Researchers have adopted different approaches to quantify or measure brand equity. Some of them, like Keller,2 Park and Srinivasan,5 and Yoo and Donthu3 used perceptual, or psychological, measures to measure brand equity. Kamakura and Russell7 used actual consumer and market behavior to arrive at brand equity. Aaker6 combines both market behavior-related measures and perceptual measures to provide a framework to capture brand equity. Below we provide the results of different studies (along with their critique) carried out over a period of time explaining different ways to measure brand equity.
According to Keller,2 brand image and brand awareness constitute brand equity. The study provided indirect and direct approaches to measure brand equity. The indirect approach attempts to assess the sources of brand equity in terms of brand recognition and brand knowledge. As the indirect measure is unable to capture the strength and favorability of associations, direct measures are employed. On the other hand, the direct approach measures brand equity directly by assessing the impact of brand knowledge on consumers’ response to the marketing program. Although the study contributes immensely to the literature by providing a mechanism to think of brand knowledge in terms of an associative memory network model, it does not explain the relationship between brand awareness and brand image, and has only provided a framework to measure these dimensions, not a concrete measure of brand equity.
Aaker6 introduced the concept of ‘brand equity Ten’, comprising 10 items spread across five dimensions, to measure brand equity. He did not mention a single measure of brand equity, but expressed it as a set of five dimensions: brand loyalty, perceived quality/leadership, associations/differentiation, awareness and market behavior. Brand loyalty was captured in two elements: the price premium and satisfaction/loyalty. Perceived quality/leadership dimension consists of two components: perceived quality and leadership. The third dimension comprises associations and differentiation measures. The fourth dimension is brand awareness, consisting of brand recognition and recall, and the last dimension is market behavior measures, consisting of market share and distribution depth of the brand. This study attempts to operationalize brand equity and create a standard measure of it that could be used across products and markets to measure brand equity. However, this study also provides only an indication towards a set of items that can contribute to brand equity. Nobody knows how and which of these items should be combined to capture brand equity. Whether these items are exhaustive and what their reliability and validity is are some of the other questions left unanswered.
Using perceptual dimensions from the studies of Keller2 and Aaker,6 Yoo and Donthu3 developed a multidimensional scale to measure brand equity across different products and markets. Their scale consisted of brand loyalty, perceived quality and brand awareness/associations as different dimensions to capture brand equity. But we do not know whether this scale is sufficient to explain brand equity or whether some more items representing additional sources of brand equity are required to be identified.
According to Park and Srinivasan,5 brand equity consists of two components: one is an attribute-based component and the other is a non-attribute-based component. Hence, brand equity is the sum of the attribute-based component and the non-attribute-based component. The attribute-based component is the difference between subjectively measured attribute preference and objectively measured attribute preference, and the non-attribute-based component is the difference between the preference of an individual towards a brand and his subjective attribute-based preference. This study provides an excellent method to capture brand equity and that too at the individual as well as aggregate level; however, acquiring an objective attribute rating from the experts is a somewhat tedious task and, secondly, as objective attribute ratings provided by experts are not really objective, these ratings may be influenced by their own biases.
Kamakura and Russell7 proposed a method to measure brand value using the actual purchase behavior of consumers. The actual purchase behavior was captured using the scanner panel data. This behavior reflects the ‘regular market conditions’ under which a brand is purchased. Therefore, the measure of brand value attained should be the actual brand value. The brand value was thought of as the value attached by the consumers to the brand ‘after discounting the current price and advertising exposures’. Brand value was considered to consist of two components, namely brand intangible value and brand tangible value. Brand tangible value was considered as a function of physical attributes, and the value not arising from physical attributes was termed brand intangible value. Brand intangible value consisted of the value derived by the consumer from brand name associations. This study aims to provide one of the best measures for brand equity, as it is based on actual purchase incidence. It should be borne in mind, however, that a particular brand could have been purchased as a competing brand was not available or a particular brand was purchased from a retail outlet with a limited range, as it did not stock the brand of choice. Further, this method cannot be used in countries where the presence of organized retail is meager.
According to Srinivasan et al,4 brand equity is ‘the incremental contribution per year obtained by the brand in comparison to the base product’. The authors assumed that the choice probabilities of an individual would be different for the branded and unbranded base product. The choice probability for the branded product would be higher than that for the unbranded base product. The incremental contribution of a brand for a particular person would depend upon the difference between the choice probabilities of a branded and non-branded version of the product. The brand equity for an individual was calculated as the product of customer i's total category-level purchase, brand j's contribution margin and the customer i's incremental choice probability. It was also conceptualized that the incremental choice probability would depend upon the difference between brand awareness, attribute perceptions and non-attribute preference for the unbranded and branded versions of the same product.
Over the years researchers have recognized Aaker's6 dimensions as sources of brand equity, assuming that these five dimensions fully and completely explain the construct brand equity. The literature shows that different researchers have defined, and therefore measured, brand equity differently. We feel that irrespective of the approach, triangulation mandates that all methods should measure the construct brand equity accurately.
In this study the brand equity is measured using conjoint analysis (which we propose is a better measure to capture brand equity) and also by using different dimensions identified by Aaker6 to ascertain the extent to which these sources of brand equity can explain brand equity.
Although this study uses the sources of brand equity as defined by Aaker,6 we feel that they need to be operationalized by further studying the available literature. The following section outlines how these constructs were defined and operationalized by different authors.
On the basis of these studies various dimensions have been identified that contribute to enhancing brand equity. A questionnaire was formulated based on these dimensions. These dimensions and the reasons for their incorporation in the questionnaire have been discussed below.