Chalermporn Kiratiprasert 6149047

Brand Equity
Compare and contrast different perspectives of brand equity and its components

Aaker (1991) conceptualized brand equity as a set of brand assets and liabilities linked to a
brand, its name and symbol that add to or subtract from the value provided by a product or
service to a firm and/or to that firm’s customers. Definition by Keller (1993) focused on
marketing; he described brand equity as “the differential effect of brand knowledge on consumer
response to the marketing of the brand”.

Aaker’s brand equity model

1
 Chalermporn Kiratiprasert 6149047

Keller’s brand equity pyramid

Considering the dimensions of brand equity described above, both Aaker’s and Keller’s views
are very customer oriented and emphasize the importance of brand awareness and associations.
Despite this commonality, some important differences exist. The primary difference is that the
customer-based brand equity framework of Keller is based on a more detailed conceptual
foundation. A much stronger focus on consumers and their brand knowledge structures can be
seen in customer-based brand equity model when compared to Aaker’s model. In spite of the
differences Aaker’s model seems to complement customer-based brand equity quite well,
because it takes the perceived quality aspect into account. When considering the benefits of
brand equity, the opinions of Aaker and Keller concerning this topic are very similar. The
difference is the accuracy of details. Aaker is the one who classified customer’s and firm’s
benefits of brand equity. Both Aaker and Keller give advices to build brand equity. Aaker
outlines general guidance for each dimension of brand equity, while Keller suggests a four step
process of building strong equity. Both authors suggest clear advices for building brand equity,
but the concept of Keller is more detailed and therefore perhaps more useful. Nevertheless, both
outlined the need to understand how customers respond to the brands and its marketing activity
so as brand building strategies can develop into the desired direction.

Based on financial perspective (Financial- based brand equity), brand equity was viewed as a
method that gave managers guidance in understanding brand enhancement. In this perspective,
the measures focused on stock prices or brand replacement (Myers, 2003). Simon and Sullivan
(1993) defined brand equity as “the incremental cash flows which accrue to branded products
over and above the cash flows which would result from the sale of unbranded products”.
Supporters of the financial perspective (FBBE) define brand equity as the “total value of a brand

2
 Chalermporn Kiratiprasert 6149047

which is a separable asset – when it is sold or included in a balance sheet” (Atilgan et al., 2005).
Wood (2000) discussed that from a financial perspective it is possible to give a monetary value
to the brand that can be useful for managers in case of merger, acquisition or divestiture.
Estimating a financial value for the brand is certainly useful but it does not help marketers to
understand the process of building brand equity. Wood (2000) believes that marketing
perspective of brand equity can help marketers to understand the brand in the minds of customers
and to design effective marketing programs to build the brand.

2.2. Customer perspective (Customer-based brand equity)

Extant literature on brand equity has focused on the perspective of cognitive psychology
(Christodoulides and de Chernatony, 2010) known as consumer-based brand equity. The
customer-based brand equity (CBBE) approach is the dominant perspective and the one preferred
by a majority of academics and practitioners in marketing research because if a brand has no
meaning or value to the consumer it is ultimately meaningless to investors, manufacturers, or
retailers (Cobb-Walgren et al., 1995). Motameni (1998) also mentioned this perspective as a
marketing perspective. He used the concept of brand equity in the context of marketing decision-
making. Keller (1993) used the term consumer-based brand equity to refer to brand equity and
noted that customer-based brand equity occurs when the consumer is familiar with the brand and
holds some favourable, strong and unique brand associations in their memory. Positive customer-
based brand equity has many advantages like long term revenues, customers’ willingness to seek
out for themselves new channels of distribution, the ability of firms to command higher prices
and the effectiveness of marketing communications (Keller, 2003). Several scholars (e.g. Cobb-
Walgren et al, 1995; Yoo and Donthu, 2001) have theorized brand equity similar to Aaker
(1991). Although Aaker (1991) and Keller (1993) conceptualized brand equity in a different
way, both defined brand equity from customer perspective. Szőcs (2012) mentioned that
Consumer-based brand equity is referred in literature as a decision support tool that sets up a
useful diagnosis for the managers about the ideas consumers have about the brand. Consumer-
based brand equity can be best formulated as a construct caused by brand-related associations in
which the effect of brand-related associations is concentrated. In order to be able to make
recommendations to managers on how to manage their brand equity or study the nomological
network of its constituent components, we need to generate a better understanding of the
composition of brand equity in disparate cultural contexts and distinct product categories
(Christodoulides at el, 2015).

2.3. Employee perspective (Employee-based brand equity)

Youngbum Kwon (2013) discussed that the definitions of Employee-based brand equity and
Customer-based brand equity are similar in respect that they are both values that come from the
innate nature of the brand. Employee-based brand equity is defined from the employee
perspective and is based on the differential effect that brand knowledge has on an employee’s
response to his or her work environments and cultures (King and Grace, 2009).Youngbum Kwon

3
 Chalermporn Kiratiprasert 6149047

(2013) presented a three dimension model based on King and Grace (2009, 2010) and Aaker
(1991) research.

Choose a brand and illustrate how it has developed its brand equity

A strong brand is one that possesses high brand equity. The point to strong evidence that brand
equity is considered a key factor that can bring to the company: higher profits, brand extension
opportunities, protection against competitors. Brand equity can be defined as “the tangible and
intangible value that a brand provides positively or negatively to an organization, its products, its
services, and its bottom-line derived from consumer knowledge, perceptions, and experiences
with the brand” (Gunelius, n.d.).

"What you wear is how you present yourself to the world, especially today, when human
contacts

are so quick. Fashion is instant language." Miuccia Prada

“Creativity and quality design together with a rapid response to market demands”

Pahl and Mohrin,

Zara is renowned for its ability to develop a product and have it in stores within two weeks. This
retail outlet is known for this fast fashion strategy. When customers think of Zara they think high
quality, fast fashion and low costs.

In CBBE Model is a pyramid which acts as a branding ladder. There is four steps the brand must
take to complete the CBBE model, these are the four steps that will help create brand identity,

4
 Chalermporn Kiratiprasert 6149047

brand meaning, brand response and brand relationships. The brand starts at the bottom of the
pyramid and works its way up.

Brand Salience – Identity (Who are you?)

Achieving the right brand identity involves creating brand silence with customers. Brand
Salience relates to the aspect of awareness of the brand, for example, how often and easily the
brand is evoked under various situations or circumstances. Brand awareness can be categorised
according to depth and breadth. The depth of brand awareness concerns the likelihood the brand
will come to mind and the ease with which it does so. The breadth of the brand awareness
concerns the range of purchase and usage situations in which the brand element comes to mind
(depends largely on the organisation of the brand and product knowledge in memory).

Depth of brand awareness: When mentioning ZARA, the black-and-white logo comes to our
minds and also the high-street fashion brand identity. Although ZARA seldom uses
advertisement, the vivid brand images are known when consumers come to visit ZARA’s
physical stores and the displays. Importantly, ZARA’s store location strategy is its main way to
communicate with the public. In consumers’ minds, ZARA has already been among the top
highly fashion retail outlets

Breadth of brand awareness: ZARA has different product categories which suit for everyone like
female, male, kids. When consumers need trendy but affordable clothing, ZARA is their good
choice. ZARA brings consumers a concept that you don’t need to buy luxury clothing just for
wearing only once, you can buy ZARA’s stylish design with limited budget.

Brand awareness plays an important role in customer decision making because: (1) High
awareness makes it more likely that the brand will become 1 of the ‘consideration set’. (2) High
awareness can affect choices within that consideration set. (3) Strength of brand association will
affect consumer decision making.

Performance & Imagery – Meaning (What are You?)

Performance- This relates to the way the product attempts to meet customers more functional
needs. As ZARA’s idea is to wear disposable and fashionable design, the quality of clothing is
good but less than luxurious brands.

Imagery- Brand imagery deals with the extrinsic properties of the product or service, including
the way in which the band tries to meet the customer’s psychological or social needs. Typical
Zara customers are people who are young, fashion-conscious but with lower budget. They care
about their appearances and longing for being stylish.

Judgment & Feelings – Response (What about You?)

5
 Chalermporn Kiratiprasert 6149047

Judgment- This focuses on the customer’s personal opinions and evaluations of the brand. Brand
judgment is important because if often determine the actions and behaviours the customer will
take towards the brand. This takes into account the brand credibility, quality, superiority and
consideration. ZARA is definitely a trustworthy brand. Since 1975, ZARA has offered fashion
products continuously. ZARA is an expertise in producing fast fashion clothing for male, female
and kids. Although it copies the design from other luxury brands, it truly satisfies consumers’
needs for chasing latest fashion.

Feelings- Brand feelings are the customer’s emotional responses and reactions with respect to the
brand. These feeling can be mild or intense and can be positive or negative. ZARA creates less
emotion about warmth, fun, security; instead, ZARA builds more on self-respect. For people
purchasing ZARA, they can feel they are unique, different, cool, chic, superior and
individualistic

Resonance – Relationships (What about you and me?)

The last step of the model focuses on the ultimate relationship and level of identification the
customer has with the brand. Brand resonance refers to the nature of this relationship and extent
to which the customer feels “in-sync” with the brand. It can be measured in terms of loyalty,
sense of community and engagement. Because ZARA provides limited fast fashion products
without replenishing many times, the products are possible to be sold out soon. Consumers know
this fact, thus they would like to visit ZARA’s store to see the newly available products. Once
they love those products, they can’t refuse to buy them. ZARA manage its social community in a
cool way. It only posts information such as new design of this season or newly open store on FB.
And ZARA doesn’t post and communicate with its clients every day. It’s the personality of
ZARA so there’s no conflict by doing this way. ZARA has 19.7 million fans on Facebook. It
communicates more with younger people who loves fashion. ZARA seldom do marketing;
instead, it saves the money to design and optimizes its supply chain so that customers can be
satisfied with its products. That’s how ZARA keep engaging the public.

Zara is the biggest and most successful fashion retailers company which is considered being one
of the world’s largest fast fashion organizations. Subsequently, this exposition expects to address
the gap in the writing by examining Zara's internationalization designs in various markets. Zara
is a global and famous fashion clothing retailer that designs, manufactures, and sells apparel
design of women, men, and children through it chains all around the world. Zara’s collections
renewed every year with an average of 11,000 styles produced annually. Also, Zara has the
average of 17 visits per customer per year, which considerably higher than its competitors. So,
the shorter the product life cycle, the larger success.

6
 Chalermporn Kiratiprasert 6149047

The proposed brand equity measurement system focuses on key features that would affect Zara,
where they operate within the fast-fashion industry, and brief examples will be provided on how
their performance would be in each category. Additionally, brief examples will also be provided
on how the proposed strategies for Zara can fit in with this measurement system. The basis of the
recommended brand equity measurement system is that it is suitable to the performance of Zara
operating within the fast-fashion industry as it addresses the factors that contribute to Zara’s
brand equity.

Based on the above, a brand equity measurement system will be proposed that incorporates both
Aaker’s model to measure the intangible aspects of the brand, as well as brand valuation tool in
order to measure the tangible financial value of the Zara brand.

Brand awareness refers to the salience of a brand in the mind of a consumer (Aaker, 1996).
Where the different levels of awareness include recognition, recall, top-of-mind, brand
dominance, brand knowledge and brand opinion (Aaker, 1996). From my analysis, Zara is often
referred to as the top fast-fashion brand in the world, and as a result have high brand
awareness amongst consumers and therefore this measure can be used to positively increase
Zara’s brand equity. Additionally, the proposed strategies aim to increase brand awareness of the
Zara brand, so that it becomes the dominant brand in consumer’s minds when they think of the
fast fashion industry.

Perceived quality refers to consumers’ perceptions about the relative quality of a brand, and
therefore it generally needs to use a competitor as a frame of reference (Aaker, 1996). A key
aspect of Zara’s strategy is for their products to be perceived as high quality, affordable
fashion, where many consumers actually perceive the quality of Zara’s products to be high
compared to the price they are paying as well as compared to other fast-fashion competitors.
Thus by having a high perceived quality, this can positively impact Zara’s brand equity.
Additionally, by offering the proposed strategy of the virtual fitting room, Zara have the
opportunity to increase the perceived quality of the brand.

Brand associations refers to anything that connects a customer to the brand, including the
imagery that is unique to a brand, where three different perspectives with which to associate the
brand include the value, brand personality as well as organizational associations (Aaker, 1996;
Aaker & Joachimsthaler, 2009). The proposed strategies aim to positively impact the brand
associations for consumers of the Zara brand, for example, in regards to the E-commerce
website, the aimed associations are; the ease of use for consumers and the benefit of ordering
from the comfort of their own home. The aimed associations of the sustainability initiatives

7
 Chalermporn Kiratiprasert 6149047

include; environmentally conscious and sustainability. Additionally, with the virtual dressing
rooms, the aimed associations are; an innovative and memorable experience.

Brand loyalty refers to consumers’ decisions to repeatedly purchase from a brand over time
(Gunelius, n.d.). As previously mentioned, Zara provide limited quantities of each item they offer
which creates an artificial scarcity, which as a result, motivates consumers to visit the store
regularly as well as purchase items when they see them which in turn creates brand loyalty.
Additionally, the proposed strategy of virtual fitting rooms provides unique in store experiences
as well as the proposed brand extensions are aimed at achieving a sustainable competitive
advantage as well as brand loyalty.

Other brand associations refer to the associations that are strongly and specifically linked to a
brand which allow them to differentiate themselves from their competitors (Aaker, 1996). Other
brand associations for Zara can include anything that consumers relate to the brand, for example,
their efficient value chain, or their fast supply of trendy fashions. Zara also has good supplier
named Inditex has know-how and expertise in fast fashion and retailing business as they have
been in the field for decades. Moreover, Inditex has strong brand and reputation in hand;
especially, for their flagship brand: Zara. The brand is perceived as quality and affordable
fashion. Consequently, the customers keep buying new collections and so does Duchess Kate
Middleton. In terms of tangible assets, Inditex has talent staff and definitely, designers. Also,
there are ten distribution centers located in Spain (Logistics, N.D). These centers are always
ready to distribute new products to the shelf as fast as possible. Altogether, these push factors
fully equip the company to stand worldwide.

8
 Chalermporn Kiratiprasert 6149047

References:

Aaker, D. (1991), Managing Brand Equity. Capitalizing on the Value of a Brand Name, Free
press, New York

Aaker, D. A. (1992),”The Value of Brand Equity”, Journal of Business Strategy, Vol. 13 Issue 4
pp. 27 – 32

Baalbaki, Sally Samih, (2012) Consumer Perception of Brand Equity Measurement: A New
Scale, page 16, Dissertation of doctor of philosophy, University of North Texas

Baldauf, A., Cravens, K.S. and Binder, G. (2003), “Performance consequences of brand equity
management evidence from organizations in the value chain”, Journal of Product and Brand
Management, Vol. 12 No. 4, pp. 220-236

Barwise, P., Higson, C., Likierman and A., Marsh, P (1989), Accounting for Brands, The
London Business School and the Institute of Chartered Accountants in England and Males,
London

Christodoulides G, John W. Cadogan Cleopatra Veloutsou, (2015), “Consumer-based brand

Christopher, M, Lowson, R & Peck, H (2004) Creating agile supply chains in the fashion
industry, International Journal of Retail & Distribution Management, Vol. 32, No. 8, pp. 367-
376.

Cobb-Walgren, C. J., Ruble, C. A., and Donthu, N. (1995). Brand equity, brand preference, and
purchase intent. Journal of Advertising, 24(3), 25-40.

Elliott, R. and Percy, L., 2007. Strategic Brand Management. Oxford: Oxford University Press.

Ferdows, K & Lewis, M.A & Machuca, J.A.D (2004) Rapid-fire fulfillment, Harvard
Business Review Vol. 82, No 11. pp 104-110.

Keller, K. L. (1993): Conceptualizing, Measuring, and Managing Customer-Based Brand Equity.

Keller, K.L. (2003). Strategic Brand Management: Building, Measuring and Managing Brand
Equity, 2nd ed., Prentice-Hall, Englewood Cliffs, NJ.

Keller, Kevin L. and Donald R. Lehmann (2003), “How Do Brand Create Value,” Marketing
Management, 2003 (May), (26-31).

9
 Chalermporn Kiratiprasert 6149047

Keller, K., 2008. Strategic Brand Management: Building, Measuring, and Managing Brand
Equity. 3rd ed. Upper Saddle River: Pearson Education, Inc.

King, C. and Grace, D. (2009). Employee based brand equity: A third perspective. Services
Marketing Quarterly, 30(2), 122-147.

Myers, R. (2003). Using marketing research effectively. Business NH Magazine, 20(9), 25.

Riezebos, R., Kist, B. and Kootstra, G. (2003), Brand Management: A Theoretical and
Practical Approach, Harlow: Financial Times Prentice Hall

Szőcs(2012), Ph. D. dIssueertation,, The MIMIC model of the consumer-based brand equity,
Testing the causal specification of consumer-based brand equity,

Yoo, B and Donthu, N (2001), “Developing and validating a multidimensional consumer-based

Youngbum Kwon, (2013). The Influence of Employee-Based Brand Equity on the Health
Supportive Environment and Culture – Organizational Citizenship Behaviour Relation A
dissertation of Doctor of Philosophy, University of Michigan

10