Conceptual framework

Consumer behaviour is the study of how people buy, what they buy, when they buy and why they
buy (Kotler, 1994). Another definition is the behaviour that consumers display in searching for,
purchasing, using, evaluating, and disposing of products and services that they expect will satisfy
their needs (Schiffman, 2007). The consumer behaviour most wanted by the marketeers, is not just
picking the product out of the shelves of the store, thinking highly about the brand, getting more and
more out of the wallets of the consumer.
Perceived value is the customers' evaluation of the merits of a product or service, and its ability to
meet their needs and expectations, especially in comparison with its peers (Kopp, 2020). The
perceived value gained from buying a water bottle would be its ability to keep the water cold/hot,
the build quality of the water bottle, and its design among other things. These are the things a
consumer looks for in a product.
The term brand equity refers to the value derived from having a recognized brand. David Aaker
(2022) describes it as a set of brand assets and liabilities linked to a brand name and symbol, which
add to or subtract from the value provided by a product or service. It represents the perceived value
and strength of a brand in the minds of consumers.

An active example can be of Apple. Apple products, including iPhone, have a strong and recognized
presence in the minds of consumers. If the brand name of Apple was severed from the product, The
iPhone, we should see a decrease in sales of the iPhone because one of the reasons the consumer
buys their product is because of the brand equity of Apple.

Brand image is a word which is highly correlated with brand equity and there is nuanced differences
between the two. When a brand consistently delivers on their promise of the product, they build
trust and credibility with the customers, and they become loyal advocates for their products, and it is
true. I will think highly of a brand if it consistently provides me with what I want.

Aaker (1997) developed one of the most well-known frameworks for understanding brand equity.
This paradigm consists of several components, including brand identity, brand image, brand
positioning, and brand resonance.

Brand identification refers to the characteristics and values that distinguish a brand from rivals. It
includes elements such as logo design, packaging, and taglines.

Brand image refers to consumers' mental images of a brand, including their thoughts, feelings, and
associations.

Brand placement describes where a brand falls within a specific market or category. It involves
identifying target audiences, competitors, and differentiating factors.

Brand resonance refers to the psychological and emotional ties between a brand and its clients. It
encompasses aspects such as brand loyalty, commitment, and advocacy.

Keller (2008) proposed another prominent brand equity model. His approach emphasizes the
significance of developing a "customer-based" brand equity platform focusing on meeting consumer
demands and wants. He defines brand equity as "the differential effect that a brand knowledge
system has on consumer response to the extension of a product class." Simply said, this means that
effective brand equity increases customer reaction to new items or services provided under a
recognized brand name.
According to Keller, successful brand equity management entails managing three types of customer
connections: awareness, comprehension, and attitudes. Consumers must recognize a brand,
understand what it stands for, and hold favourable views toward it. Furthermore, he distinguishes
between two sorts of brand equity: cognitive and affective. Cognitive equity is founded on rational
thinking, whereas affective equity is based on emotional responses.

Finally, Doyle (2011) offers a five-stage process for building and maintaining strong brand equity. His
paradigm comprises the following stages: establishing brand awareness, creating brand image,
generating brand response, fostering brand relationships, and cultivating brand resilience.

Overall, various brand equity models exist, each with strengths and limitations. Selecting the
appropriate paradigm for analysis depends on research objectives and context.

The concept of price influence refers to the impact of the price of a product or service on consumer
perceptions, behaviours, and the overall strength of a brand. Price influence can manifest in various
ways, such as affecting consumers' perceived value, quality expectations, and purchase intentions
(Zeithaml, 2000). Moreover, price can also shape consumers' attitudes toward a brand, influencing
their loyalty and advocacy (Anderson, 1998). Perceived value is the customers' evaluation of the
merits of a product or service, and its ability to meet their needs and expectations, especially in
comparison with its peers (Kopp, 2020). Price is an important factor in the creation of perceived
value, as it influences customers' perception of sacrifices and quality (Coutelle et al., 2020). Price
influence plays a crucial role in shaping consumer perceptions and behaviours, and understanding its
nuances is essential for businesses looking to optimize their pricing strategies.

However, the extent to which price influences consumer behaviour and brand perception varies
across different product categories and market conditions. For instance, in commoditized products
like sugar or salt, price tends to play a more significant role in shaping consumer preferences
compared to differentiated products like electronics or luxury goods (Kotler & Keller, 2016).
Additionally, factors like competition, economic conditions, and cultural norms can further modify
the effect of price on consumer choice (Hoyer, 2017).

The Price-Quality Hypothesis (PQH) and the Cognitive Consistency Theory (CCT) tell a lot about the
concept of price influence. The PQH proposes that consumers generally assume higher-priced
products to be of superior quality, whereas the CCT suggests that price influences consumers' beliefs
about a product's attributes, leading them to form biases towards cheaper or pricier options
(Lichtenstein & Slovak, 2004).

Market Positioning is creating a unique identity for a brand in the minds of the consumers. The
branding of a luxury apparel brand like Gucci will be different than the branding of a normal high
quality apparel brand. Gucci is positioning itself as a luxury brand and so they can charge higher
prices for their goods sold. Therefore, setting prices too low can negatively affect a brand's image and
lead to lower perceived quality. On the other hand, charging premium prices can convey a sense of
exclusivity and luxury, enhancing the brand's prestige and desirability (Kotler & Keller, 2016).

References:
Aaker, J. L. (1997). Building Strong Brands. McKinsey Quarterly, 46-54.

Doyle, P. (2011). Marketing Management and Strategy. South-Western College Pub.

Keller, K. L. (2008). Strategic Brand Management: Building, Measuring, and Managing Brand Equity.
Pearson Prentice Hall.

Anderson, R. (1998). Customer satisfaction and loyalty: An empirical study. Journal of the Academy of
Marketing Science, 26(1), 53-66.

Hoyer, W. D. (2017). Consumer behavior. Pearson Education Limited.

Kotler, P., & Keller, K. L. (2016). Marketing management. Pearson Education Limited.

Lichtenstein, S. J., & Slovak, M. H. (2004). Comparison of methods for assessing price premiums.
Journal of Marketing Research, 41(4), 441-455.

Zeithaml, V. A. (2000). Service marketing. Sage Publications.

Kotler, P. and Keller, K. (2011) “Marketing Management” (14th edition), London: Pearson Education

Egan, J. (2007) “Marketing Communications”, London: Cengage Learning

Kotler, P., & Keller, K. L. (2016). Marketing management. Pearson.

Aaker, D. (2022, June 2). What Is Brand Equity? Business Transformation Consultants | Prophet.
https://prophet.com/2013/09/156-what-is-brand-equity-and-why-is-it-valuable/

Coutelle, P., Gall-Ely, M. L., & Rivière, A. (2020). Price and value: Towards new research perspectives.
Recherche Et Applications En Marketing. https://doi.org/10.1177/2051570720947862

Kopp, C. M. (2020, December 1). Perceived Value Explained: What It Is, Why It's Important.
Investopedia. https://www.investopedia.com/terms/p/perceived-value.asp