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Brand phase 11
 

Brand phase 11

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    Brand phase 11 Brand phase 11 Document Transcript

    • Theoretical of BrandingBrand is the image that consumers have in mind (Aaker, 1991). It is also theunique characteristics that have been developed all the time in order todifferentiate actual products from the competitors (Murphy, 1990). In addition,The American Association defines a brand as “a name, term, sign, symbol ordesign, or a combination of them intended to identify the goods or services ofone seller or group of sellers and to differentiate them from those ofcompetitors. “A brand is thus a product or service that adds dimensions thatdifferentiate it in some way from other products or services designed to satisfythe same need. These differences may be functional, rational, or emotional orintangible related to what the brand represents. Brand concepts must addresscustomer interests and lifestyles. Factors that affect its brand image andbrand perception among marketing communication program thatimplementing to the public to create brand perception, brand characteristic,brand image and brand equity.Brand EquityBrand equity is the added value endowed to products and services. Aaker(1991) defined the brand equity as a set of brand assts and liabilities linked tobrand that adds or detracts the product or service value based on thecustomers perspectives. This value may be reflected in how consumers think,feel and act with respect to the brand that consumers had perceive frommarketing programs. Brand equity is an important intangible asset that haspsychological and financial value to the firm. The value of brand equitydepends on the number of same people who buy regularly (Aaker, 1996). Thebrand loyalty, brand awareness, and brand perceived quality are necessary tomaintain the brand equity (Motameni & Shahrokhi, 1998). There are twodifferent perspectives of brand equity; financial and customer based. The firstperspective evaluates the asset value of a brand name that creates to thebusiness (Farquhar et al, 1991). Brand equity increased the discounted futurecash flows and revenue comparing to the same product did not have thebrand name (Motameni & Shahrkhi, 1998).According to the second perspective, the premise of customer-based brandequity models is that the power of brand lies in what customers haveresponded, seen, read, heard, learned, thought and felt about the brand overtime. In other words, the power of brand lies in the minds of existing orpotential customers and what they have experienced directly and indirectlyabout the brand. The customer-based brand equity finally drives the financialreturn to the company (Lassar et al, 1995). The valuation of brand has beenstudied for different approaches, for example, marketing, premium pricingmarket value, customer factors, replacement cost perspective. According tothe valuation based on consumer factors, the measurement of customers’preference and attitude can be used to valuate the brand equity (Aaker, 1991and Kapferer, 1992).Brand PerceptionBrand perception is consumers’ ability to identify the brand under differentconditions, as reflected by their brand recognition or recall performance(Kotler & Lane, 2006). Brand recall refers to consumer’s ability to retrieve thebrand from the memory (Keller, 1993). According to the improvement ofmeasurement for brand equity, consumer-based brand equity was describedfor four dimensions; brand awareness, brand association, perceived quality,
    • and brand loyalty (Pappu, et al, 2005). Brand awareness was defined as theconsumers’ ability to identify or recognize the brand (Rossiter and Percy,1987). It refers to the strength of a brand presence in consumer’s minds.Brand awareness has several levels starting from the less recognition of thebrand to dominance (Aaker, 1991). Perceived quality was evaluated anddecided by consumers. Perceived quality is another valuation of brand topush the customer to buy products.Brand building has been around for centuries as a means to distinguish thegoods of one producer from those of another. The earliest signs of brandingin Europe were the medieval guilds’ requirement that craftspeople puttrademarks on their products to protect themselves and consumers againstinferior quality. In the fine arts, branding began with artists signing their works.Brands today play a number of important roles that improve consumers’ livesand enhance the financial value of firms (Kotler & Lane, 2006). Brandawareness and brand perceived quality as the significant factors to createand maintain brand equity. There are positive relationship among brandawareness, perceive quality and brand equity (Aker, 1996, Buzzell & Gate,1987). The marketing program has effect to improve the perceive quality ofbrand for different customers.Brand PerceptionBrand perception is consumers’ ability to identify the brand under differentconditions, as reflected by their brand recognition or recall performance(Kotler & Lane, 2006). Brand recall refers to consumer’s ability to retrieve thebrand from the memory (Keller, 1993). According to the improvement ofmeasurement for brand equity, consumer-based brand equity was describedfor four dimensions; brand awareness, brand association, perceived quality,and brand loyalty (Pappu, et al, 2005). Brand awareness was defined as theconsumers’ ability to identify or recognize the brand (Rossiter and Percy,1987). It refers to the strength of a brand presence in consumer’s minds.Brand awareness has several levels starting from the less recognition of thebrand to dominance (Aaker, 1991). Perceived quality was evaluated anddecided by consumers. Perceived quality is another valuation of brand topush the customer to buy products.Brand building has been around for centuries as a means to distinguish thegoods of one producer from those of another. The earliest signs of brandingin Europe were the medieval guilds’ requirement that craftspeople puttrademarks on their products to protect themselves and consumers againstinferior quality. In the fine arts, branding began with artists signing their works.Brands today play a number of important roles that improve consumers’ livesand enhance the financial value of firms (Kotler & Lane, 2006). Brandawareness and brand perceived quality as the significant factors to createand maintain brand equity. There are positive relationship among brandawareness, perceive quality and brand equity (Aker, 1996, Buzzell & Gate,1987). The marketing program has effect to improve the perceive quality ofbrand for different customers.1.2 Brand Value CreationTo explain the phenomena of brand equity, Keller and Lehmann (2003) developedthe brand value chain (BVC) model. It theoretically explains how brand related2investments affect firm financial value by changing customer mindsets and subsequent
    • market performance. Brand value creation begins with the firm’s investment in marketingprograms such as product research, development, trade support, marketingcommunication, advertising, promotion, etc. These marketing activities affect theconsumer mindset with regard to the evaluation of the brand. The consumer mindsetconsists of multi-dimensional attributes, including brand awareness, associations,attitudes, attachment, activities and experiences. The consumer mindset determines howconsumers act in the marketplace. The outcome of these actions are reflected in marketperformance indicators such as price premiums, reduced price elasticities, increasedmarket share, brand expansion into other categories, etc. Based on the brand’s marketperformance, the financial market makes assessments and adjustments to reflect the valueof the brand. Some important financial metrics are the stock price, price-earning ratio, theoverall market capitalization of the firm that owns the brand, etc. (Ambler et. al. 2002).1.3 Three Levels of Brand Equity MeasuresThe extant literature has proposed brand equity measures at three levels:individual, product and firm. One approach is to measure consumer’s state of mind withregard to a brand, i.e. consumer-based brand equity (CBBE). This family of mindsetmeasures includes awareness, attitude, attachments, associations, loyalty toward a brand,etc. (e.g., Aaker 1991, 1996; Ambler and Barwise 1998; Keller 1993; Keller andLehmann 2001). These measures demonstrate the basic underlying dimensions of brandequity. They have good diagnostic power by signaling the change of a brand’s value andproviding the reasons for the change (Ailawadi, Lehmann, and Neslin 2003).3Another approach involves measuring product level outcomes. These measures ofbrand equity include loyalty, price premium, market share, revenue, net profit, etc. (e.g.,Ailawadi, Lehmann, and Neslin 2003; Agarwal and Rao 1996; Chaudhuri and Holbrook2001; Dubin 1998). Since these metrics can be obtained and computed through salesinformation, they maintain the desirable features of being accessible and objective.Moreover, because these measures are closely related to financial returns, they provide avaluable reference for brand valuation.Finally, some researchers focus on firm financial returns associated with a brand.These measures involve the consideration of discounted future cash flows or projectedfuture earnings associated with a brand (e.g., Birkin 1994; Mahajan, Rao, Srivastava1994; Simon and Sullivan 1993). Because this approach puts a brand’s future potentialinto the formula, it treats brand as a long-term intangible financial asset.SourcesAaker, D.A. 1991. Managing Brand Equity: Capitalizing on the Value of aBrand Name, The Free Press New York, NY.Aaker, D.A. 1996. Measuring brand equity across product and markets,California Management Review, Vol. 38, Spring, No. 3, pp. 102-20.Keller, K.L. 1993. Conceptualizing, measuring , and managing customerbasedbrand equity, Journal of Marketing, Vol 57 No.1, pp.1-22.Murphy, J. 1990. Assessing the value of brands, Long Range Planning, Vol.23 No. 3, pp.23-9.
    • Keller, Kevin L. and Donald R. Lehmann (2003), “How Do Brand Create Value,”Marketing Management, 2003 (May), (26-31).