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Brand Equity vs. Brand Value: What’s the Difference?

How Should Brand Equity & Brand Value Be Measured?

❶All factors combined, these brands boast positive reputations, or brand equities. Register username password confirm email.

How Brand Equity Came Into Place


The tangible and intangible assets are identified and the relative role of the brand is subjectively estimated by a group of knowledgeable people, taking into account the business model and any information about the brand in terms of its relative visibility, associations and customer loyalty.

The value of the brand is then aggregated over products and markets countries to determine a value for brand. Evidence comes from a series of studies I conducted with Professor Robert Jacobson of the University of Washington, using time series data which included information on accounting-based return-on-investment ROI and models that sorted out the direction of causation.

The consistent finding was that the impact of increasing brand equity on stock return was nearly as great as that of an ROI change, about 70 percent as much. In contrast, advertising, also tested, had no impact on stock return except that which was captured by brand equity.

A third approach is to look at case studies of brands that have created enormous value. Or, the fact that from to two cars were made in the same plant using the same design and materials and marketing under two brand names, Toyota Corolla and Chevrolet GEO Prism. And consumers and experts both gave it higher ratings. Only the brand was different. What is the business strategy?

What is the strategic role of the brand in supporting that strategy? How critical is it? Is price competition the alternative to creating and leveraging brand equity? What impact will that have on profit streams going forward? Management guru Tom Peters said it well:. Brand equity continues to be a driver of much of marketing, indeed business strategy.

For it to work, it needs to be understood conceptually and operationally. And it is important that it be tied to brand value in credible ways. Discover how Prophet helps companies establish a brand strategy that drives business growth. I was expecting some considerations about market level measures… Best regards, Olegario.

From that study, it is found that service quality, perceived value, as well as customer satisfaction all are significant in affecting customer loyalty. There are indeed many other studies that had found empirical evidences on how certain antecedents or factors are related to customer loyalty, and it is not within the scope of this to discuss them all in details.

Anyway, some of the statistical significant antecedents of customer loyalty include: From another perspective, scholars have also been interested on investigating into how customer loyalty may affect other constructs.

It is found that customer loyalty is indeed a significant driver of customer lifetime value. From that study, it is found that customer loyalty is indeed a significant variable that influences repurchase intention as well as repurchase behaviours. From these studies, it can be seen that empirical evidences indeed support the notion that customer loyalty is important, as it will affect the various outcomes related to the performance of an organisation.

In the previous sections, discussions have been focusing on the two variables being examined in this dissertation, namely: However, very little attentions actually focus on how these two variables are related to each other. Such issue will therefore be discussed, in this section — as to better inform about how previous studies or theories had discussed about the relationships between brand equity and customer loyalty. In theory, brand equity should be related positively to customer loyalty — both in terms of the attitudinal and behavioural perspective of consumer loyalty Tatiana, Indeed, there are some studies being performed by scholars to further verify such theory — on the idea that brand equity should be positively related to customer loyalty.

Some of these studies available will be presented accordingly below. From the study, it is found that there is indeed a significant relationship between brand personality and customer loyalty. From the study, it is found that evidences indeed suggest that there is a significant impact from brand image on customer loyalty. The results indicated that the relationship between brand trust and customer loyalty is positive and significant.

It is found that eight sub-dimensions of brand associations namely: Apart from that, Hung had also examined into the effect of brand image on customer loyalty — with the focus on insurance industry in Taiwan.

The results from the study indicate that brand image positively affects customer loyalty. From that study, it is found that perceived brand relationship orientation has direct positive impacts on brand trust and affective commitment and, in turn, has an indirect impact on attitudinal loyalty.

So far, the studies highlighted above all concerns on how certain dimension of brand equity is related to customer loyalty. Nevertheless, there are also some studies albeit limited on how brand equity affects customer loyalty. These studies are directly related to the research to be conducted in this dissertation.

As such, these studies will be discussed in the subsequent paragraphs as follow so that comparison on the results eventually to be obtained in this research with the results from the other studies conducted by other schoalrs can be made.

For that, Hu a had examined about how brand equity affect customer loyalty — with the focus on retail chain stores in Taiwan. With a total of individual surveys for analysis, it is found that brand equity indeed has significant and positive relationship to customer loyalty. Yet, Hu b had also examined into how brand equity is related to customer loyalty — with the study focus on consumer electronic industry.

From that study, it is again found that brand equity is again a significant factor that affects customer loyalty. Later, Hu again investigate into the relationship between brand equity and customer loyalty — with the focus on shopping experience for digital cameras in Taiwan. With a total of individual surveys, it is found that brand equity and customer loyalty are related, and that both of them indeed mediate the relationships between these variables: Based on that study, it is found that these dimensions of brand equity, namely: Overall, from a review of the literature, it can be seen that both brand equity and customer loyalty are argued to be related.

Specifically, brand equity contributes to better customer loyalty. The empirical evidences available albeit limited also support the notion that brand equity is related positively and significantly to customer loyalty. As such, the conceptual framework to be examined within this dissertation can be illustrated as follow. The research methodology employed to investigate into this particular research aim will be further be explained in the next chapter. The effect of services marketing mix elements on customer-based brand equity: An empirical study on mobile telecom service recipients in Jordan.

International Journal of Business and Management, 8 11 , Testing the role of service quality on the development of brand associations and brand loyalty. Managing Service Quality , 18 3 , Investigate the impact of relationship marketing orientation on customer loyalty: International Journal of Marketing Studies, 2 1 , Understanding price premium for grocery products: A conceptual model of customer-based brand equity.

The Journal of Product and Brand Management , 16 6 , Determinants of the brand equity: A verification approach in the beverage industry in turkey. Impacts of in-store manufacturer brand expression on perceived value, relationship quality and attitudinal loyalty. Impacts of perceived brand relationship orientation on attitudinal loyalty. European Journal of Marketing , 46 11 , Customer loyalty and the effect of switching costs as a moderator variable: A case in the Turkish mobile phone market.

The impact of product-country image and marketing efforts on retailer-perceived brand equity: Journal of Retailing , 85 4 , Correlates of customer loyalty to their bank: A case study in Nigeria. The International Journal of Bank Marketing, 24 7 , Brand equity in the business-to-business context: Examining the structural composition.

Journal of Brand Management , 19 8 , The impact of customer experience on brand equity in a business-to-business services setting. Journal of Brand Management , 17 6 , Brand equity and current use as the new horizon for repurchase intention of smartphone. International Journal of Business and Society , 13 1 , Family as a source of consumer-based brand equity.

The Journal of Product and Brand Management , 16 3 , The influence of brand equity on consumer responses. The Journal of Consumer Marketing , 30 1 , The Journal of Consumer Marketing , 20 4 , Relationship-value-based antecedents of customer satisfaction and loyalty in manufacturing. Significant components of service brand equity in healthcare sector. A study of service quality, customer satisfaction and loyalty in Taiwanese leisure industry.

Journal of American Academy of Business, Cambridge , 9 1 , Exploring customer-based airline brand equity: Transportation Journal , 49 1 , The driving forces of customer loyalty: A study of internet service providers in Hong Kong.

International Journal of E-Business Research , 4 4 , Journal of Fashion Marketing and Management, 13 1 , How does customer service affect brand loyalty.

Allied Academies International Conference. Academy of Marketing Studies. Proceedings , 14 2 , Effects of perceived employee emotional competence on customer satisfaction and loyalty. Journal of Service Management , 24 1 , Customer satisfaction, loyalty and commitment in service organizations. Management Research News, 29 12 , Interdisciplinary Journal of Contemporary Research in Business , 3 6 , Customer satisfaction and loyalty in a digital environment: The Journal of Consumer Marketing, 23 7 , Consumer-based brand equity in the television industry: A study of a private TV channel in turkey.

Academy of Marketing Studies Journal , 16 1 , Australasian Marketing Journal, 12 3 , Why it is customer loyalty that counts and how to measure it. Managing Service Quality, 5 1 , Evidence from banking sector of Pakistan. International Journal of Business and Social Science, 3 16 , Survey relationship between customer relationship management and service quality, satisfaction and loyalty case study Mellat bank.

Consumer-based brand equity and top-of-mind awareness: The Journal of Product and Brand Management , 21 6 , The customer satisfaction-customer loyalty relationship. Management Decision, 50 9 , The differential effects of relational and functional customer orientation. Academy of Marketing Science. Journal , 39 6 , The effects of advertising spending on brand loyalty in services. European Journal of Marketing , 45 4 , How brand equity, marketing mix strategy and service quality affect customer loyalty: The case of retail chain stores in Taiwan.

International Journal of Organizational Innovation Online , 4 1 , Exploring the relationship between customer involvement, brand equity, perceived risk and customer loyalty: Thus people talk of "hoovering," "cola" is a generic for a soft drink, and people say, "Let me get you a Xerox of that" even when the copier used is of another brand. In these situations the brand equity of the Hoover vacuum cleaner, of Coca-Cola, and of Xerox copiers is clearly evident.

As discussed elsewhere in this volume see Brands and Brand Names Coca-Cola's brand equity is the highest in the world. Brand equity, however, can also turn negative. Examples are communications services that get a reputation for wretched customer service, automobiles with a dangerous design defect, or a widely-used pharmaceutical that is discovered, later, to cause heart problems.

Unless corrected, negative brand equity soon means oblivion. To be sure, brand equity is just one way of saying that a product or service has superior features and is therefore profitable for the company that owns the brand. Branded products invariably command a higher price than so-called "generic" or "store brands"—even when the product is itself a commodity like sugar.

In such cases the higher price is due almost entirely to the power of the brand. Quite evidently, therefore, "brand," as such, is separable from the product or service narrowly viewed. Brands can be bought and sold. The buyer acquires the brand equity and attempts, thereafter, to maintain it by selling a product that measures up to the brand's reputation. Similarly, the owner of a famous brand can put on the market an inferior product and at least temporarily enjoy benefits brought by the brand's equity—until the customer becomes wise.

For these reasons, brand equity management has become a business specialty complete with competing "brand equity models" and "brand strategies.

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This study involved a nation‐wide sample of industrial customers of heavy equipment manufacturers. The results suggest that brand equity and trust are consistently the most important antecedents to both behavioral and attitudinal forms of customer loyalty. There is also evidence that the models underlying the formation of behavioral versus attitudinal forms of customer loyalty .

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It is found that aside from brand awareness, all the other three dimensions of brand equity (i.e., brand loyalty, perceived quality and brand image) indeed are related significant to the overall brand equity of a company.

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Purpose - Given the rising number of brands available in the country, there may be a corresponding rise in customer loyalty towards their preferred. Sep 03,  · Both brand loyalty and brand equity are developed by either a consumer's perception or experience with a brand or through carefully planned and orchestrated marketing and advertising efforts. Some products will use a consumer's loyalty to a particular brand to introduce or sell similar products, the hope being that loyalty .

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Free Essay: Brand Equity to Customer Loyalty An examination of brand equity leading to customer loyalty in the clothing industry using the Loyalty Ladder. Although previous research suggests that brand equity has a direct effect on brand loyalty, this empirical study is the first to examine the influence of consumer satisfaction on the relationship between brand equity and brand loyalty .