(2015), "Executive summary of “Towards a unified theory of brand equity: conceptualizations, taxonomy and avenues for future research”", Journal of Product & Brand Management, Vol. 24 No. 1. https://doi.org/10.1108/JPBM-01-2015-0797
Emerald Group Publishing Limited
Executive summary of “Towards a unified theory of brand equity: conceptualizations, taxonomy and avenues for future research”
Article Type: Executive summary and implications for managers and executives From: Journal of Product & Brand Management, Volume 24, Issue 1
This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.
Brands play a major part in the lives of people today. They serve as quality indicators which provide the consumer with reassurances that promises regarding such as performance consistency and benefits will be delivered. From the organizational perspective, they provide an effective means of differentiating what are often largely homogenous products and services. The extra value brands can add to the firm’s offerings helps meet different stakeholder needs and thus maximize available resources.
Furthermore, brands are recognized as helping to safeguard companies during times of uncertainty in the operating environment. Investment in and careful management of brands is, therefore, seen as an important factor in ensuring that a firm performs well. Despite its importance, the literature provides few insights to aid the development of brand-building strategies.
A comparable picture exists with regard to identifying key determinants of brand equity. The difficulty in generalizing across a diverse range of industries and nations is one reason forwarded for this. Greater emphasis on how brand equity is created and exploited would significantly aid business organizations. Claims that a universal definition of “brand” itself is not possible exacerbate this challenge. Subscribers to this view base it on the fact that brands are viewed from different perspectives in different contexts.
Brand equity has ancient roots that recognized the possibility of using intangible features to achieve differentiation goals. Contemporary marketing scholars similarly argue that brands add value for stakeholders through factors other than the intrinsic functional traits of products and services offered under their name. It helps items to be distinguishable from competitor offerings and positively affects customer preferences, satisfaction and loyalty. Others have said that such as consumer “ideas, feelings, and attitudes” pertaining to a firm’s products are encompassed in a brand and its name.
Popular among the different definitions of brand equity is the notion that it is a three-dimensional construct incorporating customer, product and finance. How these separate elements are factored into measurement of equity remains subject to considerable debate. Approaches based on customer or finance do, however, account for most avenues of research into brand equity. The customer-oriented mode represents an individual’s view of the brand based on such as his or her experiences, thoughts, perceptions, images and attitudes. Its subjective nature is considered a potential weakness. Financial-based equity is firmly concerned with economic performance. Critics question this approach, pointing to its short-term focus and reliance on just one performance metric. Davcik et al. suggest a hybrid framework integrating both consumer and financial measures might prove most appropriate.
The view in certain studies is that the positive outcomes attributed to brand equity would not usually arise if the product in question did not carry the brand name. Different researchers question this though, claiming that all products effectively belong to a brand that by definition possesses some level of equity. They believe that no unbranded products therefore exist. Private label brands are cited as an example. Although marketed mainly on price, such offerings also compete on the reputation and history of the retailers involved.
Davcik et al. propose that the brand equity concept needs to consider the differing perspectives of various stakeholder groups. They point out that the interests of such as consumers, manufacturers, retailers and investors will often conflict and thus require better alignment. A “holistic organizational perspective” is therefore forwarded as the most ideal way to ascertain key determinants of brand equity. The meaning of brand equity will often differ for each stakeholder group, so the holistic approach will best ensure that all the different “consequences and ramifications” are perceived.
To date, the role of marketing activities in brand equity creation have received minimal scrutiny. The authors attribute this void to the tendency for research to largely confine its attention to measuring brand equity rather than identifying its antecedents.
In the attempt to gain better insight into sources and determinants of brand equity, Davcik et al. explore a comprehensive database of relevant articles. However, they conclude that the literature does not offer a measurement framework suitable enough to facilitate such understanding.
From the analysis, it was possible to categorize different brand equity studies based on their primary focus. How to leverage brand equity is one approach taken but it seen as limited by its failure to determine which strategies would be most effective at leveraging brand equity. The customer-based emphasis on equity notes the aim to create mutual value for consumer and firm alike. Various positive outcomes of brand loyalty are also pointed out, as is the importance of brand portfolios and the need to manage them properly. Being more sharply focused on the consumer and exploring ways that additional product features are regarded as some of the ways to enhance equity. Individual consumer preferences are suggested in other work as possibly providing the foundation for developing and measuring equity that is consumer-based. Another notion is that “brand awareness, attribute perception biases and non-attribute preference” generate equity from the customer’s perspective. But a failure to determine the comparable impact of each source is among the criticisms of this approach.
The relevance of emotional engagement of consumers and other stakeholders with various aspects of the organization is examined too. Additional work in this area could boost understanding of the different dimensions involved in emotional attachment.
Various other approaches are documented including an examination of the impact of marketing-mix elements. In the view of Davcik et al., a focus on price is similar to other models based on revenue or finance in that it only addresses one brand equity dimension and can thus produce biased results. As with the other equity dimensions, the authors offer research recommendations and provide a comprehensive list of issues that merit further scrutiny from scholars and practitioners.
The authors put forward the view that brand equity is created through interaction between three business domains:
1. stakeholder perceptions of value, whereby brand equity emerges from a process involving stakeholders that is “social and dynamic”;
2. marketing assets that help create value for stakeholders and impact on anticipated financial outcomes from the brand; and
3. various outputs that determine financial performance, relating to such as pricing, market share and return on investment.
It is suggested that aims to develop a unified theory of brand equity should start from the premise that a longer-term perspective of marketing performance should be adopted. Improving financial indicators today serves as a building block for brand equity tomorrow. Davcik et al. conclude by suggesting steps toward theory development that focus on research, testing and creation of a framework. They stress the need for clarity of definitions, illustrated by the confusion arising from brand equity and brand value being used as interchangeable terms.
To read the full article enter 10.1108/JPBM-06-2014-0639 into your search engine.
(A précis of the article “Towards a unified theory of brand equity: conceptualizations, taxonomy and avenues for future research”. Supplied by Marketing Consultants for Emerald.)