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An Approach to the Measurement, Analysis, and Prediction of Brand Equity and Its Sources

Author

Listed:
  • V. Srinivasan

    () (Graduate School of Business, Stanford University, Stanford, California 94305)

  • Chan Su Park

    () (Korea University Business School, Seoul, 136-701, Korea)

  • Dae Ryun Chang

    () (Yonsei Business School, Seoul, 120-749, Korea)

Abstract

The authors propose a new approach for measuring, analyzing, and predicting a brand's equity in a product market. Brand equity is defined as the incremental contribution ($) per year obtained by the brand in comparison to the underlying product (or service) with no brand-building efforts. The incremental contribution is driven by the individual customer's incremental choice probability for the brand in comparison to his choice probability for the underlying product with no brand-building efforts. The approach takes into account three sources of brand equity---brand awareness, attribute perception biases, and nonattribute preference---and reveals how much each of the three sources contributes to brand equity. This is done by taking into account not only the direct effects of these three sources on choice probabilities, but also the indirect effects through enhancing the brand's availability. The method provides what-if analysis capabilities to predict the likely impacts of alternative strategies to enhance a brand's equity. The survey-based results from applying the method to the digital cellular phone market in Korea show that the proposed approach has good face validity and convergent validity, with brand awareness playing the largest role, followed by nonattribute preference.

Suggested Citation

  • V. Srinivasan & Chan Su Park & Dae Ryun Chang, 2005. "An Approach to the Measurement, Analysis, and Prediction of Brand Equity and Its Sources," Management Science, INFORMS, vol. 51(9), pages 1433-1448, September.
  • Handle: RePEc:inm:ormnsc:v:51:y:2005:i:9:p:1433-1448
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    File URL: http://dx.doi.org/10.1287/mnsc.1050.0405
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    References listed on IDEAS

    as
    1. Nedungadi, Prakash, 1990. " Recall and Consumer Consideration Sets: Influencing Choice without Altering Brand Evaluations," Journal of Consumer Research, Oxford University Press, vol. 17(3), pages 263-276, December.
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    4. Abel P. Jeuland, 1979. "The Interaction Effect of Preference and Availability on Brand Switching and Market Share," Management Science, INFORMS, vol. 25(10), pages 953-965, October.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Venkatesh Shankar & Pablo Azar & Matthew Fuller, 2008. "—: A Multicategory Brand Equity Model and Its Application at Allstate," Marketing Science, INFORMS, vol. 27(4), pages 567-584, 07-08.
    2. L von Auer & M Trede, 2012. "The dynamics of brand equity: a hedonic regression approach to the laser printer market," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 63(10), pages 1351-1362, October.
    3. Natalia A. Kochkina & Olga V. Novikova & Dmitriy B. Potapov, 2014. "What Affects Brand Equity: The Precise Measurement With Consumer Choice Model," HSE Working papers WP BRP 26/MAN/2014, National Research University Higher School of Economics.
    4. de Oliveira, Marta Olivia Rovedder & Silveira, Cleo Schmitt & Luce, Fernando Bins, 2015. "Brand equity estimation model," Journal of Business Research, Elsevier, vol. 68(12), pages 2560-2568.
    5. Mert Bilgin, 2012. "The PEARL Model of Sustainable Development," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 107(1), pages 19-35, May.
    6. repec:eee:ijrema:v:33:y:2016:i:1:p:93-106 is not listed on IDEAS
    7. Tariq Jalees, Nimra Shahid, Huma Tariq, 2015. "An Empirical Investigation on the Effect of Brand Loyalty," Journal of Management Sciences, Geist Science, Iqra University, Faculty of Business Administration, vol. 2(1), pages 166-184, March.
    8. Crass, Dirk, 2014. "The impact of brand use on innovation performance: Empirical results for Germany," ZEW Discussion Papers 14-119, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. Burmann, Christoph & Jost-Benz, Marc & Riley, Nicola, 2009. "Towards an identity-based brand equity model," Journal of Business Research, Elsevier, vol. 62(3), pages 390-397, March.
    10. Avi Goldfarb & Qiang Lu & Sridhar Moorthy, 2009. "Measuring Brand Value in an Equilibrium Framework," Marketing Science, INFORMS, vol. 28(1), pages 69-86, 01-02.
    11. repec:eee:ijrema:v:27:y:2010:i:3:p:248-260 is not listed on IDEAS
    12. Muhammad Imtiaz Subhani & Amber Osman, 2011. "A Study on the Association between Brand Awareness and Consumer/Brand Loyalty for the Packaged Milk Industry in Pakistan," South Asian Journal of Management Sciences (SAJMS), Iqra University, Iqra University, vol. 5(1), pages 11-12, Spring.
    13. Datta, Hannes & Ailawadi, Kusum L. & van Heerde, H.J., 2017. "How well does consumer-based brand equity align with sales-based brand equity and marketing mix response?," Other publications TiSEM 341e600f-af04-42e7-9668-a, Tilburg University, School of Economics and Management.
    14. Ahmed Y. Ebeid & Hesham F. Gadelrab, 2014. "A Structural Equation Modeling Approach to Investigate Negative Word of Mouth Impact on Customer-Based Brand Equity: Does Attribution Matter?," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(9), pages 1-13, September.
    15. Basu, Sandip & Phelps, Corey & Kotha, Suresh, 2011. "Towards understanding who makes corporate venture capital investments and why," Journal of Business Venturing, Elsevier, vol. 26(2), pages 153-171, March.
    16. Dan Ke & Anran Chen & Chenting Su, 2016. "Online trust-building mechanisms for existing brands: the moderating role of the e-business platform certification system," Electronic Commerce Research, Springer, vol. 16(2), pages 189-216, June.
    17. repec:eee:joreco:v:18:y:2011:i:1:p:38-45 is not listed on IDEAS
    18. repec:eee:jbrese:v:85:y:2018:i:c:p:91-104 is not listed on IDEAS
    19. Martínez-Garmendia, Josué, 2010. "Application of hedonic price modeling to consumer packaged goods using store scanner data," Journal of Business Research, Elsevier, vol. 63(7), pages 690-696, July.
    20. repec:eee:joreco:v:33:y:2016:i:c:p:8-16 is not listed on IDEAS

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