A Study of Brand Strength Analysis

By Diwan, Upasana; Chaturvedi, D. D. | Competition Forum, January 1, 2015 | Go to article overview

A Study of Brand Strength Analysis


Diwan, Upasana, Chaturvedi, D. D., Competition Forum


OBJECTIVE

The study is designed to increase the understanding of Indian consumers' brand choice for domestic brands. The study examines the impact of different dimensions of brand strength on overall consumers based on brand preferences in the Indian market.

LITERATURE REVIEW

Brand, as one of the most valuable assets of any business, is well recognized among academicians and marketers (Keller, 1993; Aaker, 1996) and strong brand strength provides competitive advantage to the firm (Keller, 1993; Ailawadi, Lehmann, & Neslin, 2003). Many researchers have used different words to define brand strength, but the meaning is more or less similar (Keller, 1993; Simon & Sullivan,1993; Aaker, 1996; Yoo et al., 2000). It is defined as the incremental value of a product or service due to the brand name (Yoo & Donthu, 2001). It has been considered as an indispensable element in assessing the strength of brands. Broadly, there are three approaches to measuring brand strength. The first is consumer mind set which assesses awareness, attitude, association, attachment and loyalty of consumers towards brands. The second is the product outcome approach, which measures market share, price premium and other market related outcomes. The third approach is financial market outcome, which deals with brand as financial asset (Ailawadi et al., 2003). Consumer brand strength is part of the brand value chain in which a marketing program affects consumer mind set about the brand. This in turn affects brand performance in the market, providing value to the shareholder and consumers (Keller & Lehmann, 2003). The basis of this approach is that the power of a brand lies in what consumers have learned, felt and heard about the brand over time. Consumers' perception about the brand defines the power of brand (Keller, 2001).

Studies by Keller (1993) and Aaker (1986) are primarily based on two components: brand awareness and brand image. Aaker (1996) has categorized brand strength in five dimensions: brand awareness, brand association, perceived quality, brand loyalty and other proprietary brand assets like trademark, patents and channel relationships. The first four components represent customer evaluations and it has been widely adopted to measure customer based brand strength in previous studies (Yoo et al., 2000). The work of Yoo et al. (2001) is notable in developing and validating measures of consumer based brand strength by taking into account four components of brand strength: brand awareness, brand association, perceived quality and brand loyalty. Consistent with the work of Yoo et al. (2001), this study considers these four components to measure consumer based brand strength.

Good management of the brand portfolio demands the existence of appropriate brand valuation tools, as well as other measures. If we rely on existing measures in the company, which are part of an internal accounting system, i.e., ROA, sales, cost margin or sales margin, etc., we are looking at short term measures, which do not provide incentives for the investment in brands (Aaker, 1996, p. 103). Therefore, Aaker sees the brand strength as a sensitive and credible measure, which supplements the short-term financial measures. This measure is defined by Zimmerman et al. (2001, p. 46) with four different elements: brand identity, brand knowledge, brand positioning and perceived quality. These originate from Aaker's four dimensions, which are as follows: brand loyalty, perceived quality, associations and awareness. Aaker's Brand Equity Ten encompasses the four elements mentioned above, as well as financial measures. The appraisal of the brand strength can reveal areas of brand vulnerability (Cravens & Guilding, 1999, p. 58). In this way, managers can consider adequate actions that should be taken in order to make adjustments in the brand management strategy and implementation and they can make implications for the reallocation of budget.

Even though Aaker sees all elements of the Brand Equity Ten as the elements of the brand strength, I will focus our attention on the following four elements: brand identity, brand knowledge, perceived quality and brand positioning. …

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