Brand Equity Theoretical Phenomenon Or Practicable Instrument For Market Control


Thomas Andresen and Thorsten Muller (1998) ,"Brand Equity Theoretical Phenomenon Or Practicable Instrument For Market Control", in E - European Advances in Consumer Research Volume 3, eds. Basil G. Englis and Anna Olofsson, Provo, UT : Association for Consumer Research, Pages: 223-226.

European Advances in Consumer Research Volume 3, 1998      Pages 223-226



Thomas Andresen, icon Business Consulting, Germany

Thorsten Muller, icon Business Consulting, Germany

Conditions for successful marketing have changed radically in recent years. Saturated markets and interchangeable product benefits make it increasingly difficult for consumers to differentiate between brands. Thus a unique brand is necessary and consequently difficult to create.

The future will belong to the strongest brands. Hamish Maxwell (ex CEO Philip Morris) stressed, that in a lot of cases brands are the most valuable asset of a company.

Basically there are two different approaches to measure brand equity (see Figure 1). The finance-orientated and most of the existing sales-orientated approaches does not provide clues for successful brand steering. Not a balance sheet (which gives no information about future potential of a brand) but only consumers and there mental image of a brand are able to provide a benchmark for evaluation.

In co-operation with a number of well-known manufacturers of branded goods icon has developed a systematic approach to control and steer brands successfully. The research was based on long term observation of brands and identification of their success-factors. icon has developed a brand management tool called brand status founded on these extensive studies.

The brand equity is composed of two components: brand imagery [Brand imagery is more than a quanitation of attitudes towards a brand. Classic image profiles of brands in one category become constantly more and more equal, so a differentiation between brands only by image profiles is impossible. Brand imagery means the entire "picture" of a bran, which is verbally and visually stored in the consumer's mind, i.e. images which consumers can recall to memory by closing their eyes and imagining a certain brand.] and brand credit. The relative contribution of this two components is strongly dependant on the lifespan of a brand (See Figure 2). If it already exists for a long time, brand credit is the dominating factor (in this case, short-term action would have little influence). If lifespan is short, brand credit is barely established due to lack of experience. Brand equity is primarily dependant on current determinants of brand imagery.

An iceberg is a appropriate metaphor to reflect the consumer’s view of a brand (Fgure 3). The brand imagery is the section visible above the waterline. How consumers perceive a brand is manifested in Figure 4.

Brand credit is the part under water. It is a complex mixture of many factors, such as competence, confidence, reliability, tradition etc. Brand credit is measured by

*    brand likeability

*    brand confidence

*    brand loyalty

Brand credit cannot be influenced directly, but only via brand imagery [There are strong correlations between vividness (0,55), imagery appeal (0,71) and brand credit.] and it has considerable influence on brand’s success in market. To improve brand credit a vivid, appealing brand imagery must be created (Figure 5).

The basis for successful, long-term brand management is the awareness of brand identity in the consumers view. Brand identity must be systematically drawn up and documented, so that discussions and actions can be based on a common accepted foundation. The icon "brand steering wheel" provides an ideal system for this purpose (Figure 6). It is the quintessence of a brand status survey.










Thomas Andresen, icon Business Consulting, Germany
Thorsten Muller, icon Business Consulting, Germany


E - European Advances in Consumer Research Volume 3 | 1998

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