Academic journal article IUP Journal of Brand Management

An Analytical Study of Spillover Effect of Different Branding Elements on Customer-Based Brand Equity

Academic journal article IUP Journal of Brand Management

An Analytical Study of Spillover Effect of Different Branding Elements on Customer-Based Brand Equity

Article excerpt

Introduction

Since the emergence of the term 'brand equity' in the 1980s, different researchers have defined it in different ways. Reviewing the existing literature, it can be clearly stated that brand equity involves two aspects: consumers' behavioral response to the brand, examined mainly by Customer-Based Brand Equity (CBBE) model and financial impact of the brand as expressed through return on investment, profit, turnover, etc., referred to as financial equity. Researchers have tried to establish the relationship between different brand elements and brand equity by defining brand equity in different ways. Chaudhuri and Holbrook (2001) defined brand equity outcomes as market share, price and shelf spacing and found the impact of brand attitudes and brand loyalty on brand outcome. Keller (2001) defined brand equity as brand strength in terms of market leadership and market share. Keller and Lehmann (2003) introduced 'brand value chain' model and measured brand equity as brand performance in terms of price elasticity and premiums, cost structure, market share, profitability and expansion success.

Researchers have used different branding elements to measure CBBE, which provides a unique perspective on what brand equity is and how these elements influence brand equity. Against this backdrop, the present paper attempts to empirically test the interrelationship of different branding elements with CBBE, especially for durable products.

Literature Review

Today, branding is such a strong force that hardly anything goes unbranded. In order to meet the challenges posed by competitors, marketers and researchers have identified the role of brand equity constructs. For the purpose of this study, the literature addressing the major branding elements which influence the measurement of brand equity from customer's point of view is reviewed.

Chaudhuri and Holbrook (2001) conducted a study to find the relationship between brand trust, brand effect and brand performance outcomes (market share and relative price) with purchase loyalty and attitudinal loyalty. This empirical study was conducted in three phases. They found that brand trust and brand effect are both indirectly related to market share and relative price, and indirect linkage occurs through the constructs of purchase loyalty and attitudinal loyalty. Brand trust and brand effect are both directly related to attitudinal loyalty and purchase loyalty.

Keller (2001) proposed a brand building model which involves four steps: (a) Establishing the proper brand identity; (b) Creating the appropriate brand meaning; (c) Eliciting positive brand responses; and (d) Forging brand relationship with customers who are characterized by intense active loyalty. Achieving these four steps involves six brand building blocks, namely, brand salience, brand performance, brand imagery, brand judgment, brand feelings and brand resonance. The first step of this model is to ensure identification of the brand with customers and an association of the brand in customers' minds with a specific product class or customer need. The second step is to firmly establish the brand meaning in the minds of the customers by strategically linking a host of tangible and intangible brand associations. The third step is to elicit the proper customer responses to this brand identity and brand meaning. The fourth and final step of this model is conversion of brand response to create intense, active loyalty relationship between customers and the brand. The model provides a comprehensive way of covering important branding topics, as well as useful insights and guidelines for marketers to help them to set strategic direction and inform their brand-related decisions.

Keller (2003) analyzed the key issue, i.e., synthesizing the multidimensionality of branding elements to measure brand knowledge. This study is a representation of brand knowledge based largely on cognitive psychology. It demonstrated that consumer brand knowledge relates to the cognitive representation of the brand. …

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