brand Meaning / Perceived Quality and Brand Extension.
-H21: There is a significant statistical relationship between Brand Meaning / Perceived Quality and Brand Extension.
-H30: There is no significant statistical relationship between Brand Response / Brand Association and Brand Extension.
-H31: There is a significant statistical relationship between Brand Response / Brand Association and Brand Extension.
-H40: There is no significant statistical relationship between Brand Loyalty / Resonance and Brand Extension.
-H41: There is a significant statistical relationship between Brand Loyalty / Resonance and Brand Extension.
-H50: There is no significant statistical difference between brand equity aspect scores and brand extension scores according to gender.
-H51: There is a significant statistical difference between brand equity aspect scores and brand extension scores according to gender.
-H60: There is no significant statistical difference between brand equity aspect scores and brand extension scores according to marital status.
-H61: There is a significant statistical difference between brand factor scores and brand extension scores according to marital status.
-H70: There is no significant statistical difference between brand equity aspect scores and brand extension scores according to the country they live in.
-H71: There is a significant statistical difference between brand equity aspect scores and brand extension scores according to the country they live in.
-H80: There is no significant statistical difference between brand equity aspect scores and Brand Extension scores according to educational status.
-H81: There is a significant statistical difference between brand equity aspect scores and Brand Extension scores according to educational status.
-H90: There is no significant statistical relationship between brand equity aspect scores and Brand Extension scores according to age.
-H91: There is a significant statistical relationship between brand equity aspect scores and brand extension scores according to age.
-H100: There is no significant statistical relationship between brand equity aspect scores and Brand Extension scores according to monthly income.
-H101: There is a significant statistical relationship between brand equity aspect scores and Brand Extension scores according to monthly income.
Limitations of the Study
This research was carried out within the scope of master’s degree graduate with the time limitations and financial possibilities of the researcher.
The research population were adults who live in Germany and Turkey, which were selected randomly and agreed to participate in the survey. Total number of participants were 243, being 95 from Germany and 148 participants from Turkey. There is no generalization of the results of the research with the reason that the sampling method and the sample size were small. Nevertheless, although the results of the study aren’t not universal to the public, they are valuable in terms of providing conclusions about the topic on the ground.
In this section empirical findings of the research have been summarized, statistical analyses were made.
Some socio-demographic characteristics of the research group I: (n=243)
Gender Woman 124 51,0
Man 119 49,0
Marital status Married 92 37,9
Single 151 62,1
Educational status Highschool 33 13,6
Associate Degree 6 2,5
Bachelor’s Degree 98 40,3
Master’s Degree 86 35,4
PhD Degree 20 8,2
Country Germany 95 39,1
Turkey 148 60,9
51% of the study group is composed of females and 49% is males. 37.9% of participants were married while 62.1% were single. 13.6% of the participants in the re-search group are graduated from high school, 2.5% from associate degree, 40.3% from bachelor’s degree, 35.4% from master’s degree and 8.2% from doctorate degree. 39.1% of respondents live in Germany while 60.9% of the people are living in Turkey.
Some socio-demographic characteristics of the research group II: (n=243)
Mean Standard deviation Minimum value Maximum value
Age 31,21 7,14 20,00 58,00
Monthly income 1.155,96 1.094,61 0,00 6.000,00
The average age of the participants was 31,21 ± 7,14. The youngest person in the survey is 20 years old while the oldest person is 58 years old.
The average monthly income of the individuals participating in the survey was 1.155 ± 1.094 euros. The participant with the highest income earns 6,000 euros per month, while the lowest was no monthly income for one participant.
Distribution of the research group’s thoughts about “Brand Identity / Awareness” (n = 243)
Strongly disagree (%) Somewhat disagree (%) Neither agree nor disagree (%) Somewhat agree (%) Strongly agree (%) Mean ± Standard dev.
Brand logos reflect the same values for the new products that I am considering buying. 3,3 11,5 27,2 45,3 12,8 3,53±0,97
When buying a new product, I only consider brand I am aware of 11,1 17,7 13,6 46,9 10,7 3,28±1,20
I only consider buying products of a particular brand even though the product is not core category of the parent brand 17,7 22,6 20,2 32,9 6,6 2,88±1,23
Participants replied to the statement: “Brand logos reflect the same values for the new products that I am considering buying.” 3,3% strongly disagree, 11% somewhat disagree, %27,2 neither agree nor disagree, 45,3% somewhat agree and 12,8% strongly agree. (Mean ± Standard dev.: 3,53±0,97)
Research group participants responded to the statement: “When buying a new product, I only consider brand I am aware of” 11,1% strongly disagree, 17,7% somewhat disagree, 13,6% neither agree nor disagree, 46,9% somewhat agree and 10,7% strongly agree. (Mean ± Standard dev.: 3,28±1,20)
Research group participants responded to the statement: “I only consider buying products of a particular brand even though the product is not core category of the parent brand” 17,7% strongly disagree, 22,6% somewhat disagree, 20,2% neither agree nor disagree, 32,9% somewhat agree and 6,6% strongly agree. (Mean ± Standard dev.: 2,88±1,23)
Distribution of the research group’s thoughts on “Brand Meaning / Perceived Quality” (n = 243)
Strongly disagree (%) Somewhat disagree (%) Neither agree nor disagree (%) Somewhat agree (%) Strongly agree (%) Mean ± Standard dev.
If a brand is available in many categories of products, I consider it is of better quality.27,6 25,1 18,5 25,1 3,7 2,52 ±1,24
Price is not considered a problem of a new product from the parent brand if I have great affinity towards the brand 26,3 25,1 13,2 29,2 6,2 2,64 ±1,31
If I see many products from the same parent brand available in more places, I consider it to be better than other brands. 21,0 27,6 14,4 32,1 4,9 2,72 ±1,25
Research group answered to the statement: “If a brand is available in many categories of products, I consider it is of better quality.” 27,6% strongly disagree, 25,1% somewhat agree, 18,5% neither agree nor disagree, 25,1% somewhat agree and 3,7% strongly agree. (Mean ± Standard dev.: 2,52±1,24)
Participants answered to the statement: “Price is not considered a problem of a new product from the parent brand if I have great affinity towards the brand” 26,3% strongly disagree, 25,1% somewhat agree, 13,2% neither agree nor disagree, 29,2% somewhat agree and 6,2% strongly agree. (Mean ± Standard dev.: 2,64±1,31)
Research group replied to the statement: “If I see many products from the same parent brand available in more places, I consider it to be better than other brands.” 21,0% strongly disagree, 27,6% somewhat agree, 14,4% neither agree nor disagree, 32,1% somewhat agree and 4,9% strongly agree. (Mean ± Standard dev.: 2,72±1,25)
Distribution of the research group’s thoughts on “Brand Response / Brand Association” (n = 243)
Strongly disagree (%) Somewhat disagree (%) Neither agree nor disagree (%) Somewhat agree (%) Strongly agree (%) Mean ± Standard dev.
I would buy all products from a brand I love 36,6 19,3 14,0 24,3 5,8 2,43±1,35
If I have a positive experience with a brand, I trust all products from the parent brand to be good. 7,0 11,5 11,9 58,8 10,7 3,55±1,06
My memories with a brand affect me to buy new products from the brand 3,7 4,1 7,0 52,3 32,9 4,07±0,95
Research group answered to the statement: “I would buy all products from a brand I love” 36,6% strongly disagree, 19,3% somewhat agree, 14,0% neither agree nor disagree, 24,3% somewhat agree and 5,8% strongly agree. (Mean ± Standard dev.: 2,43±1,35)
Research group’s response to the statement: “If I have a positive experience with a brand, I trust all products from the parent brand to be good.” 7,0% strongly disagree, 11,5% somewhat agree, 11,9% neither agree nor disagree, 58,8% somewhat agree and 10,7% strongly agree. (Mean ± Standard dev.: 3,55±1,06)
Distribution of the answers to the statement: “If I see many products from the same parent brand available in more places, I consider it to be better than other brands.” 3,7% strongly disagree, 4,1% somewhat agree, 7,0% neither agree nor disagree, 52,3% somewhat agree and 32, 9% strongly agree. (Mean ± Standard dev.: 4,07±0,95)
Distribution of the research group’s thoughts on “Brand Loyalty / Resonance” (n = 243)
Strongly disagree (%) Somewhat disagree (%) Neither agree nor disagree (%) Somewhat agree (%) Strongly agree (%) Mean ± Standard dev.
I will always buy new products of a brand as soon as it launched if I am a loyal user of the brand 49,0 18,9 16,9 14,4 0,8 1,99±1,15
I always recommend new products of a brand I am loyal to even I haven’t used it46,5 21,4 10,7 14,8 6,6 2,14±1,32
I would rather buy different products of the same brand I am loyal to /use rather than from a competition 31,3 19,8 22,6 21,4 4,9 2,49±1,27
Distribution of the answers to the statement: “I will always buy new products of a brand as soon as it launched if I am a loyal user of the brand” 49,0% strongly disagree, 18,9% somewhat agree, 16,9% neither agree nor disagree, 14,4% somewhat agree and 0,8% strongly agree. (Mean ± Standard dev.: 1,99±1,15)
Research group answered to the statement: “I always recommend new products of a brand I am loyal to even I haven’t used it” 46,5% strongly disagree, 21,4% some-what agree, 10,7% neither agree nor disagree, 14,8% somewhat agree and 6,6+% strongly agree. (Mean ± Standard dev.: 2,14±1,32)
Research group’s response to the statement: “I would rather buy different prod-ucts of the same brand I am loyal to /use rather than from a competition” 31,3% strongly disagree, 19,8% somewhat agree, 22,6% neither agree nor disagree, 21,4% somewhat agree and 4,9% strongly agree. (Mean ± Standard dev.: 3,49±1,27)
Distribution of Brand Equity Aspects and Brand Extension scores in the Research Group (n = 243),
Mean Standard deviation Minimum value Maximum value
Brand Identity/ Awareness 3,23 0,78 1,00 5,00
Brand Meaning/ Perceived Quality 2,63 0,87 1,00 4,67
Brand Response/ Brand Association 3,35 0,77 1,00 5,00
Brand Loyalty/ Resonance 2,21 0,94 1,00 4,67
Brand Extension 2,85 0,60 1,00 4,25
The brand equity aspects scores of the participants in the study group were: Brand Identity / Awareness 3,23 ± 0,78, Brand Meaning / Perceived Quality 2,63 ± 0,87, Brand Response / Brand Association 3,35 ± 0,77, Brand Loyalty / Resonance 2,21 ± 0,94 and Brand Extension point environment composed of these factors is determined as 2,85 ± 0,60.
According to the results of the research, order of importance of brand equity as-pects in the brand extension process are Brand Response / Brand Association (average score 3,35), Brand Identity / Awareness (average score 3,23), Brand Meaning / Per-ceived Quality (average score 2,63) Brand Loyalty / Resonance (average score of 2.21).
Results of the Correlation Analysis between Brand Aspects and Brand Extension in the Research Group (Pearson Correlation)
Brand Identity/ Awareness Brand Meaning/ Perceived Quality Brand Response/ Brand Association Brand Loyalty/ Resonance Brand Extension
Awareness r 1 ,246 ,355 ,187 ,603
p . ,000 ,000 ,003 ,000
Brand Meaning/ Perceived Quality r ,246 1 ,408 ,409 ,737
p ,000 . ,000 ,000 ,000
Brand Response/ Brand Association r ,355 ,408 1 ,427 ,755
p ,000 ,000 . ,000 ,000
Brand Loyalty/ Resonance r ,187 ,409 ,427 1 ,741
p ,003 ,000 ,000 . ,000
Between the scores of the research group, statistically meaningful relationships were found; a moderate uphill (positive) relationship between the scores of Brand Ex-tension scores and Brand Identity / Awareness (r: 0,603; p < 05), a strong uphill (positive) relationship between Brand Meaning/ Perceived Quality (r:0,737; p<0,05), a strong uphill (positive) relationship (r:0,755; p<0,05) between Brand Response/ Brand Association, a strong uphill (positive) (r:0,741; p<0,05) relationship between Brand Loyalty/ Resonance.
Looking at the relationships between Brand Identity/ Awareness and the other aspects of brand equity, statistically meaningful relationships were found. A weak (uphill) positive (r:0,246; p<0,05) between brand meaning / perceived quality, a weak (uphill) positive (r:0,355; p<0,05) brand response/ brand association and lastly a very weak (up-hill) positive (r:0,187; p<0,05 relationship found with brand loyalty/ resonance.
Other statically meaningful relationships were found between Brand Meaning / Perceived Quality and other aspects of brand equity; a weak (uphill) positive (r:0,246; p<0,05) relationship between brand identity / awareness, a moderate (uphill) positive (r:0,408; p<0,05) between brand Response/ brand Association and a moderate (uphill) positive relationship with brand loyalty / resonance.
Focusing on Brand Response / Brand Association scores and its relationship with other aspects; a weak (uphill) positive relationship (r:0,355; p<0,05) between brand identity / awareness, a moderate (uphill) (r:0,408; p<0,05) positive relationship between with brand meaning / perceived quality, and a moderate (uphill) positive relationship (r:0,427; p<0,05) with brand loyalty / resonance were found.
Lastly the relationship between Brand Loyalty / Resonance and other aspects of brand equity measured as following; a very week (uphill) (r:0,187; p<0,05) positive relationship with brand identity / awareness, a moderate (uphill) (r:0,409; p<0,05) positive relationship with Brand Meaning/ Perceived Quality and a moderate (uphill) (r:0,427; p<0,05) positive relationship with Brand Response/ Brand Association.
Comparison of Brand Equity Aspects and Brand Extension Scores by Gender in the Research Group (Independent Samples T Test)
n Mean Standard deviation t p
Brand Identity/ Awareness Woman 124 3,22 0,74 ,150 ,881
Man 119 3,24 0,81 Brand Meaning/ Perceived Quality Woman 124 2,72 0,86 1,599 ,111
Man 119 2,54 0,87 Brand Response/ Brand Association Woman 124 3,42 0,74 1,410 ,160
Man 119 3,28 0,80 Brand Loyalty/ Resonance Woman 124 2,28 0,92 1,207 ,229
Man 119 2,13 0,96 Brand Extension Woman 124 2,91 0,57 1,464 ,145
Man 119 2,80 0,62 No statistically significant difference was found between the brand identity / awareness, brand mean / perceived quality, brand response / brand association, brand loyalty / resonance and brand extension scores of the men and women in the research group (p> 0,05).
Comparison of Brand Equity Aspects and Brand Extension Scores by Marital Status in the Research Group (Independent Samples T Test)
n Mean Standard deviation t p
Brand Identity/ Awareness
92 3,29 0,77 ,989 ,324
Single 151 3,19 0,78 Brand Meaning/ Perceived Quality
Married 92 2,69 0,86 ,844 ,399
Single 151 2,59 0,87 Brand Response/ Brand Association
Married 92 3,42 0,76 1,077 ,283
Single 151 3,31 0,78 Brand Loyalty/ Resonance
Married 92 2,36 1,01 1,946 ,053
Single 151 2,11 0,88 Brand Extension
Married 92 2,94 0,64 1,746 ,082
Single 151 2,80 0,57 No statistically significant difference was found between the brand identity / awareness, brand meaning / perceived quality, brand response / brand association, brand loyalty / resonance and brand extension scores of the married and single individu-als in the study group (p> 0,05).
Comparison of Brand Equity Aspects and Brand Extension Points by Country of Living in the Research Group
Country n Mean Standard deviation t p
Brand Identity/ Awareness Germany 95 3,02 0,77 3,447 ,001
Turkey 148 3,36 0,75 Brand Meaning/ Perceived Quality Germany 95 2,82 0,78 2,819 ,005
Turkey 148 2,50 0,90 Brand Response/ Brand Association Germany 95 3,31 0,74 ,698 ,486
Turkey 148 3,38 0,80 Brand Loyalty/ Resonance Germany 95 2,36 0,82 2,133 ,034
Turkey 148 2,10 1,00 Brand Extension Germany 95 2,88 0,57 ,520 ,604
Turkey 148 2,84 0,61 A statistically significant difference was determined between the Brand Identity / Awareness, Brand Meaning / Perceived Quality, Brand Loyalty average scores of the participants living in Germany and Turkey (p <0.05).
Brand Identity / Awareness average score for participants in Germany was 3,02±0,77 while the average score for Turkish participants was measured as 3,36±0,75. There was statistically significant difference was measured.
The average score for Brand Meaning / Perceived Quality was measured as 2,82±0,78 for participants from Germany and 2,50±0,90 for participants from Turkey. There was also statistically significant difference was measured between participants living in Turkey and Germany.
The average score for Brand Loyalty / Resonance was determined as 2,36±0,82 for participants from Germany and 2,10±1,00 for participants from Turkey. There was also statistically significant difference was measured between participants living in Turkey and Germany.
Finally, statistically significant difference couldn’t be detected between the Brand Response/ Brand Association and Brand Extension scores of the participants living in Germany and Turkey. (p;0,05).
Comparison of Brand Factors and Brand Extension Points According to Educational Status in the Study Group (One-way ANOVA)
n Mean Standard deviation F p
Brand Identity/ Awareness Highschool 33 3,26 0,79 ,372 ,828
Associate Degree 6 3,00 1,35 Bachelor’s Degree 98 3,29 0,75 Master’s Degree 86 3,18 0,77 PhD Degree 20 3,20 0,77 Brand Meaning/ Perceived Quality Highschool 33 2,70 0,92 ,491 ,743
Associate Degree 6 2,33 1,01 Bachelor’s Degree 98 2,58 0,88 Master’s Degree 86 2,70 0,82 PhD Degree 20 2,53 0,93 Brand Response/ Brand Association Highschool 33 3,46 0,81 ,463 ,763
Associate Degree 6 3,61 1,32 Bachelor’s Degree 98 3,30 0,77 Master’s Degree 86 3,35 0,72 PhD Degree 20 3,30 0,79 Brand Loyality/ Resonance Highschool 33 2,06 1,00 ,743 ,564
Associate Degree 6 2,67 1,40 Bachelor’s Degree 98 2,22 0,96 Master’s Degree 86 2,17 0,86 PhD Degree 20 2,37 0,95 Brand Extension Highschool 33 2,87 0,64 ,020 ,999
Associate Degree 6 2,90 1,03 Bachelor’s Degree 98 2,85 0,57 Master’s Degree 86 2,85 0,56 PhD Degree 20 2,85 0,68 One-way ANOVA test is used to compare the means between the groups to determine whether there is statistically significant difference between the means of independent groups.
In this research the statistically significant difference couldn’t be found between high school, associate degree, bachelor’s degree, master’s degree and PhD degree graduates and Brand Identity/ Awareness, Brand Meaning/ Perceived Quality, Brand Response/ Brand Association, Brand Loyalty/ Resonance and Brand Extension scores.
Results of the Relationship Analyses between Age, Monthly Income and Brand equity Aspects and Brand Extension in the Research Group (Pearson Correlation)
Brand Identity/ Awareness Brand Meaning/ Perceived Quality Brand Response/ Brand Association Brand
Loyalty/ Resonance Brand Extension
Age r ,017 -,072 -,137 -,081 -,097
p ,792 ,262 ,033 ,210 ,133
Monthly income r -,047 ,122 -,123 ,012 -,006
p ,465 ,058 ,056 ,848 ,926
There was a statistically significant difference determined between the age of the participants and Brand Response / Brand Association (p<0,05). A very weak (downhill) negative relationship (r: -0,137; p<0,05) was found between two variables. The higher the age of the participant goes, the lower Brand Response / Brand Association scores measured. (even the relationship is very weak)
Between the age of the participants and Brand Identity / Awareness, Brand Meaning/ Perceived Quality, Brand Loyalty/ Resonance and Brand Extension scores, there were no statistically meaningful relationship determined (p>0,05).
Between the monthly income of the participants and Brand Identity / Awareness, Brand Meaning / Perceived Quality, Brand Loyalty / Resonance and Brand Extension scores, there were no statistically meaningful relationship was found (p>0,05).
As mentioned earlier in the paper, the prima facie motivation to conduct this re-search was to analyse the relationship between Brand Equity Aspects and Brand Extension Process. Furthermore, the research was conducted to analyse whether there is a difference or relationship between the socio-demographic factors and Brand Equity Aspects and Brand Extension.
By combining Keller’s model and Aaker’s model, a working model was established and reduced to 4 categories: Brand Identity / Awareness, Brand Meaning / Perceived Quality, Brand Response / Brand Association, Brand Loyalty / Resonance. Four primary and six sub-hypotheses were established which helped formulate the survey statements.
Through the survey conducted, it can be seen that there is a higher tendency for brand logos to reflect the same values for the new products that a consumer is considering, to buy. Companies could consider this an important factor for brand extension. When a consumer looks for a particular brand at the time or purchase, as per the survey, a majority of consumers only consider the brand they are aware of.
While brand is being extended, brand managers must examine how far it can be stretched, as the survey was quite inconclusive in this regard as there was equal response, across the board when asked if they would consider buying products of a particular brand even though the product is not of the core category of the parent brand.
It is not conclusive if price of a new product from the same brand is relevant. It is also not conclusive if many products from the same parent brand is considered better than other brands even if they are widely available.
Furthermore, the next statement in the survey, showed that the respondents would not necessarily buy all the products from the brand they love. However, if the respondents had a positive experience with a brand, it can be seen through the survey that it has strong effect on purchasing decision of extended products of the same brand. Memories a consumer has with a brand has a very strong positive influence on buying behaviour for most respondents while purchasing new products from the same brand.
The respondents conveyed through the survey, that they will not necessarily buy new products as soon as it is launched even they are a loyal user of the brand. It can also be seen through the study that the respondents do not recommend new products even if they are a loyal brand user to other consumers if they have not had an experience themselves. It could not be established if the respondents would buy different products of the brand they are loyal to rather than from the competition.
From the survey, if we analyse the distribution of Brand Equity Aspect scores and Brand Extension scores, it can be established that the order of importance is as follows:
3.Brand Meaning/Perceived Quality
In this research, the population were adults (+18) who live in Germany and Tur-key. The research sample consisted of people who were in the social network of the re-searcher and randomly invited to the survey and agreed to participate. There were 95 participants from Germany and 148 participants from Turkey, making the total number of respondents 243.
According to the results of the research, order of importance of the brand equity aspects in the brand extension process are; Brand Response / Brand Association (aver-age score 3,35), Brand Identity / Awareness (average score 3,23), Brand Meaning / Perceived Quality (average score 2,63) Brand Loyalty / Resonance (average score of 2.21).
Brand Extension and Brand Meaning / Brand Association (r: 0,755; p <0,05), Brand Loyalty / Resonance (r: 0,741; p < Perceived Quality (r: 0,737; p <0,05) were found to have statistically significant positive strong correlations. Again, Brand Extension was found to have a statistically significant positive correlation between brand identity and brand identity / awareness scores (r: 0,603; p <0,05).
Brand Meaning of participants in the study group in Germany / Perceived Quality and Brand Loyalty / Resonance average scores based on the average score of respondents in Turkey were found to be statistically significantly larger (p <0.05). The participants from Turkey Brand Identity / Awareness mean scores based on the average score of respondents in Germany were found to be statistically significantly larger (p <0.05). It is thought that this differentiation originated from cultures.
The results of this study are: there is no generalization to the reason that the sampling method used is indiscriminately, and the sample size is very small. However, it is valuable in terms of gathering data from the field (consumers / society) and giving an idea of the results achieved.
Further research from this study can be done by analysing more Brand Equity models so that the importance of more aspects can be checked during the process of Brand Extension.
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The Relationship Between Brand Equity Aspects and Brand Extension Survey
1.What is your age?
2.What is your gender?
3.What is your marital status?
4.What is the highest degree or level of school you have completed or already enrolled?
5.Where do you live?
6.What is your monthly income?
7.Brand logos reflect the same values for the new products that I am considering buying.
8.Consumer’s Consideration: When buying a new product, I only consider brand I am aware of
9.I only consider buying products of a particular brand even though the product is not core category of the parent brand
10.If a brand is available in many categories of products, I consider it is of better quality.
11.Price is not considered a problem of a new product from the parent brand if I have great affinity towards the brand
12.If I see many products from the same parent brand available in more places, I consider it to be better than other brands.
13.I would buy all products from a brand I love
14.If I have a positive experience with a brand, I trust all products from the parent brand to be good.
15.My memories with a brand affect me to buy new products from the brand.
16.I will always buy new products of a brand as soon as it launched if I am a loyal user of the brand
17.I always recommend new products of a brand I am loyal to even I haven’t used it
18.I would rather buy different products of the same brand I am loyal to /use rather than from a competition