7/7/2021 Brand Equity Models and Measurement | Insights Association

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Brand Equity Models and Measurement

LAST UPDATED:
MARCH 14, 2018

In simple terms, “brand equity” is a construct that is designed to reflect the real value
that a brand name holds for the products and services that it accompanies. Measuring
brand equity is considered important because brands are believed to be strong
influencers of critical business outcomes, such as sales and market share. For example,
Inc. Magazine notes that “branded products invariably command a higher price than
so-called "generic" or "store brands"—even when the product is itself a commodity like
sugar. In such cases the higher price is due almost entirely to the power of the brand.
”[1] Professor Kevin Keller, of Dartmouth College, lists the following seven benefits of
brand equity[2]:

Be perceived differently and produce different interpretations of product

performance;
Enjoy greater loyalty and be less vulnerable to competitive marketing actions;
Command larger margins and have more inelastic responses to price increases
and elastic responses to price decreases;
Receive greater trade cooperation and support;
Increase marketing communication effectiveness;
Yield licensing opportunities;
Support brand extensions
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Brand equity, like most constructs, hasBe a Member

been defined and measured in numerous
ways.  It is sometimes understood fromGet
the perspective of tangible financial assets of a
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firm.  However, from a marketing research perspective,

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conceptually- as a framework for understanding the power of the intellectual and
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emotional associations consumers have with particular named products and services. 
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In contrast to the absolute dollar valuations that underscores the direct financial
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perspective; marketing researchers seek to measure and understand brand equity for
strategic positioning and planning.

Modeling & Measuring Brand Equity

Brand equity has been defined and measured by experts from both academia as well
as for-profit companies. In fact, many research agencies have developed their own
brand equity models that are executed in partnership with end-user researchers. As
Professor Kevin Keller, of Dartmouth College, observes “although the details of
different approaches to conceptualize brand equity differ, they tend to share a common
core: All definitions typically either implicitly or explicitly rely on brand knowledge
structures in the minds of consumers- individuals or organizations- as the source or
foundation of brand equity.”[3]

Opinion researchers define and measure brand equity in terms of the knowledge
consumers have of a brand.  To this end, numerous published models and
measurements of brand equity are available.  The chart below details several of these
constructs.  Notably, measuring brand equity may be only a single piece of a more
comprehensive brand research program.  Likewise, an organization’s brand research
program may be only a single facet of the larger research and insights program. 
Review Insights Association's other resources for a better understanding of how a
comprehensive research and insights program fits together.

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[1] INC. Magazine, “Brand Equity”

[2] Keller, Kevin Lane, “Measuring Brand Equity” Chapter 26, page 22 on 10/13/10

[3] Ibid., page 2

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