Brand Equity Model

Different Models of Brand Equity

In modern marketing, brand equity is considered one of the key principles that brings the added value to products and services. Brand equity can be defined as a marketing process helping indicate the relationship between the overall customer’s satisfaction and loyalty to the brand. David Aaker, a branding expert, defined brand equity as a set of factors and features related to a brand name and symbol that increases the value provided by a product or service (Aaker, 1991). Basically, if a product is not associated with a brand, it relates to a commodity. At this point, brand equity starts demonstrating its value by bringing the benefits to the revenues by means of increased sales and customer’s willingness to

He suggests comparing a product with a brand name to an unnamed product what can explain the consumer’s buying habits and preferences (Jara & Cliquet, 2008). Keller applies brand awareness and brand image as two major components of his model. Thus, brand awareness relates to brand spontaneous recognition in consumer’s mind, and brand image is defined as brand associations erased in consumer’s memory. In regards to brand associations, three categories emerge, namely, attributes, benefits, and brand attitudes. Attitudes correspond to descriptive characteristics of the product; benefits relate to the personal value attached to the product; and brand attitudes are used for customers’ evaluation of a product. Even though, Keller’s model is considered to be a pioneer in the marketing theory, and many companies choose alternative modern methods to develop brand equity (Jara & Cliquet, 2008).

David Aaker based his model on ten attributes of a brand which can be applied to determine its strengths: quality, differentiation, satisfaction, leadership, value, brand personality, associations, market share, product price, and brand awareness. Aaker suggests keeping a track on each attribute separately without combining them, as the results might vary among different brands and evaluation

One of the latest models of brand equity is the one developed by the marketing communication agencies, Young & Rubicam. They managed to develop the Brand Asset Valuator tool that aims to assess the value and market power of a brand, according to four dimensions: differentiation from its competitors, relevance to a given consumer, consumers’ esteem to the brand, and consumers’ knowledge about the brand and what it represents (Farris, Bendle, Pfeifer & Reibstein, 2014). This model is highly used by international store chains of clothes and accessories as Zara, Mango or Desigual.

Brand valuation model or brand finance approach was also created by a brand strategy agency, but in comparison to Young & Rubicam model, it orientates on financial results demonstrated by the brand. Thus, the analysis of the market dynamics, as well as consumers’ interest in the brand should be conducted. After the data is collected and analyzed, the forecasts for future earnings can be made (Farris, Bendle, Pfeifer & Reibstein,