Managing Brand Equity
LT N G N G B P . 6 E Q U I 0 M A A A1 /I 9 9 • R A N D 5 – 1 0 T Y
PEKKA TUOMINEN
Managing Brand Equity
ABSTRACT
The purpose of this study is to discuss and elaborate the main issues encountered in managing brand equity. In order to achieve this purpose, we first analyse the concept of brand equity; second, we provide a comprehensive framework for managing brand equity; and finally, we distinguish different ways to leverage and measure brand equity. The concept of brand equity emerged in the early 1990s. Brand equity can be regarded as a managerial concept, as a financial intangible asset, as a relationship concept or as a customer-based concept from the perspective of the individual consumer. The main asset dimensions of brand equity can be grouped into brand loyalty, brand awareness, perceived quality and brand associations. There are three alternative ways to leverage brand equity: first building it, second borrowing it, or third buying it. Brand equity can create advantages and benefits for the firm, the trade or the consumer. Key Words: Brands, Brand Equity, Brand Management
1. INTRODUCTION
The historical evolution of brands has shown that brands initially have served the roles of differentiating between competing items, representing consistency of quality and providing legal protection from copying. Apart from providing the offering with the badge of its maker, thereby indicating legal ownership of all the special technical and other relevant features that the offering may possess, the brand can have a powerful symbolic significance. The brand can in itself imply status, enhance image and project or augment lifestyle so that the ownership of the
PEKKA TUOMINEN, Ph.D. (Econ. & Bus. Adm.) Turku School of Economics and Business Administration • e-mail: pekka.tuominen.tukkk.fi
65
LTA 1/99 • P. TUOMINEN
brand becomes of value in its own right. Its accepted qualities can simplify the decision making process by reducing perceived risk while
PEKKA TUOMINEN
Managing Brand Equity
ABSTRACT
The purpose of this study is to discuss and elaborate the main issues encountered in managing brand equity. In order to achieve this purpose, we first analyse the concept of brand equity; second, we provide a comprehensive framework for managing brand equity; and finally, we distinguish different ways to leverage and measure brand equity. The concept of brand equity emerged in the early 1990s. Brand equity can be regarded as a managerial concept, as a financial intangible asset, as a relationship concept or as a customer-based concept from the perspective of the individual consumer. The main asset dimensions of brand equity can be grouped into brand loyalty, brand awareness, perceived quality and brand associations. There are three alternative ways to leverage brand equity: first building it, second borrowing it, or third buying it. Brand equity can create advantages and benefits for the firm, the trade or the consumer. Key Words: Brands, Brand Equity, Brand Management
1. INTRODUCTION
The historical evolution of brands has shown that brands initially have served the roles of differentiating between competing items, representing consistency of quality and providing legal protection from copying. Apart from providing the offering with the badge of its maker, thereby indicating legal ownership of all the special technical and other relevant features that the offering may possess, the brand can have a powerful symbolic significance. The brand can in itself imply status, enhance image and project or augment lifestyle so that the ownership of the
PEKKA TUOMINEN, Ph.D. (Econ. & Bus. Adm.) Turku School of Economics and Business Administration • e-mail: pekka.tuominen.tukkk.fi
65
LTA 1/99 • P. TUOMINEN
brand becomes of value in its own right. Its accepted qualities can simplify the decision making process by reducing perceived risk while
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