Brand Equity

What it is

Keller's paper, published in 1993, proposes a conceptual model of brand equity from the perspective of the individual consumer. It defines customer-based brand equity as the effect of brand knowledge on the consumer's response to the marketing of the brand. The order matters. The knowledge comes first, and the value is what that knowledge does when the consumer meets the brand's marketing.

The knowledge is described as an associative network memory. The phrase places brand knowledge among network accounts of memory, in which what is stored is a set of linked items and not a single judgement. A brand, on this account, is not one fact in a buyer's head. It is a name together with the things attached to it.

Two parts make up the network. Brand awareness concerns whether the brand is known to the buyer. Brand image is the set of associations attached to it. Keeping the two apart lets the model say that a name can be known and carry few associations, or carry many, and that the value of the brand depends on both.

The textbook Consumer Behaviour gives the idea in everyday terms. It ties brand equity to the buyer's image of how the product performs, how exciting the brand is and the social values of the company behind it. Buyers who see a brand as superior and as coming from a company they regard as acting appropriately will go to extra trouble to buy it. The same textbook treats a brand's image as the web of associations a person holds, what they think and feel when they hear the name, and notes that brands compete to be among the options that come to mind for a need.

The 1993 paper goes on to address how brand equity of this kind can be built, measured and managed, and it sets out areas for future research.

In effect

The clearest later use of the idea is the move from knowledge in general to knowledge at the point of purchase. Jenni Romaniuk and Byron Sharp argued in 2004 that treating a brand as top of mind, the first one named when the category is the cue, was too narrow a measure. They proposed brand salience instead, a brand's propensity to be noticed or to come to mind in buying situations, reflecting the quantity and quality of the memory structures buyers hold about brands. They separated it from awareness and from attitude. The site's page on Mental Availability follows that line.

A second use concerns how easily the stored knowledge is reached. Angela Lee and Aparna Labroo reported in 2004 that, under the processing fluency model, advertising exposure makes a brand easier to recognise and process, and that this ease goes with more favourable attitudes. In three experiments they extended the model to conceptual fluency, how readily a target comes to mind, and found that targets which came to mind more readily drew more favourable attitudes. The site's page on Processing Fluency covers the wider research on ease and liking.

A third use links the buyer's side to the brand's results. Arjun Chaudhuri and Morris Holbrook built a data set of 107 brands from three surveys of consumers and brand managers. With product-level and brand-level factors held constant, brand trust and brand affect combined to determine two kinds of loyalty. Purchase loyalty went with greater market share, and attitudinal loyalty went with a higher relative price. That second link is close to the textbook's description of equity as a willingness to pay more for the name.

For a business, the practical reading is about inputs. A company chooses which cues to use, how consistently it uses them and how often buyers meet them, and the knowledge forms in buyers' memory as a result. The distinctive marks a brand uses are one such set of cues, and the site's page on Distinctive Assets takes them up.

What it does not say

Brand equity in the consumer-based sense is a description of what buyers hold and what it does to their response. It does not say that a company can set that content directly. What a buyer stores depends on what the buyer meets and attends to, and the model concerns the stored result.

Keller's 1993 paper is a conceptual model. How strongly each part of the knowledge moves choice, and in which categories, is a question for the empirical work that followed, such as the salience paper, the fluency experiments and the loyalty study. The fluency experiments measured attitudes in controlled settings, and the loyalty study measured associations across brands from surveys, so neither forecasts what a given campaign will do to sales.

Equity is also not the same as attitude. Romaniuk and Sharp distinguish salience from both awareness and attitude, and Keller's model separates awareness from image. A buyer can think well of a brand and still not think of it when a purchase is in view.

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