Brand equity

by Lisa 


Since the emergence of the marketing concept of brand equity in the 1980s, many nuances and theory on the term has evolved. Before, it was recognized as a financial and economic measurement of brand value; whereas today researchers believe also that the consumers contribute in brand’s value creation. 

The Customer-Based Brand Equity (CBBE) places the customer’s mindset in the center of brand equity. Brand knowledge and brand loyalty are essential elements for this kind of approach on brand equity. Brand knowledge itself includes the customers’ awareness of brands and the brand image, i.e. associations they have when confronted with that brand. Brand loyalty reflects customers' tendency to repeat purchases even in appearance of competitors offering products superior in price or features. Some researcher extend the CBBE model with the element of 'perceived quality' or other important  proprietary brand assets depending on the typ of brand. Customers decide what to buy, so ultimately it is in their discretion whether or not a brand is successful. In order to increase sales it is therefore necessary to create confidence in the brand and establish unique association. This in turn will result in improved financial standing of the company.


For Swatch the developed CBBE:

Sources: 
Aaker, D. A., (1991). Managing brand equity: Capitalizing on the value of a brand name (1st ed.), New York, USA: The Free Press. 

Keller, K. L., (1993). Conceptualizing, measuring, managing customer-based brand equity, Journal of Marketing, 57(1), 1-22. 

Keller, K.L., (2008). Strategic Brand Management, Building, Measuring and Managing Brand Equity, 3.Edition, Part I, 2-42, Part III, 288-290