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Rethinking Branding:The Need for a New Conceptual Framework to Analyze Customer-Based Brand Equity by Abhilash Ponnam and Pradeep

Krishnatray The Icfai Journal of Brand Management, Vol. V, No. 2, 2008

Review Report
This paper highlights a few foundational fallacies in the discipline of strategic brand management as viewed by the authors. These are now conspicuous in the light of new developments like proliferation of store brands, discount brands, progressive emergence of click companies, etc. An attempt has also been made to critique (some) existing literature on brand equity, with specific reference to customer-based brand equity. Based on the critique, the authors underline the need for a new model of customer-based brand equity, which should not only explain the latest developments but also positively contribute to practitioners in developing the strategies which drive brand equity. Definition of brand The operational definition of brand, according to Crimmins (2000), is the ratio of the brands price to its competitors price when both are equally desirable to consumer minus one. A similar view is expressed by Aaker (1996) in measuring one of the vital components of brand equitydollar metric, i.e., the price premium a consumer is willing to pay over an unbranded product. Brand is described as a platform for new products, an entry barrier, leverage over other products, bulwark against shifts in consumer behavior (Farquhar, 1990), source of (sustainable) competitive advantage (Aaker, 1991), a precursor of success of future marketing activities (Keller, 1993) a source of future profits (Crimmins, 2000), a key organizational asset, the primary capital (Guzman, Montana et al., 2006) and as an instrument of competitive superiority (Bivainien, 2007). Effect of Brand Equity on Consumers Brand Choice Behavior and Firms Profitability It is empirically proved that purchase intentions (Cathy and Cynthia, 1995) and brand loyalty intentions (Johnson, Herrmann et al., 2006) are the consequents of brand equity.

A high brand equity results in high profitability for the company (Baldauf et al., 2003) Why Existing Customer-Based Brand Equity Models Could Prove Ineffective The existing models of customer-based brand equity measurement have not taken time as a variable into consideration. Hence, they are static frameworks and might not satisfactorily explain how brand equity changes over a period of time, and how brand equity can be sustained/enhanced over a long period of time (based on Time Dynamics in Marketing suggested by Seth et al., 1988). Aaker (1996) perceived the dimensions of brand equity in five broad measures. They are: loyalty, perceived quality, associations, awareness and market behavior. Limitations Loyalty measure does not take non-customer base into account. Discount brands or value brands score high on perceived value but low on perceived quality. Brand personality which is discussed under association measure is not sensitive to changes in brand equity. Market share indicators are often responsive to short-term strategies and often undermine (long-term) brand equity. Kellers (1993) Framework for Brand Equity

According to Keller, Customer-based brand equity involves consumers reactions to an element of marketing mix, in comparison with reactions to the same marketing mix element attributed to the fictitiously named or unnamed version of product or service. According to Keller, Customer-based brand equity occurs when customer is familiar with the brand and holds some favorable, strong and unique brand associations in the memory. Hence, customer based brand equity fails to exist or ceases to exist, if the brand is not favorably associated or no longer favorably associated in the customers memory. Limitations

it is vital for a brand to be compared with competition, than with an unbranded counterpart in order to obtain a real health status of brand Keller has limited customer based brand equity to customer reactions and to elements of marketing mix. the degree of dislike for a brand, because of its unfavorable associations, is not captured by Kellers brand equity The authors propose that a new brand equity framework that takes systemic view of the entire strategic brand management process might be able to satisfactorily address the quandaries posed

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