APPROACHES TO MEASUREMENT OF BRAND EQUITY

Sheela Hiranri, Pinaki Mandal

ABSTRACT
This article reviews the various approaches to defining and Measuring Brand Equity. t analyses
the diverse views regarding the set of attri!utes relevant for "easure"ent of Brand equity.
E#isting "easures of !rand equity have !een classified into three categories for the discussion in
the paper. $ne set of "easures are those focusing on outco"e of Brand Equity at the product
"arket level, the second category is that of "easures related to custo"er "indset while the third
set is !ased on "easure"ent of financial para"eters. The paper presents a co"prehensive
review of the work done !y various researchers over the last few decades. t analyses the "erits
and li"itations of the different types of "easures. Based on the a!ove analysis and o!servations
"ade !y e#perts in related literature the authors suggest the scope for further research in the
discipline.
1: INTRODUCTION
In an ideal world the customers choose between different products and services considering a
long list of criteria including product features, pricing, availability and flexibility. However,
when several companies products and services are almost similar the choice oils down to the
reputation of the respective brands. In this era of internet and IT enabled marketing, companies
deploy a host of customer relationship management (!"# programs to increase the e$uity of
their brands. The current interest in the existing brands is more because of the escalating costs of
developing new brands, which has led to the prevalent usage of existing brands by way of brand
extension (Tauber, %&''#. (ccording to the (merican "arketing (ssociation, a brand is a name,
term, sign, symbol or a combination of them, intended to identify the goods and services of one
seller or a group of sellers and to differentiate them from their competitors. )ar$uhar (%&'&# has
defined brand e$uity as an intangible asset that depends on the association made by the
consumers. However, none of these definitions takes into account the contribution * effect of the
brand on middlemen. This gap in definition has been bridged by )rederick +. ,ebster -r. He
defined brand as a guarantee of consistent features, $uality and performance to the consumers
and is also a pledge of support to the middlemen ()rederick +. ,ebstar, -r., .///#. ,ith such
renowned brands like 0ike, !eebok and Intel in the global market to serve as their inspiration,
businesses are becoming increasingly savvy in the way they regard and manage their brands.
BRAND EQUITY DEFINED
0umerous definitions of brand e$uity have been proposed by different authors. (ccording to
1avid (akar (%&&%#, brand e$uity is the set of assets and liabilities linked to a brand that add to
or subtract from its value to the consumers and business, while )ar$uhar (%&'&# defines brand
e$uity as the monetary value added by the brand to the product. 2wait et al (%&&3# define brand
e$uity as the consumers implicit valuation of the brand in a market with differentiated brands
relative to a market with no brand differentiation, whilst 2rinivasan, han 2u 4ark and 1ae !yun
hang define brand e$uity as the incremental contribution (in 5# per year obtained by the brand
in comparison to the underlying product or service with no brand building efforts ("arch .//6#.
This incremental contribution is driven by the individual customers incremental choice
probability for the brand in comparison to his or her choice probability for the product with no
brand building efforts. )rom a behavioral view point, brand e$uity is critically important to
make points of differentiation leading to competitive advantages based on non price competition
((akar, %&&%#.2omewhat paradoxically, the phenomenon labeled as brand e$uity from the
perspective of a marketing manager corresponds closely to the state of affairs that economists
concerned with social welfare label as 7market inefficiency. 2pecifically, a brand is deemed to
be inefficient to the economists if it offers the same product characteristics at a higher price.
Thus inefficiency refers to 8the extent to which a brand is overpriced relative to its close
competitors9 and involves a 8welfare loss9 (:amakura et al, %&'', p. 3//#)ar$uhar (%&'&# has
conceptuali;ed brand e$uity having three perspectives<
i)Financial: This approach to conceptuali;ing =rand e$uity is based on determining the price
premium the brand commands over a generic product. +xpenses like romotional costs are
also taken into account while using this method of measuring rand e$uity.
ii) Consum! "as#: ( strong brand increases the consumers attitude strength towards the
product associated with the brand. >f course attitude strength is built by experience the
consumers have about a product. This in turn implies that when a new brand is being
launched, trial samples can be more effective than advertising. The consumers awareness
and associations lead to perceived $uality, inferred attributes and eventually brand loyalty.
iii) B!an# $%nsions: ( successful brand can be used as a platform to launch related
products. This helps in leveraging the existing brand awareness thus reducing the advertising
expenses and a lower risk from the perspective of the consumers. =ut his methodology is more
difficult to $uantify. (ccording to (akar (%&&%#, brand $uity is a multidimensional concept. It
consists of brand loyalty, brand awareness, perceived $uality, brand associations and other
proprietary brand assets. >ther researchers also propose similar dimensions. 2hocker and ,eit;
(%&''# propose brand loyalty and brand associations, while :eller (%&&3# suggests brand
knowledge? comprising brand awareness and brand image. 4erceived $uality has been defined by
@eithamal (%&''# as consumers subAective Audgment about a products overall excellence or
superiority. =rand loyalty, as defined by >liver (%&&B#, is a deeply held commitment to rebuy a
preferred product or service consistently in the future. Crover and 2rinivasan, (%&&.# found out
that loyal customers show more favorable response to a brand than non loyal customers. (akar
(%&&%# has defined brand association as anything linked in the memory of the consumers to a
brand, while handon (.//3# has defined brand awareness as accessibility of the brand in the
customers memory.Doo et al (.///# gave a conceptual framework to brand e$uity as follows<
,it
h an increase in marketing efforts, there is an increase in the dimensions of brand e$uity, which
Marketing
Efforts
Dimension
s of
Brand
Equity
Brand
Equity
Value to
the firm
Value to
the
customers
in turn positively influences brand e$uity. Increase in brand e$uity leads to an increase in the
value of the brand to the customers and also to the firm, which means the firm has an increased
bottom line now and can hence invest in more marketing activities. The idea that brand adds
value to products or services is fundamental to marketing. =ut even then marketers dry up when
faced with the task of measuring the extent of brand e$uity.It has been widely accepted that
brand e$uity is related to both technical capability and image (=atra, Eehmann and 2ingh, %&&.#.
However, Fntil the mid %&&/s there were remarkably few papers that addressed the measurement
of brand e$uity per se, though both brand e$uity and metrics were hot topics of discussion since
%&'/s. The first significant attempt to measure brand e$uity GGG as the added value from a brand
GGGG came when brands became important in the valuation of a company. The willingness of
companies to pay a premium while ac$uiring a brand led to a desire of having more robust
measures of a brands value and therefore of 8brand e$uity9. Initially the valuations were driven
by accounting re$uirements rather than by any demand for measurement that might improve
marketing investments. The obAective was to place a value for the brand rather than improving
the return on investment in marketing, 4appu et al. (.//6#
APPROACHES TO MEASURIN& BRANDIN& EQUITY
+xisting measures of brand e$uity generally fall into one of the three categories (:eller and
Eehmann, .//.#. )irst are the measures that focus on outcome at the product market level. The
most commonly measured unit is the price premium that the brand commands over a base
product (also known as private label products#. This approach has been analysed by "orris =.
Holbrook, (%&&%#, H. 2rinivasan, han 2u 4ark and 1ye !yun hung ("arch .//6# and others.
The second category of measurement focuses on the measures related to customer mindset, i.e.
the attitudes, associations and attachments that the customers have towards the brand. This
category of measurement has found focus both in the academic research (e.g. (mbler and
=arwise, %&&'# as well as measures provided by the suppliers such has !esearch Internationals
+$uity +ngine
2"
, Doung and !ubicams =rand (sset Haluator
I
, "illward =rowns =!(01@
T"
or the opernican (pproach of measuring brand e$uity.The final category of measurement is
based on the financial measurements. 2pecifically, these assess the value of a brand in terms of
financial assets. 4urchase price when a brand is sold or ac$uired ("ahaAan, !ao and 2rivastava,
%&&J# and discounted cash flow dimensions of licensing fees and royalties are measurement of
these type. 2imon and 2ullivan (%&&3#, measure brand e$uity based on the incremental cash
flow that accrue to branded products over and above the cash flow that result from the sales of
unbranded products. Thus this measure is the residual once other sources of firm value are
accounted for. Interbrands measure is basically a hybrid of product K market and financial K
market measures, starting basically with the revenue premium the brand enAoys and adAusting for
growth potential. The Interbrand method for ranking brands by brand value uses the
concept.2everal years ago, =oo;, (llen and Hamilton conducted a survey of companies who had
a varying degree of success in introduction of new products, to arrive at an understanding of
what is called the 7best practices GGG that is what differentiated companies that succeeded more
often than others in the new product development process (2usan 2chwat; "c1onald, )eb.
%&&/#. >ne point that stood out was that success in new product introduction is increasingly
associated with the expenditure of money in earlier developmental processes. (nd although there
are several ways to spend the money, the most obvious one is on a more deliberate examination
of the brand."icheal -. 2ilverstein in his book, reassure (Hunt< Into the mind of the new
consumer# says that 8In category after category, premium entries are growing, bargain brands are
stealing share, and the "iddle is shrinking.9 >r to place his observation in the marketing context<
brands that innovate are growing, while brands that do not innovate are transferring their e$uity
GGG and subse$uent long term income growth GGG to low cost manufacturers and discount retailers.
In the Indian context one can observe that with the planned entry of such giants like !eliance and
,alG"art in the retail sector of Indian economy, this is expected to be a familiar situation a few
years down the lane. This shrinking middle is where Indias well respected and well known
brands would find themselves a few years from now, unless they start investing on building
brand e$uity. The following section of the paper presents a discussion on the work done by
researchers on each of the above three categories of "easures of =rand +$uity.
Masu!s 'ocusin( on %) ou%com a% %) *!o#uc% ma!+% l,l
In this model of measurement, brand e$uity has been described to be synonymous with price
premium that is the willingness of the consumers to pay more for a brand than the other. 4rice
premia is a proxy for the elasticity of demand, which in turn is a measure of brand loyalty. Thus
price premium reflects the brands ability to command a price higher than its competitors. The
price premium construct is conse$uently important for all types of brands, despite actual price
position within a category. The price premium can either be negative or positive.
(ccording to a %&&6 branding study by management consultants :uc;marski and (ssociates
(1avid, %&&6#, B.L of the consumers will pay a ./L premium of their brand choice over their
closest competitors. To a substantial .6L price is inconse$uential if they are buying a branded
product that 7owns their loyalty. 2uch premium allows for a higher price points and profit
margins. 2euthermans study for grocery store in (merica, showed that for grocery stores,
between a national and a store brand, consumers are willing to pay almost 3/L more for national
brand over store brand (2eutherman, .//3#.The model assumes that each dimension of brand
e$uity should have an impact on the prices that consumers are willing to pay for the brand.
Hence, a dimension that has no impact on the price premium is no relevant indicator for brand
e$uity. The price premium does not fully correlate with actual consumer prices, since numerous
other factors influence the prices consumers have to pay in the store. Therefore, an actual
consumer price measure is not a satisfactory method to measure brand e$uity. 2rinivasan (%&B&#
defines brand e$uity (which he alls 7brand specific effects# as the component of overall
preference not measured by obAectively measured attributes. He estimates brand e$uity by
comparing actual choice behavior with those implied by utilities obtained through conAoint
analysis with product attributes, but no brand names. He christened the constant term in sales
response models as brand e$uity. His method avoids problem of unrealistic product profiles
mentioned reviously with the conAoint method, but has a limitation of providing at best segment
level estimates of brand e$uity.
Eike 2rinivasans approach, the :amakura K !ussel method has a limitation of offering at
best, a segment K level estimate of brand e$uity. )urthermore, the :amakura K !ussel method of
computing brand e$uity as residuals in a regression e$uation, tends to understate the actual
variation of e$uities across brands. )or example, if there were as many attributes as the number
of brands, all their brand e$uities would be ;ero. However, an important limitation of both these
approaches is that they do not break down the estimated e$uity into its components that can be
related to factors such as favorable biased perceptions. Thus empirical results based on these
methods will have somewhat limited managerial usefulness in terms of understanding the
sources of brand e$uity and suggesting directions for enhancing it.
1ubin (%&&'# had suggested a product K market K level measure of brand e$uity, which attempts
to $uantify the difference between the profit earned by the brand and the profit it would have
earned, if it were sold without the brand name. ,hile potentially less diagonistic, the method of
measurement has the advantage of being fairly unambiguous and credible to people outside the
marketing fraternity also. (ilawadi, Eehman and 0eslin (.//.# have taken the work of 1ubin
forward and have tried proposing a specific method of measuring brand e$uity.
Masu!s !la%# %o cus%om! min#s%
(ccording to this model, building a strong brand basically involves four steps< %# +stablishing
proper brand identity, i.e. establishing the breadth and depth of brand awareness? .# reating
appropriate brand meaning through strong, favorable and uni$ue brand associations? 3# eliciting
positive, accessible brand responses, and J# forging brand relationship with customers that are
characteri;ed by intense active loyalty. (chieving these four steps, in turn, involves establishing
six brand building blocks K brand salience, brand performance, brand imagery, brand Audgments,
brand feelings and brand resonance. >ne problem of this approach is that there is no metric to
translate customer ratings into estimates of profit for the company. (lso, like the price premium
techni$ue it excludes expected future brand related profits and fails to control for differences in
costs of producing branded products.
:evin Eane :eller (.//%# proposed the onsumer =ased =rand +$uity (==+# model, which
provides a yardstick by which the brands can assess their progress in their brand building efforts.
In addition, a critical application of the ==+ model is in planning, implementing and
interpreting brand strategies.
,hile reflecting a consumer or a marketing perspective, brand e$uity is referred to as onsumer
=ased =rand +$uity (==+#. "ackay et. (l (%&&B, p. %%63# stated that 7 the marketing approach
(also referred to as consumer based brand e$uity# refers to the added value of the brand to the
consumer. 2ubscribers to this approach refer to the value created by marketing activities as
perceived by the customers.
2everal researchers (e.g. rimmins, %&&.? )ar$uhar, %&'&# have argued in favor of a consumerG
based measurement of brand e$uity. 8(t#here is value to the investor, the manufacturer and
retailer only if there is value to the consumer.9 (obb ,algren et al, %&&6, p. .M#. 2everal brand
e$uity measurement methods have been suggested based on the marketing or consumer
perspective, both by researchers (e.g. (akar, %&&Mc? Creen and 2rinivasan, %&B', %&&/?
:amakura and !ussel, %&'&, %&&3? 2rinivasan, %&B&? 2wait et al, %&&3# and marketing
professionals and practicing firms (,inters, %&&%, for a list of the methods#.
obb G ,algren were the pioneering researchers to measure consumer based brand e$uity on the
conceptuali;ation of (akar (%&&%# and :eller (%&&3#. These researchers treated consumer based
brand e$uity as asset of four dimensions, vi;. brand awareness, brand associations, perceived
$uality and brand loyalty. 2inha et al (.///# and 2inha and 4appu (%&&'#, measured the
consumer based brand e$uity in a similar fashion, but used =ayesian model. Doo et al used
confirmatory factor analytic methods to measure consumer based brand e$uity. However, Doo et
al treated consumer based brand e$uity as a three dimensional construct, combining brand
association and brand awareness as one dimension.
Doo and 1onthu (.//%# were also the first to develop a multidimensional scale for consumer
based brand e$uity and test its psychometric properties. These researchers, however, observed
only three dimensions of consumer based brand e$uity, similar to Doo et al (.///#. Doo and
1onthus (.//%# consumer based brand e$uity scale was later validated by ,ashburn and 4lank
(.//.#.However, both Doo and 1onthu (.///# and ,ashburn and 4lank (.//.# have
acknowledged the scope to improve the method of easuring consumer based brand e$uity. )or
example, ,ashburn and 4lank have highlighted the need to refine the dimensionality of
consumer based brand e$uity. They also proposed researchers to focus on the distinction between
dimensions of brand association and awareness. ,hile these two dimensions are conceptually
different ((akar, %&&%#, some empirical evidence (Doo and 1onthu, .//%, .//.? Doo et al, .///?
,ashburn and 4lank, .//.# suggests that they should be combined to one. There is also
empirical evidence to suggest that these are two distinct dimensions of brand e$uity (e.g. 2inha
et al, .///? 2inha and 4appu, %&&'#, thus it is important to examine further the dimensionality of
consumer based brand e$uity construct. (nother suggested area for improvement in the research
of Doo and 1onthu (.//%# and ,ashburn and 4lank (.//.# is that both these research were based
on student samples. ,orks by 4appu, Nuester and ooksey (.//6# attempted to improve the
measure of consumer based brand e$uity, by including more discriminating indicators in the
scale and also by including a sample of actual nonGstudent consumers. To have a sample of actual
nonGstudent consumers both (merican and (ustralian consumer samples were considered for the
study.
"icheal Eeisure (.//3# in his work stated that the measure of customer loyalty has a distinct tie
to financial performance., in that loyal customers make repeat purchases of the brand of their
choice over the lifetime of their relationship with them. The ability of maintaining loyalty
translates to higher future profit per customers. The loyal customers coming back again and
again actually drives the market share up for any company over a period of time.
=rand :eys, a brand and customer loyalty research firm, demonstrated the power of customer
loyalty (%&&'#. They showed that an increase in customer loyalty by 6L, would in fact lift the
lifetime profits per customer by as much as %//L. The study also indicated that, in certain
businesses, increasing customer loyalty by Aust .L had the same bottom line e$uivalent as a %/L
cost reduction.
2usan 2chwart; "c1onald (%&&/# proposed to measure brand e$uity by the extendibility of the
brand. He opined that if consumers answer positively such $uestions, as 8,ould a line of 7O
products by company N make you think better of the company, less or have no effect, it is a
fairly strong indication that the e$uity of the brand is higher. =ut as per the researcher himself,
this is the 7thorniest issue of all types of consumer based brand e$uity measurement.
Two of the key measures relating to brand association and hence consumer based brand e$uity
are %# reating appropriate brand meaning through strong, favorable and uni$ue brand
associations? .# eliciting positive, accessible brand responses, hence the brand personality
inferences drawn by consumers are of paramount importance. C.H. -ohar et al (.//6# have tried
exploring the updating of brand personality inference and updating people who are chronic vs.
non chronic on a trait. hronics were defined as people who tend to activate and use specific
personality traits to a higher degree while nonGchronics are people for whom the trait is not
accessible. Their results suggested important differences in the way new brand information is
incorporated, even when similar initial personality impressions have been formed. The chronics
lowered their initial positive personality ratings only when they were exposed to information
containing negative trait associations. In contrast, nonGchronics receiving incoming information
updated their beliefs on the basis of an evaluative inference mechanism, whereby information is
examined for overall evaluative implications rather than for trait related inferences. This pattern
of results was robust across decision contexts, personality domains and different measures of
chronicity.=uilding on the ideas of information economics and market signaling theory, a formal
conceptual framework for explaining the creation, management, transfer and easurement of
brand e$uity has been proposed by +rdem and Eouviere ("arch %&&3#. This is the first step in
the operationalisation of the framework and was done by developing a method for measuring
brand e$uity built upon a theory of consumer behavior. 2pecifically designed choice
experiments, accounting for brand name, product attributes, brand image and consumer
heterogeneity effects are proposed as the method for $uantifying a brand e$uity measure called
the +$uali;ation 4rice (+4#. Civen an existing market structure, rand images built over time by
advertising and product experiences, consumer brand perception and preferences, +4 is a
measure of the implicit value to the individual customer of a brand in a market where some
degree of differentiation exists visGPGvis its implicit value in a market with no brand
differentiation. The proposed measure can be used for both existing products and proposed brand
name extensions, so it can double as a product conceptGscreening tool.
Masu!s !la%in( %o 'inancial masu!mn%
It has long been recogni;ed that brand names are valuable to companies, and only recently erious
attempts have been made to estimate their value ()ar$uhar %&'&, Eipman %&'&#.The current
interest in brand valuation stems from the escalating costs of developing new brands, leading to
prevalent usage of brand extension and international expansion (Tauber %&''#. However,
increasingly, marketing managers of today believe that too much emphasis is being placed on
shortGterm performance, which can reduce the long term performance of brand (Eeuthesser,
%&''#.(nother method of estimating the brand e$uity of a firm is derived from financial market
estimates of brand related profits. 0umerous methods are currently in use, but there is little
agreement as to their relative strengths and weaknesses (Eipman, %&'&#. There are two specific
approaches to the same< the macro approach estimates brand e$uity at the firm level. This
estimate of brand e$uity is of interest because they allow a firm to compare the effectiveness of
its portfolio of marketing policies to others in the industry. =ut one drawback of this approach is
that it does not provide estimates of brand e$uity at individual brand level.
The micro approach isolates the brand e$uity at individual brand level by measuring the response
of brand e$uity to maAor marketing decisions. 2ince the value of a firms securities changes as
new information hits the market, the estimate of firm level brand e$uity adapts to marketing
decisions, like new product introduction and maAor advertising campaigns. This approach allows
evaluation of the impact of specific marketing decisions made by the firm and its competitors.
>ne drawback of this method is that the stock market data are noisy, so only maAor events would
have a sufficiently large impact on brand e$uity to be detected. In addition, this process re$uires
knowledge as to when stock market first learnt of the decision.
(n approach, developed by "ahaAan et al. (%&&/#, measures brand e$uity under the conditions of
ac$uisition and divestment. Their methodology is based on the premise that brand e$uity is
dependent on the ability of the owning company to utili;e brand assets. (n alternative approach
deals with the brand replacement cost, which is the cost of establishing product with a new brand
name. )or example if it costs !s. %/ crores to launch a new product and the probability of
success is .6L, then the expected cost of establishing a new brand name is !s. J/ crores. Thus,
this approach measures only one component of brand e$uity GGG its value in launching new
products. The method, however, provides no information about the value of a brands e$uity in
its current usage from existing products.
There can be another approach financially to Audge a brands e$uity and it is based on brand K
earnings multiplier. >ne techni$ue multiplies the brands 8weights9 by the average of the past
three years profits (Interbrand Croup#. The brand weights are based on both historical data, such
as brand share and advertising expenses, and individuals Audgment of other factors, like stability
of product category, brand stability and its internationality. This techni$ue, however, produces
biased and inconsistent estimates of brand e$uity due to its usage of historical data, which do not
accurately translate to future earnings. )urthermore, reliance on individuals Audgment makes it
difficult to apply the techni$ue consistently in different time periods or across different
companies.
The techni$ue proposed for measurement of brand e$uity by 2imon and 2ullivan (%&&3#,
overcomes several limitations inherent in other approaches. )irst, it uses obAective market based
measures and thus permits comparison across times and companies. 2econd, it implicitly
incorporates the effect of market si;e and growth, and any other factor influencing future
profitability. Third, it accounts for both the revenue enhancing and cost reducing capabilities of
brand e$uity. 2imon and 2ullivan have defined brand e$uity as the incremental cash flow that
accrues to the branded products over and above the cash flows resulting from the sales of
unbranded products. The significance of the coefficients in macro analysis and the response of
brand e$uity in microanalysis through this methodology show that marketing factors have a
reflection in stock prices. The maAor limitation of this method is that the approach estimates the
aggregate value of corporate brand and not the value of individual brands.
In its ranking of the best global brands by brand value, a consulting company, Interbrand, has
identified the revenue generated from products and services with the brand. )rom these branded
revenues, operating costs, applicable taxes and a charge for capital employed to derive intangible
earnings are deducted. =rand values are defined as the dollar value of a brand calculated as the
0et 4resent Halue (04H# or todays value of the earnings the brand is expected to generate in the
future. The brand value is calculated in their current use to their current owner. This is also a
logical approach as it rewards the intangible assets after the tangible assets have received their
re$uired return.
CONC-USION
reating strong brand e$uity, that is, building a strong brand is a very successful strategy for
differentiating a product from its competing brands ((akar, %&&%#. =rand e$uity provides
sustainable competitive advantages as it creates meaningful competitive barriers. =rand e$uity is
developed through enhanced perceived $uality, brand loyalty and brand awareness * associations,
which cannot be built or destroyed in the short run but can be created in the long run through
carefully designed marketing investments. Thus brand e$uity is durable and sustainable and a
product with sustainable brand e$uity is a very valuable asset to a firm.
)or a marketing manager, it is imperative to know how much e$uity his * her brand commands in
the market. This helps him take decisions like how much price premium he can charge over his
competitors and how premium the customers feel the brand is to them. To be useful any measure
needs several properties. It needs to be reasonably stable over time and yet vary with the
marketing mix variables in a reasonably expected way. It should also vary across product
categories in a sensible way. )inally, since e$uity is expected to insulate a brand from price
competition, e$uity should be associated with price sensitivity. The maAor discussions in this
study relate to the different broad heads under which studies were initiated to measure brand
e$uity of products. >n the outcome at a product market level brand e$uity is measured as the
price premium commanded by the brand over its competitors or the ease of extendibility of the
brand name to other products in the same category or different category of products. ,ith respect
to the measures relating to the customer mindset, brand e$uity is the added value of the brand to
the consumers. (s regards the measurements relating to different financial methods, brand
e$uity may be measured with respect to ac$uisition and divestment, the cost involved of
establishing a product with a new brand name, the brand earnings multiplier or the potential of
incremental cash flow that the brand offers to the company.
( onclusion that may be drawn from the review of =rand +$uity "easures presented above is
that there is need for more research on certain aspects of the topic. )or example, brand e$uity
varies from product to product as also from country to country (Eee, Doo and 1onthu, .///#.
Hence measuring brand e$uity in a product category like automobile and then replicating the
results to a consumer durable product like a refrigerator may not be the right approach. "any of
the researches that have been undertaken have used a single measure of brand awareness (4appu,
Nuester and ooksey, .//6#. The same can be a hindrance because confirmatory factor analysis
re$uires a minimum of three indicator variables for each exogenous construct. "ultiple measures
of brand awareness is thus another area that needs to be studied. (gain, brand e$uity is
dependent on the distribution model a company follows as also the dimensions of brand e$uity
(1onna ). 1avies, .//3#. =rand e$uity measurements in one product category and country thus
would vary from another. Hence, caution should be exercised in replicating one set of findings to
another study. In some cases, while measuring brand e$uity, researchers have considered the last
brand purchased as the brand with which the customer have the maximum e$uity (the choice
model, 4ark and 2rinivasan, %&&J#. In many cases, this may not be the best model to work with
as customers may choose a brand that was available in the store. In such cases, survey and
scanner panel data from the same respondents can solve the problem, but doing so have proven
impossible in many situations (=ucklin and 2rinivasan, %&&%#. 4articularly in the Indian context,
it would be interesting to measure the strength of the =rand e$uity of mass merchandisers as they
are growing fast in the country. Civen the fact, that spending on =rand =uilding activities is fast
increasing in the country, it would indeed be of value to find answers to the above $ueries.
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%& (akar, 1avid (. (%&&%#, Measuring !rand equity. 'ew (ork, '.(. ) *ree Press
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Su""ary of article in MS conference in 9ustin, Te#as, 0March&
1+& ambridge "ass < Marketing Science nstitute, 5eport 'o. ==4%<7
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17& "ahaAan, HiAay, Hithala !. !ao, and !aAendra :.2rivastava (%&&J&, ,9n approach to
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1/& "orris =. Holbrook, Marketing ;etters 1)%, 0%@@+&, 3%4=1, Cluwer 9cade"ic Pu!lishers,
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1=& "ahaAan HiAay, Hithala !ao and !aAendra 2rivastava (%&&/#, ,Bevelop"ent, testing and
validation of !rand equity under conditions of acquisition and divest"ent,- MS
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equity to grow your !rand and !usiness, nteractive Marketing, 6ol. /, 'o. %, pp. 11 8 1@
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7%& 4. handon, 'ote on "easure"ent of !rand awareness, !rand i"age, !rand equity and
!rand value, P. :handon, 'SE9B, March +<<1
7+& 4assikoff, !. (%&&'#, Brand Ceys custo"er loyalty inde#, 'ew (ork, www.!randkeys.co"
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i"proving "easure"ent 8 e"pirical evidence, .. of product and !rand "anage"ent,
%7>1, 0+<</&, %71 4 %/7
77& !atchford =rian T., 0%@3/&, ,The new econo"ic theory of consu"er !ehavior ) 9n
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9M9 Educators Proceedings, 9"erican Marketing 9ssociation, :hicago, ;, 9ug., pp
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73& 2usan 2chwart; "c1onald, ()eb. %&&/#, ,Brand Equity ) Aorking towards a disciplined
"ethodology of "easure"ent,- Presentation delivered at the +
nd
annual advertising
research foundation, 9dvertising and Pro"otion Aorkshop, *e!. %@@<, '()'(
7=& 2inha (. and 4appu !., (%&&'#, ,Parceling of the su! co"ponents of consu"er !ased
!rand equity using factorial survey) 9n e"pirical investigation in the 'ew Jealand
consu"er electronics sector-, Proceedings ) 9ustralia 'ew Jealand Marketing 9cade"y
:onference, Fniversity of $tago, Bunedin, Bece"!er, pp. +7114=.
7@& 2usan 2chwart; "c1onald, Brand Equity ) Aorking towards a disciplined "ethodology
for "easure"ent, Presentation delivered at the +
nd
9nnual 9dvertising 5esearch
*oundation 9dvertising and Pro"otion Aorkshop 0*e!ruary, %@@<K '(, '(&
/<& 2rinivasan H. (%&B&#, ,'etwork "odels for esti"ating !rand specific effects in "ulti4
attri!ute "arketing "odels-, Manage"ent Science, +/, 0.anuary&, %%4+%
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/+& 2eutherman !., .//3, 5eview of Marketing Science, 6ol. %, 'o.%
/1& 2hocker, (llan 1., !aAendra :. 2rivastava and !obert ,. !eukert, %@@7, :hallenges and
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Marketing 5esearch, 1%, 0May&, %7@ 8 %/=
/7& Tauber, +dward "., Brand ;everage ) Strategy for growth in a cost controlled world, ..
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research in "arketing, 6ol. %<, ssue %, pp. +1 8 7/
/3& Tauber +dward ". (%&''#, ,Brand ;everage ) Strategy for growth in a cost controlled
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analysis and prediction of !rand equity and its sources,- March +<</, 5esearch Paper
'o. %2=/ 05+&, Stanford ?raduate School of Business.
/@& H. 2rinivasan, han 2u 4ark and 1ae !yun hang, Paper 'o. %2=/, 05 +&, Stanford
?raduate School of Business, March +<</.
2<& H. 2rinivasan, han 2u 4ark and 1ye !yun hang, ,9n approach to the "easure"ent,
analysis and prediction of !rand equity and its sources-, March +<</.
2%& H. 2rinivasan (%&B&#, ,'etwork "odels for esti"ating !rand specific effects in "ulti4
attri!ute "arketing "odels.-, Manage"ent Science, +/ 0.anuary&, %%4+%.
2+& www.!randchannel.co", ,Ahen co"panies run out of ides, !ad things happen to the
!rand-, Tom (sacker
21& ,ashburn -.H. and 4lank !.+., (.//.#, ,Measuring !rand equity) 9n evaluation of a
consu"er !ased !rand equity scale-, .. of Marketing Theory and Practice, 6ol. %<, 'o.
%, pp. 7242+
27& Doo =. and 1onthu 0. (.//.#, ,Testing cross cultural invariance of !rand equity
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2/& @eithamal H.(., :onsu"er perception on price, quality and value ) 9 "eans end "odel
and synthesis of evidence, .uly %@==