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The Routledge Companion to Contemporary Brand

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Francesca Dall’Olmo Riley, Jaywant Singh, Charles Blankson

Consumer-based brand equity

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Sally Baalbaki, Francisco Guzmán
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3
Consumer-based brand
equity
Sally Baalbaki and Francisco Guzmán

Keywords
brands, brand equity, scale development.

Introduction
Brands today rule the marketplace. Years ago, when demand exceeded supply, good, high quality
products ruled (Kotler, 2000). However, the marketplace evolved. As the quality of products
became more standardized and the supply of these products started to exceed demand, consumer
decision-making became more complex. Brands steadily gained power as they became facilitators
of consumer decision-making in an oversaturated marketplace. Facing uncertainty and risk,
consumers rely on value-adding brands as shortcuts to simplify their decisions among tens, and
sometimes hundreds, of options (Kapferer, 1997). As sources of value, brands have become
multidimensional concepts capable of capturing content, images, feelings, lifestyles, personalities,
culture, and other characteristics that help a consumer deeply and uniquely associate, or disassociate,
with a brand. As Bedbury and Fenichell (2002) define, brands are psychological concepts held
in consumers’ minds.
As brands have become, if not the most important, one of the most important assets for any
business (Kapferer, 1997; Davis, 2000), it is only natural that the conceptualization, study and
measurement of brand equity has become an important topic for both marketing academics and
practitioners (e.g. Aaker and Keller, 1990; Aaker, 1991, 1996; Keller, 1993; Ailawadi et al.,
2003; Netemeyer et al., 2004; Erdem et al., 2006; Keller and Lehmann, 2006; Christodoulides
and de Chernatony, 2010). Furthermore, consumers view brands in a personalized and unique
manner, and ultimately the value each consumer derives from a brand is subjective. Therefore,
‘several often-divergent view-points on the dimensions of brand equity, the factors that influence
it, the perspectives from which it should be studied, and the ways to measure it’ (Ailawadi
et al., 2003: 1) have emerged. In this chapter we provide an overview of brand equity in general,
and consumer-based brand equity (CBBE) in specific. We review past efforts to measure brand
equity and discuss some specific brand equity scales in detail. Finally, we provide some insights
as to where we believe brand equity analysis and research is going. We hope that this chapter

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serves as a general overview and study guide for the consumer-based brand equity concept, its
seminal models, and measurements.

Brand equity
Most authors agree with Farquhar’s (1989) original definition of brand equity: ‘the added value
with which a given brand endows a product’ (p. 24). This added value has three potential sources
or perspectives. The first is the cognitive psychology perspective. According to this perspective
a brand’s source of added value or equity stems from how consumers respond differently to a
brand’s marketing mix given what consumers perceive and associate with a brand (i.e. Aaker,
1991; Keller, 1993; Anderson, 2007). The second is the information economics perspective.
According to this perspective a brand’s source of added value or equity stems from the increased
utility that a brand name gives to a product (i.e. Wernerfelt, 1988; Erdem and Swait, 1998).
The third is the financial markets perspective. This perspective views the brand’s source of added
value or equity as a financial measure: the firm’s market value minus its tangible asset value
(i.e. Simon and Sullivan, 1993). More recently, a fourth perspective of added value or equity
was proposed. King and Grace (2009: 130) define employee-based brand equity (EBBE) as ‘the
differential effect that brand knowledge has on an employee’s response to their work environ-
ment’. This fourth perspective is particularly interesting as many ‘strong brands’ today are services
or products with an important service component, and as such a company’s employees are critical
in the delivery of the brand experience.
Of all the brand equity conceptualizations, Aaker (1991) and Keller (1993) developed the
two most influential ones. According to Aaker (1991: 15) brand equity is ‘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’. Aaker conceptualizes
brand equity with four dimensions: brand awareness, brand loyalty, brand associations and
perceived quality.
Brand awareness refers to ‘the ability of a potential buyer to recognize or recall that a brand
is a member of a certain product category’ (Aaker, 1991: 61). When consumers are exposed to
a brand, the result is brand awareness. Therefore, the first step in building brand equity is building
brand awareness. In order to measure brand awareness, we have to measure brand recognition
and recall (Keller, 1993; Aaker, 1996).
Brand loyalty is the heart of brand equity. It is defined as ‘a deeply held commitment to rebuy
or repatronize a preferred product/service consistently in the future, thereby causing repetitive
same-brand, or same-brand set, purchasing despite situational influences and marketing efforts
having the potential to cause switching behaviour’ (Oliver, 1997). Gil et al. (2007) have shown
that loyalty is an important dimension of equity; and if brand loyalty is established, then brand
equity will be the result. They conceptualize brand loyalty on the basis of consumer perception.
Brand loyalty adds considerable value to a brand or firm because it creates a group of buyers
that will be loyal for a long time and will less likely switch to a competitor due to price.
Brand associations are representations of what a brand means for a consumer and are ‘anything
linked in memory to a brand’ (Aaker, 1991: 109). Any contact or experience a consumer has
with a brand can create, change, or reinforce certain favourable or unfavourable associations
(Keller, 2003). In order for associations to have a positive effect on brand equity, they must be
unique, strong and favourable (Keller, 2003).
Finally, perceived quality is related to a consumer’s judgment of a product or brand’s overall
superiority or excellence (Zeithaml, 1988). Therefore, firms have to genuinely increase the real
quality of their brands and then communicate this quality through their marketing actions in

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order to affect perceived quality in a positive manner. High perceived quality allows for consumers
to be convinced about buying the brand; for differentiation of the brand from competition;
and for the firm to charge a premium price and then extend the brand (Aaker, 1991).
Of Aaker’s four proposed dimensions, brand awareness, brand loyalty and perceived quality
are relatively easy to measure; scales to measure these constructs have been tested and validated
and are available for both academic and practitioner use. The brand association construct, however,
has proven difficult to measure. Although conceptually brand associations are an important source
of meaning and equity to a brand, they are ultimately individual consumer perceptions that are
subjective and hard to measure.
In line with the perceptual nature of Aaker’s concept of brand awareness, Keller (1993) states
that the power of a brand rests in consumers’ minds; on what they have learned, felt, seen,
and heard about the brand through time. He thus defines CBBE as ‘the differential effect of
brand knowledge on consumer response to the marketing of the brand’ (p. 2). He defines brand
knowledge in terms of two components: brand awareness and brand image. Brand awareness
is easy to measure in terms of recognition and recall. Recognition is the consumers’ ability to
confirm prior exposure to the brand when given the brand as a cue. Therefore, it is consumers’
ability to recognize the brand when they see a picture of the logo for example. Recall is
consumers’ ability to retrieve the brand when given the product category. For example, if you
ask someone to list the first three fast food restaurants off the top of their head, then they are
recalling the ‘top of mind’ brands for them. Brand image, on the other hand, is made up of all
the perceptions about a brand as reflected by the brand associations held in consumer memory
related to attributes, benefits and attitudes. Therefore, the objective is to create unique, strong
and favourable associations in consumers’ minds that lead to a stronger brand image. These
associations can be partially controlled with marketing mix tools. However, total control of a
brand’s image is not possible given that many brand associations depend on aspects that are out
of a firm’s control, e.g. external brand information, word-of-mouth, experience consumers have
directly with the brand, consumers’ identification of a brand with a firm, country, place, event,
or person that is not necessarily the one intended by the company, among many others.
Furthermore, and likewise the challenge of measuring brand associations, Keller’s brand image
construct, is very difficult, if not impossible. Although conceptually sound, and undoubtedly
important to the value of a brand, measuring consumer subjective perceptions in an objective
manner has proven to be a challenging task for those who have ventured into trying to
operationalize both Aaker’s (1991) and Keller’s (1993) CBBE models.

Brand equity measurement

Attempts to measure brand equity based on all of the previously discussed perspectives have
been made. At a consumer level (Aaker, 1991; Keller, 1993; Shocker et al., 1994; Lassar et al.,
1995; Aaker and Joachimsthaler, 2000; Berry, 2000; Chen, 2001; Bendixen et al., 2003; Baker
et al., 2005; Srinivasan et al., 2005; Tong and Hawley, 2009; Christodoulides et al., 2012), at a
company or firm level (Farquhar et al., 1991; Cobb-Walgren et al., 1995; Dyson et al., 1996;
Kapferer, 1997; Doyle, 2001; Kim et al., 2003; King and Grace, 2009), and at a financial market
level (Simon and Sullivan, 1993; Aaker and Jacobson, 1994; Barth et al., 1998). Some attempts
to develop models that encompass different perspectives of brand equity have also been made
(Srivastava et al., 1998; Epstein and Westbrook, 2001; Keller and Lehmann, 2003; Burmann
et al., 2009).
CBBE refers to consumers’ feelings of a particular product due to associations that are not
necessarily related to specific product attributes, that is, associations that exist independent of the

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product itself (Keller and Lehmann, 2006). The customer level measurement perceives the
value of a brand to originate entirely from the consumers (what they buy, how they buy, why
they buy, etc.). Therefore, consumers assign levels of value to brands when they favour one over
the other. From the consumers’ point of view, brand equity is part of their attraction to or repulsion
from a product (Keller and Lehmann, 2006). This perspective allows marketing managers to use
an effective strategy in understanding and influencing consumer attitudes and behaviours. CBBE
focuses on understanding consumers’ state of mind in brand selections and identifying the sources
of brand values (Lassar et al., 1995; Yoo and Donthu, 2001; Baker et al., 2005).
Company or firm-based brand equity is the added value a company receives from a
branded product that it would not have if the product were unbranded (Farquhar et al., 1991;
Cobb-Walgren et al., 1995; Dyson et al., 1996; Kapferer, 1997; Doyle, 2001; Kim et al., 2003).
A company benefits from a strong brand with respect to advertising and promotion effective-
ness, brand extensions insulation from competition, and strong distribution (Hoeffler and
Keller, 2003). According to Hoeffler and Keller (2003), there have been numerous measures,
including increased advertising elasticity, decreased sensitivity to competitor prices, price
premiums and the ability to secure and maintain distribution channels, that assess the impact of
brand equity in the product market.
From a financial-based perspective, brands are assets that can be bought and sold for a certain
price; this price is the financial worth of a brand. Several authors have looked at measuring
brand equity based on financial market performance (Simon and Sullivan, 1993; Aaker and
Jacobson, 1994; and Barth et al., 1998). Simon and Sullivan (1993) define 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’ (p. 29). The authors measure a firm’s brand
equity by deriving financial market estimates from brand-related profits. They do this by using
the financial market value of the firm as a base and then extract the firm’s brand equity from
the value of the firm’s other tangible and intangible assets. This then results in an estimate based
on the firm’s future cash flows. Doyle (2001) contends that brand equity is explained by the
ability of brands to create value by accelerating growth and enhancing prices. Therefore, brands
function as an important driver of cash flow. These different measures have allowed for a different
understanding of why and how companies or brands have been able to create or maintain high
brand equity.
All of these attempts follow one of two complementary measurement approaches: (1) the
direct approach, ‘which measures customer-based brand equity by assessing the actual impact
of brand knowledge on customer response to different marketing elements’ (Baalbaki, 2012),
and (2) the indirect approach, ‘which assesses potential sources of customer-based brand
equity by identifying and tracking customers’ brand knowledge structure’ (Baalbaki, 2012) (see
Table 3.1). Some direct approach examples include financial or market-outcome-based measures
such as brand equity as a measure of brand extendibility (Randall et al., 1998), brand equity as
a price premium measure (Holbrook, 1992; Randall et al., 1998), and brand equity as a revenue
premium (Ailawadi et al., 2003). Indirect approach examples measure overall brand equity through
multiple dimensions (e.g. Lassar et al., 1995; Yoo and Donthu, 2001; Vazquez et al., 2002; de
Chernatony et al., 2004; Christodoulides et al., 2006; Baalbaki, 2012; Christodoulides et al.,
2012; Veloutsou et al., 2013).

Direct approaches
Srinivasan (1979) compares actual choice preference with consumer preferences to measure a
‘brand–specific effect’ (i.e. brand equity): ‘the difference between overall preference and the

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preference estimated by the model is quantified into a monetary scale’ (Baalbaki, 2012). This
direct measurement method is limited as it only provides segment-level estimates of brand equity
and does not analyse the potential sources of brand value. Park and Srinivasan (1994) develop
a scale and measure brand equity within a single product category. They measure brand equity
at the individual level by analysing two components: attribute-based (consumer evaluations
of the physical characteristics of a brand) and non-attribute-based (consumer evaluations of
the brand based on symbolic associations). This method, however, treats the non-attribute-based
component of brand equity as a single set of associations, barring the possibility for a deeper
understanding of how consumers assess brands. Jourdan (2002) refines Park and Srinivasan’s
(1994) measurement. He notes that their measure includes an error term and, through a
repeated measures experimental design, shows that this error is not minor. Although Jourdan’s
(2002) method can be considered superior to prior models, its complex experimental design
makes it difficult to use.
Building on the information economics paradigm, Swait et al. (1993) use the entire value
attached to a brand instead of isolating specific factors. They argue that a brand equity measure
should encompass its total utility given that the effect of brand equity occurs throughout all factors
of the utility function. They thus propose ‘equalization price’ (EP) as a measure of CBBE. EP
measures the differential of a brand’s implicit market value versus its implicit value in a market
void of brand differentiations. Their method calculates CBBE at an individual level, identifies
antecedents of brand associations, and determines the weighted importance of each antecedent
in terms of consumer utility. The model is nevertheless limited as it assumes that all consumers
have identical preferences and thus is only appropriate for testing specific market segments.
Using real purchase data from supermarket checkout counters, Kamakura and Russell (1993)
use a segment-wise logit model to estimate brand value. They identify two sources of equity:
‘brand value’– which serves as a diagnostic for brand competitiveness – and intangible brand
value – which isolates the utility associated to subjective perceptual factors. This method is limited
as it only evaluates CBBE at an aggregate level, similar to Srinivasan (1979), and requires scanner
data. Leuthesser et al. (1995) assume that personal evaluations are biased given consumers’
predisposition towards brands they know. They argue that this predisposition, or psychological
‘halo effect’, is the basis of brand equity. They isolate and measure this ‘halo effect’ by using
two techniques: ‘partialling out’– which is to compute partial correlation coefficients between
attribute ratings after taking into account the effect of overall brand evaluation – and ‘double
centring’– to remove response-set bias and halo effect from the rating data. This method is
limited as it does not indicate the underlying dimensions of consumer-based brand equity, it
only measures equity at the aggregate level, and it is difficult to use.
Shankar et al.’s (2008) brand equity measurement is based on both consumer and financial
measures – relative brand importance and value offering. They combine consumer factors such
as brand associations, brand reputation, brand fit, brand trust, brand fame, brand innovation,
brand regard and brand uniqueness with model estimation to come up with a model for
estimating, tracking and managing brand equity for multicategory brands. The method is limited
as it does not consider that brand-level financial measures may be unavailable, and because as
an aggregate measure of brand equity it only measures relative brand importance at the
individual level.

Indirect approaches
Lassar et al. (1995) propose performance, value, social image, trustworthiness and commitment
as CBBE dimensions and test their scale using consumer survey data from two product

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categories: watches and televisions. ‘Their 17-item Likert scale has adequate levels of internal
consistency and discriminant validity’ (Baalbaki, 2012), but the scale does not include any
behavioural components nor the authors report the scale’s external validity.
Vazquez et al. (2002) propose brand name functional utility, brand name symbolic utility,
product functional utility and product symbolic utility as CBBE dimensions and test their scale
using data from the sports shoe category in Spain. Their 22-item scale has reasonable levels of
reliability and validity and is easy to use. Kocak et al. (2007) try to replicate their results in
Turkey, using the exact same 22-item scale in the sports shoes category, but find that the original
scale does not work for the Turkish sample and adapt the scale to 16 items. This set of studies
highlight that consumers in different cultures evaluate brands differently, and the potential need
for culturally specific brand equity scales.
Specific industry brand measurements have also been developed. De Chernatony et al. (2004)
have developed a brand performance measure for financial services brands. They propose brand
loyalty, satisfaction and reputation as CBBE dimensions. Christodoulides et al. (2006) have
developed a 12-item measure for brand equity in an online retail/service (ORS) and analyse
how the Internet and new technologies have allowed consumers to become brand value
co-creators. They propose emotional connection, online experience, responsive service nature,
trust and fulfilment as dimensions of e-tail brand equity. Both studies use consumer survey data
to measure and validate their scales.
Boo et al. (2009) have developed a measure for measuring the brand equity of tourist
destinations. They propose destination brand awareness (DBA), destination brand image (DBI),
destination brand quality (DBQ), destination brand value (DBV), and destination brand loyalty
(DBL) as CBBE dimensions. They test their scale using two destinations – Las Vegas and Atlantic
City – and conclude that destination-specific items must be considered for measuring
destinations’ brand equity. Rajasekar and Nalina (2008) measure the brand equity of India
as a country and identify performance, social image, value, trust-worthiness and attachment as
CBBE dimensions. Their results indicate that performance, trust-worthiness and attachment are
the dimensions that have significant influence on the overall equity of the India brand.
Yoo and Donthu’s (2001) brand equity scale is the most robust in the literature to date
(Christodoulides and de Chernatony, 2010). Based on Aaker (1991) and Keller (1993), their
multidimensional brand equity scale (MBE) results in three dimensions – brand loyalty, brand
perceived quality and brand awareness/associations. They have also developed an overall brand
equity construct to assess the scale’s convergent validity. The scale, however, has its limitations.
Baalbaki (2012) argues that one of the main reasons for this scale not being fully functional is
because it is not customer-focused. They add that most scales available in the literature have
been developed based on purely conceptual models (i.e. Aaker, 1991 and Keller, 1993). As a
consequence, and as previously discussed, constructs such as brand associations, which are fully
subjective, become very difficult to measure. Baalbaki (2012) also argues that the fact that the
two most influential models were purely theoretically developed, and that all of their constructs
and measurements have been developed without confirming or validating their relevance to
consumers, has led to the lack of a fully functional, easy to implement, universally accepted
consumer-based brand equity scale.
Two recent efforts, however, are worth highlighting. Both suggest alternative scales not
purely based on conceptual models. Christodoulides et al. (2012) conduct qualitative research
with brand management experts to identify brand equity dimensions, and then test and
validate their scale in a multinational study. Their conceptualization of brand equity includes
five dimensions: awareness, heritage, uniqueness, reliability and willingness to sacrifice. Likewise,
Baalbaki (2012), conducted qualitative research with consumers to identify what they label as

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Table 3.1 Brand equity measurement approaches

DIRECT APPROACH
# Author Year Use Description Base conceptualization Dimensions Definition of brand equity
1 Srinivasan 1979 measurement use the multi-attribute n.a. n.a. ‘brand-specific effect’ is the
model to measure component of a brand’s overall
consumer-based brand preference that is not explained
equity by the multi-attribute model
2 Kamakura and 1993 scale looked at perceived n.a. perceived quality, the implied utility or value
Russell quality and brand brand intangible value assigned to a brand by the
intangible value of consumer
CBBE
3 Swait et al. 1993 scale Equalization Price as a n.a. n.a. propose a measure of consumer-
measure of brand based brand equity called
equity ‘Equalization Price’ (EP) which is
the monetary expression of the
utility a consumer attributes to a
bundle consisting of a brand
name, product attributes and
price
4 Park and 1994 measurement achieved measurement n.a. attribute-based brand the difference between an
Srinivasan of brand equity at the equity, non-attribute- individual consumer’s overall
individual level based brand equity brand preference and his or her
multi-attributed preference
based on objectively measured
attribute levels
5 Leuthesser et al. 1995 scale the halo effect measure Thorndike, 1920 and n.a. from Keller: brand equity
of brand equity Keller, 1993 represents the value to a
consumer of a product, above
that which would result for
otherwise identical products
without the brand’s name
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6 Jourdan 2002 measurement amendment and Park and Srinivasan, attribute-based brand the difference between the
improvement of the 1994 equity, non-attribute- subjective preference and the
Park and Srinivasan based brand equity objective preference vis-à-vis the
measurement model product
using experimental
design
7 Ailawadi et al. 2003 scale propose and validate Keller, 2003 revenue premium is the from various authors: the
revenue premium as an difference in revenue marketing effects or outcomes
outcome measure of (net price x volume) that accrue to a product with its
brand equity between a branded brand name compared with
good and a those that would accrue if the
corresponding private same product did not have the
label brand name
8 Shankar et al. 2008 scale a multicategory brand n.a. offering value (net from Shocker and Weitz 1988:
equity model and its present value or the net present value of the
application financial worth of an incremental cash flows
offering carrying a attributable to a brand name
brand name) and RBI and to the firm owning that
(relative brand brand relative to an identical
importance derived product with no brand name or
from consumer brand band-building efforts
choice and determined
by brand image and
other marketing-mix
elements)

INDIRECT APPROACH
# Author Year Description Base conceptualization Dimensions Definition of brand equity
1 Lassar et al. 1995 measuring customer-based Keller, 1993 performance, social image, brand equity stems from the greater
brand equity value, trustworthiness and confidence that consumers place in a
attachment brand than they do in its competitors.
This confidence translates into
consumers’ loyalty and their
willingness to pay a premium price for
the brand
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Table 3.1 Continued

INDIRECT APPROACH
# Author Year Description Base conceptualization Dimensions Definition of brand equity
2 Yoo and Donthu 2001 multidimensional brand Aaker, 1991, 1996 brand loyalty, perceived consumers’ different response
equity scale and Keller, 1993 quality and brand between a focal brand and an
awareness/associations unbranded product when both have
the same level of marketing stimuli
and product attributes
3 Vazquez et al. 2002 developing and validating a Kamakura and product utility (product the overall utility that the consumer
measurement instrument for Russell, 1991 and functional utility, product associates with the use and
consumer-based brand equity Cobb-Walgren et al., symbolic utility) and brand consumption of the brand; including
1995 name utility (brand name associations expressing both
functional utility, brand name functional and symbolic utilities
symbolic utility)
4 Washburn and 2002 modifications of the Yoo and Aaker, 1991, 1996 brand loyalty, perceived consumers’ different responses
Plank Donthu (1997) scale and Keller, 1993 quality and brand between a focal brand and an
awareness/associations unbranded product when both have
the same level of marketing stimuli
and product attributes
5 de Chernatony 2004 developed a brand depth interviews brand loyalty, satisfaction, Marketing Science Institute (MSI)
et al. performance measure for reputation definition of Brand Equity
financial services brands

6 Netemeyer et al. 2004 developing and validating
measures of facets of
customer-based brand equity
7 Pappu et al. 2005 an improvement to the
measurement of consumer-
based brand equity
8 Christodoulides 2006 conceptualizing and
et al. measuring the equity of
online brands
Aaker, 1991, 1996 perceived quality, perceived
and Keller, 1993 value for the cost, uniqueness,
and the willingness to pay a
price premium for a brand
Aaker, 1991, 1996 brand awareness, brand
and Keller, 1993 associations, perceived quality
and brand loyalty
qualitative research emotional connection, online
experience, responsive service
nature, trust and fulfilment
from Keller: CBBE occurs when the
consumer is familiar with the brand
and holds some favourable, strong,
and unique associations in memory
from Farquhar: value endowed by the
brand to the product
Online Retail/Service (ORS) Brand
equity is defined as a relational type of
intangible asset that is co-created
through the interaction between
consumers and the e-tail brand
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# Author Year Description Base conceptualization Dimensions Definition of brand equity

9 Kocak et al. 2007 replication of the consumer- Vasquez et al., 2002 product utility and brand from Vazquez et al.: overall utility that
based equity scale developed name utility (revised scale consumer associates with the use and
by Vazquez et al., 2002 from 22 to 16 items) consumption of the brand, including
associations expressing both
functional and symbolic utilities
10 Guizani et al. 2008 working paper; development Aaker, 1991, 1996 brand loyalty, perceived from Farquhar: value added by the
of a scale for consumer brand and Keller, 1993 brand quality, brand brand name to the product
equity using French knowledge and social value
consumers (non-students)
11 Lehmann et al. 2008 suggest a parsimonious set of Keller and Lehmann, comprehension, comparative brand performance can be thought of
brand measures that can be 2003 advantage, interpersonal in terms of four stages: awareness,
used to measure brand relations, history, preference image and associations, preference
performance and attachment and attachment.
12 Rajasekar and 2008 a new measure of customer- Aaker, 1996, and performance, social image, from Farquhar: value endowed by the
Nalina based brand equity in India Brucks and Zeithaml, value, trustworthiness and brand to the product
1991 attachment
13 Buil et al. 2008 new brand equity scale Aaker, 1991 Brand awareness, perceived from Aaker: a set of brand assets and
including personality quality, brand loyalty and liabilities linked to a brand, its name
dimensions (items from many brand associations (perceived and symbol that add to or subtract
different authors) value, brand personality and from the value provided by a product
organizational associations) or service to a firm and/or to that
firm’s customers
14 Zeugner-Roth 2008 country brand equity scale Yoo and Donthu, country brand loyalty, from Farquhar: define country brand
et al. 2001 perceived country brand equity as the value-added brought
quality and country brand forth by the association of a product
awareness/associations or brand with a given country name,
as perceived by the individual
consumer
15 Davis et al. 2009 measuring brand equity for Keller, 1993 brand awareness, brand from Aaker: a set of brand assets and
logistics services image, overall brand equity liabilities linked to a brand, its name
and symbol that add to or subtract
from the value provided by a product
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Table 3.1 Continued

INDIRECT APPROACH
# Author Year Description Base conceptualization Dimensions Definition of brand equity
or service to a firm and/or to that
firm’s customers
16 Boo et al. 2009 developed a destination Aaker, 1991, 1996, destination brand awareness, from de Chernatony and McDonald,
brand scale (used Las Vegas and Keller, 1993 destination brand image, 2003: overall utility that customers
and Atlantic City as destination brand quality, place in a brand compared with its
destinations) destination brand value and competitors
destination brand loyalty
17 Atilgan et al. 2009 emergence of brand trust as a Aaker, 1991, 1996, perceived quality, brand from Yoo and Donthu, 2001:
new dimension instead of and Keller, 1993 loyalty, brand associations difference in consumer choice
brand awareness and brand trust between the focal branded product
and an unbranded product given the
same level of product features, and
Keller, 2003: brand with equity
provides an ownable, trustworthy,
relevant, distinctive promise to
consumers
18 Christodoulides 2012 suggest an alternative scale to Aaker, 1991 awareness, heritage, from Farquhar: brand equity is a
et al. identify components of CBBE uniqueness, reliability and key intangible asset that arises from
from the perspective of willingness to sacrifice past brand building activities and
experts in brand management encompasses the added value
endowed by the brand to the
product

Source: The authors

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truly consumer-perceived dimensions, and then validate and test the scale. They propose quality,
preference, social influence, sustainability and leadership as consumer-perceived CBBE dimen-
sions. All these factors are easily measurable with specific and objective scale items.

Industry models
Two industry models currently used by companies to measure brand value are Young and
Rubicam’s BrandAsset Valuator (BAV) and Millward Brown’s Brand Dynamic models. Young
and Rubicam’s BrandAsset Valuator (BAV) model profiles brands according to four key
dimensions: differentiation, relevance, esteem and knowledge. Differentiation is about a brand’s
ability to create a sustainable competitive advantage and it is the engine of the brand. Relevance
is the brand’s ability to be personally meaningful. Esteem is the extent to which consumers like
and respect a brand; it measures loyalty and how well a brand fulfils its promise. Knowledge
measures the level of intimacy a consumer has with the brand. Differentiation and relevance
form a measure of brand strength which is a leading indicator of future growth value; whereas
esteem and knowledge form a measure of brand stature, which is a current indicator of current
operating value. According to BAV, leadership brands excel on both strength and stature
(BrandAsset Consulting, 2010). Coopers and Lybrand evaluate brand equity by comparing the
premium price paid for a branded product with the price of unbranded products. Arthur Young
Australia assess profitability of a branded versus unbranded product by accounting for things
such as advertising, trademark registration and other branding expenses.
Millward Brown Optimor’s BrandZ defines the brand value as being equal to the branded
intangible earnings multiplied by the brand contribution multiplied by the brand multiple (or
projected earnings). What the company does is summarize the strength of a brand’s relationship
with consumers using two key measures: presence and voltage. Presence measures how many
people know about a brand and what it offers. Therefore, brands with high presence will be
top of mind and in consumers’ consideration sets. Voltage is a measure of how efficiently a brand
converts people from presence to higher levels of loyalty. Therefore, a brand with high voltage
will be in a good position to grow its share of sales in the category. They then plot brands
according to presence and voltage to create a map of brand equity made up of four quadrants.
The estimation of total brand value is found by focusing on the strength of a brand’s relationship
with consumers, making it possible to put a value on the current and future contribution that
branding makes to a company’s bottom line (Millward Brown Optimor, 2010). For a more
detailed discussion of the BrandZ methodology of financial valuation (and other methods) you
can refer to the chapter on Brand Valuation Methods in this same Companion.
However, some of these brand valuations are limited as they sometimes make assumptions
about different dimensions that they believe make up brand value (or equity) without asking
consumers about what they value about a brand; in a way, they are making a guesstimate of
different aspects that may or may not, as a whole, impact a brand’s equity. Therefore, just as
Farquhar (1989) suggested, practically oriented methods that take into account experiences and
comparative research to judge the validity and usefulness of brand valuation methods are still
needed.

Conclusions
Considering that it was formally defined by Peter Farquhar in 1989, the analysis and study of
brand equity is still relatively new. However, the importance of the concept in business has far
surpassed the speed at which measurement scales have been developed. There is still a gap and

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lack of understanding as to how to reconcile the importance of subjective perceptions and

associations for measuring the power, strength and equity of a brand, with the need to find an
objective measure of these perceptions. No one would deny that brands, now more than ever,
are owned by consumers; they shape them, they use them, and they even market and promote
them. Consumers have become the storytellers, and the individual power of each unique story
is part of the brand’s equity. In terms of conceptualization, both Aaker (1991) and Keller’s (1993)
seminal pieces get it right. It has been, in our opinion, in the operationalization of these models
that the measurement problems have emerged. What brand associations? What elements of the
brand image? Researchers, in general, have followed and applied these models without
questioning their validity and without identifying specific and measurable dimensions relevant
to consumers.
In our experience as branding academics and consultants we have faced the challenge of this
measurement. In talking to practitioners and the way they assess the equity of their brands, we
have learned that given the lack of a useable measure, despite the fact they understand and agree
with the multidimensionality of the concept, the use of a complex indirect method becomes a
challenge, and thus they rely on single-item direct measures to have an approximate indicator
of the value of their brands. We believe that the two most recent scale development efforts
that we have reviewed in this chapter address this problem from its origin. Both develop scale
measurements guided by the conceptual seminal models, but then, following a proper scale
development process, rely on qualitative data – from management experts (Christodoulides
et al., 2012) and consumers (Baalbaki, 2012) to identify specific, relevant and measurable
dimensions. This market-oriented scale development approach is, in our view, a way to close
the gap between the conceptual models and the difficulty to apply them.
Many questions still remain unanswered and the future of brand equity research is open and
exciting. For example, is it even possible to talk about a single CBBE measure or does culture
play an important role in how brands are valued in different contexts? Is it possible to reconcile
the measurement challenges of consumer-based and financial-based brand equity? Does it make
sense to have one overall measurement for both concepts or is it better to keep CBBE and
FBBE as separate measures? Are the dimensions relevant for assessing a brand’s value equal in
different industrial sectors, or are industry-specific measures necessary? Does the whole concept
of brand equity need to be revisited 25 years later given the way consumers have become
empowered and are the owners and quasi-managers of brands? We hope that the review that
we have presented not only serves as a summary of past work on the topic, but as an invita-
tion to keep challenging the established models and further advance brand equity research. One
thing is for sure, as brands rule today’s marketplace, the power of brands, branding and
brand equity is here to stay.

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