This document discusses definitions and models of brand equity. It provides 4 key dimensions of brand equity definitions: brand presence in consumers' minds, influence on buying behavior, effects on market position and financial results, and financial value as an intangible asset. It also describes Franzen's model of mental, behavioral, and financial brand equity. Mental brand equity includes brand awareness, meaning, positioning, quality/price assessment, attitudes, and brand relationships. Several models for measuring brand equity are also summarized.

1. Brand equity

2. Definitions
 “Brand equity is the set of brand assets and liabilities linked to the
brand, its name, and symbol, that adds or subtracts value to a product
or service for a firm/ or its customers” (David Aaker).
 “Brand equity is the set of associations that permits the brand to earn
greater volume than it would without the brand name” (Marketing
Science Institute).
 “Brand equity is everything the customer walks into the store with”
(Peter Farquhar).
 “A set of associations which are most strongly linked to a brand name”
(Andrea Dunham).
(source: Franzen, 1999)

3. Overall…
Franzen (1999): 4 principle dimensions within brand
equity definitions:
 Presence of a brand in consumers mind
 Influence on their buying behaviour
 Effects on brands market position and financial result
 Financial value of the brand as a immaterial assets
of the company

4. The concept of brand equity
Brand Equity
Mental Brand
Equity
Behavioural Brand
Equity
Financial/Economical
Brand Equity
(Franzen, 1999)
Mental Brand
response
Brand behavioural
response
Market response

5. Mental Brand Equity
1. Brand awareness
2. Defining brand meaning
3. Brand positioning
4. Price/ quality assessment
5. Overall evaluation/ attitudes
6. Buying behaviour tendency
7. Brand relationship

6. 1. Brand awareness
“The strength of a brand’s presence in the consumer’s mind” (Aaker, 1996)
Broken down into 3 parts:
 First mentioned brand – as strong brands should be at the front of the
memory and come up spontaneously when thinking about a category
TOMA (=top of mind awareness)
 Spontaneous brand awareness -Expression of total presence of brand
e.g. of a brand category “toothpaste” in consumers’ mind and
behaviour. These brand were bought and will be bought in future part
of the consideration set
 Aided brand awareness – e.g. brand recognition from a list. Only
marginal influence in choice behaviour. These brands are not part of
consideration set.
(Franzen, 1999)

7. 2. Brand meaning
 Brand signals - visual, auditive, olfactory, taste and tactile
characteristics
 Origin – e.g. stereotypical associations to country or region
 Company/ maker ‘endorsement -’ vs ‘driver brands’ (Aaker,
1996)
 Functional meaning – functional vs. symbolic meaning
 Situational meanings – associations and moments of
consumption of a particular brand
 Symbolic meaning – allocation of human attributes to brands:
brand personality (Aaker 1997, later on) & brand values
 Price
 Quality
 Presentation & Advertising

8. Brand personality
Brand Personality Scale
(BPS)
Variance Explained Traits Brand
Sincerity 26.5% Domestic, honest, genuine,
cheerful
Campbell’s, Hallmark,
Kodak
Excitement 25.1% Daring, spirited, imaginative,
up-to-date
Porsche, Absolut,
Benetton
Competence 17.5% Reliable, responsible,
dependable, efficient
Amex, CNN, IBM
Sophistication 11.9% Glamorous, pretentious,
charming, romantic
Lexus, Mercedes,
Revlon
Ruggedness 8.8% Tough, strong, outdoorsy,
rugged
Levi’s, Malboro, Nike
(Aaker, 1997)

9. 3. Brand positioning
 Brands and their relation towards competing brands are stored
in unique position in consumers brain. (e.g. GAP is more
expensive than H&M)
 When evaluating and comparing brands consumers classify
them in groups or subgroups on the basis of the most common
attributes or most characteristic differences (Franzen &
Bouwman 2001).
 Classical categorisation theories:
Concepts are organised into hierarchies in long-term memory.
Hierarchical structures have horizontal and vertical dimensions.
Vertical dimension represents various levels from general to specific:
from category to subcategory to sub-subcategory…
Horizontal dimension represents characteristics differences between
groups at the same level.
Brands are placed in categories and subcategories on the basis of
product or product or product variants.

10. …
 Prototype Approach:
This approach is widely accepted in psychology as alternative
of a strict hierarchical structure of knowledge in long-term
memory. For each category there is a Prototype entity – the
most original and most representative example.
In many product fields there are such prototypical brands
e.g. facial tissue: Kleenex (1924)
detergent: Persil (1909)
Therefore, brands within a category are arranged by the extend
to which they are representative for the category in relation to
the prototype.

11. Critique & Exploitations of Brand
Positioning
A) Extensions and brand elasticity
 Launching brand extensions often means to exploit
the already existing brand position in the consumers
brain, hence the market (e.g. Virgin)
 However, extensions have their limits, often refereed
to as brand elasticity (Howard & Matter, 1997).
 Two key issues in brand elasticity which determine
the ‘ consumers breaking point’ or trust in an
extension were proximity and functionality.

12. …
B) Concept brands vs. product brands
 Lately it is discussed that brands no longer form the basis for brand
positioning. It is assumed that brands are no longer characterised on
the basis of its products or product variants to which they are
connected to, rather in terms of their concept.
“Concept brands distinguish themselves from classical ‘product
brands’ because they do not claim any intrinsic qualities,
improvements, apparent improvements or added value, but bring a
body of thoughts, a vision, a world into the market” Rijkenberg (1998).
 E.g. “Levi-like” the roots of Levi’s brand: denim, jeans, sex & rebellion
were reintroduced after red figures in 1980s. From than on all
products were tested against these core values.

13. 4. Quality & Price assessment
Perceived quality:
 A relative concept that occurs mainly in a competitive setting.
perceived quality of Audi compared to Fiat.
 Category dependent, brand A might be better in one
subcategory but not in another.
 Situational variables: physical and social surrounding of usage
 Based on quality cues e.g. packaging
 Partly determined by “meeting users’ expectations”
 Relevance: strong correlation between perceived relative
quality and a) return on sales, b) return on investment. Thus, it
is an important variable affecting companies’ profitability.
(Buzzel & Gale 1987)
Price assessment
 Perception of relative prize affects consumer’s decisions about
including brands in their consideration set or not.

14. 5. Brand attitudes/ Overall evaluation
 The importance of brand attitudes is based on the predictive
power of attitudes on intention and intention on behavior
(Fishbein & Ajzen 1975, Van der Pilgt & De Vries 1991)
 However, an important implication was that when measuring
attitudes to predict behaviour these must conform the principle
of correspondence (action, goal, context, time)
 High correlations in many product categories between
consideration scores (attitudes) and brand’s sales (Dyson et al.
1996, Millward Brown)
 For this reason estimates of brand equity and its course could
be obtained by segmenting its users according to their relative
strength of attitudes towards alternative, hence competitive
brands (see Conversion Model by Hofmeyr, 1990)

15. 6. Buying behaviour tendency
 When considering low involvement products many purchases
are rather automated, habitual.
 Once acquired and given a specific stimulus situation
automatic, non-conscious processes will be performed (Bargh,
1997).
 Thus, a clear distinction between intentional conscious decision
making and automatically performed ‘acquired tendencies’.
These acquired purchasing habits are fundamental
components of brand networks in our memory.
 Consequently, research must distinguish between prediction of
brand purchasing behaviour by means of attitude & intention
and past behaviour in form of acquired tendencies & habits.

16. 7. Brand Relation
 Definition:
“Relationship between a person and a brand as a voluntary or
imposed mutual dependency that is characterised by a unique
history of interactions and the anticipation of common events in
the future, which has its goals helping to reach the
instrumental- and/or social–psychological goals of the partners,
and which is characterised by a strengthening emotional bond”
(Fournier, 1994).
Purpose for consumer (Langer, 1997):
 Practical role – habit & convenience
 Emotional role – identification & self-expression
 Social Role – communication of who you are

17. Conversion Model (Hofmeyer, 1990)
 Segmentation of users within a category according to relative
strength of their attitudes towards alternative brands.
 Establishes strength of consumer preferences in each brand
compared with brand use.
 Uses 4 types of questions:
1. Assessment – overall assessment of brand on 7-point scale
(‘cold’ – ‘hot’ corresponding emotional distance)
2. Satisfaction of needs – satisfaction with the brand on 10 –
point scale (‘very dissatisfies’ – ‘perfectly satisfied in every
respect’
3. Importance – measures of involvement with product category
4. Movement – measurement of inclination to change, whether
reasons for brand loyalty prevail over reason for change brand

18. Conversion Model
Entrenched users
users who are not available for
conversion, remain loyal
Available consumers
non-users who prefer the brand in
question to their current choice
Average users
secure users who are not available for
conversion, committed to the brand
Ambivalent consumers
non-users equally attracted to the brand
in question and current choice
Shallow users
beginning to show sign of wavering,
loyalty below average, starting to consider
other brands
Weakly unavailable consumers
non-users whose preference lies with
their current brand, but not strongly
Convertible users
on the threshold for leaving the brand
Strongly unavailable consumers
non-users who have strong preference
for their current brand
Secure users
Vulnerable users
Open non-users
Unavailable non-users

19. Millward Brown’s
‘Brand Dynamics Pyramid’
 Using a consumer brand equity tool
‘Consumer Value Model’ in 35
countries, 175 product categories
and 17.000 brands used to
construct a hierarchy of brand
equity – Brand Dynamics Pyramid.
 Using this model a Market leader
brand was described as:
Bonded: 26%
Advantage: 53%
Performance: 57%
Relevance: 61%
Presence: 88%

20. Young & Rubicam’s
Brand Asset Valuator
 Procedure: Phone-Interview (brand awareness) + written
questionnaire
(32 items on current brand use, buying intentions, Cultural
Consumer Characteristics Tool & socio-demographics)
 From data on 8.500 brands in 24 countries developed brand
equity hierarchy.
I. Differentiation: perceived distinctiveness
II. Relevance: assessment of suitability by consumer
III. Appreciation: How popular is the brand? How high is its
quality?
IV. Knowledge: brand awareness, knowledge of the brands core
meanings & feeling of knowing the brand very well.