A strong brand, having high brand equity generates higher revenue for the company. Brand Equity, as evidenced, results from a strong mental association that the customer links with the brand. It can be considered as the sum of customers’ assessments of a brand’s intangible qualities. Therefore, it cannot be a true measure of the marketing efforts of a company, though it was perceived so long to be so. Customer Equity, of late, has been identified as a basis to build powerful customer-centric marketing programs, which are more effective in highly competitive business scenario. There are three drivers of customer equity—value equity, brand equity, and relationship equity. Today's turbulent business environment is in requirement of maximizing the value of a company's customer assets. This stresses further the importance of focusing on Customer Equity as a customer-centric approach, rather than on Brand Equity, basically a product-centered approach.
Table of Contents
1. Towards Customer Equity: should marketers shift focus from brand equity?
2. Abstract
3. Introduction
4. Brand equity revisited
5. Brand Equity from customer’s point of view
6. Customer based Brand equity (CBBE):
6.1 Brand Identity:
6.2 Brand Meaning:
6.3 Brand Relationships:
7. From Brand equity to Customer equity:
8. A research evidence showing the importance of customer equity concept: (Clancy & Kreig: 2009)
9. Why to focus so much on customer equity? Some evidences:
10. Conclusion:
Objectives and Topics
This paper investigates whether the increasing focus on customer equity represents a paradigm shift away from the traditional brand equity concept or if it serves as a necessary complement in a highly competitive and customer-centric business environment.
- The evolution of marketing focus from product-centered brand equity to customer-centered customer equity.
- Core components of the Customer-Based Brand Equity (CBBE) model.
- The three primary drivers of customer equity: value, brand, and relationship equity.
- The financial and strategic importance of prioritizing customer lifetime value over mass-market brand reach.
Excerpt from the Book
Brand Equity from customer’s point of view
Brand Equity, as evidenced, results from a strong mental association that the customer links with the brand. This association emanates from brand awareness, which triggers a memory linked to the brand. The attitude toward the brand, created out of this strong bond, develops into a strong liking or preference towards the brand over time. The preference, most of the times, may even go beyond any objective consideration of the product. Thus the preference gets biased on the basis of emotion and affect – how people ‘feel’ about a brand, and eventually generates brand equity.
According to Aaker(1991), brand awareness not only evokes a feeling of familiarity but also suggests a “presence, commitment and substance for the brand”. In purchase situations, brand awareness can take either of the two forms: recognition and recall (Rossiter & Percy: 1997). At the point of purchase, the ability to recognize a brand is the recognition brand awareness. In other purchase decisions, when the need for the product is already identified, the brand name has to be recalled from memory. It is called as brand recall. But in both the cases, the brand has to be ‘salient’ ie how easily the brand can be evoked from memory.
Summary of Chapters
Introduction: Outlines the shift in marketing focus from brand-centric to customer-centric strategies and defines the paper's intent to analyze this transition.
Brand equity revisited: Revisits the conceptual definition of brand equity as an added value based on mental associations and potential for profit.
Brand Equity from customer’s point of view: Examines how mental associations, emotional responses, and brand awareness contribute to the formation of brand equity.
Customer based Brand equity (CBBE): Details Keller's roadmap for building strong brands through four distinct steps and six brand-building blocks.
Brand Identity: Discusses the creation of brand salience as the foundation for establishing brand identity in the customer's mind.
Brand Meaning: Explores how functional performance and abstract imagery help establish a favorable brand image.
Brand Relationships: Describes the final step of brand resonance, where intense, active loyalty transforms customers into brand ambassadors.
From Brand equity to Customer equity: Argues that customer equity is a more precise measure of marketing success than traditional, product-focused brand equity.
A research evidence showing the importance of customer equity concept: (Clancy & Kreig: 2009): Presents research findings suggesting that leading brands are becoming more similar, making brand equity alone a weaker metric.
Why to focus so much on customer equity? Some evidences: Provides statistical evidence regarding customer retention, loyalty, and the high cost of acquisition.
Conclusion: Concludes that understanding the asset value of each customer is essential for competitive success in modern, data-driven marketing environments.
Keywords
Brand, Brand Equity, Customer Equity, CBBE model, Relationship Equity, Value Equity, Customer Lifetime Value, Brand Salience, Customer Retention, Marketing Strategy, Brand Loyalty, Brand Resonance, Consumer Behavior, Brand Identity, Brand Meaning
Frequently Asked Questions
What is the primary focus of this research paper?
The paper examines the shift in marketing strategy from a traditional product-centered "brand equity" approach to a more modern, customer-centered "customer equity" approach.
What are the central themes discussed in the work?
Key themes include the components of brand equity, the Customer-Based Brand Equity (CBBE) model, the three drivers of customer equity, and the financial necessity of focusing on customer lifetime value.
What is the primary research goal?
The goal is to determine if the move toward customer equity is a fundamental paradigm shift or merely a complement to existing brand equity theories.
What scientific or research method is utilized?
The paper is based on a comprehensive review of secondary research, incorporating industry studies, marketing models, and theoretical frameworks from established experts.
What topics are covered in the main section of the paper?
The main section covers the conceptualization of brand equity, the roadmap provided by the CBBE model, the transition to customer-centric metrics, and empirical evidence supporting the value of retention.
Which keywords best characterize this work?
Essential keywords include Brand Equity, Customer Equity, CBBE Model, Relationship Equity, Customer Lifetime Value, and Brand Loyalty.
How does the author define the relationship between brand equity and customer equity?
The author views customer equity as a more effective, customer-centric basis for marketing programs, suggesting it is a better measure for modern competitive business scenarios than brand equity alone.
What does the research by Clancy & Kreig (2009) suggest about modern brands?
The research indicates that leading brands in many categories are increasingly perceived as similar by consumers, which diminishes the relative power of brand equity as a standalone competitive advantage.
What are the three drivers of customer equity identified by Rust, Zeithaml, and Lemon?
The three drivers are value equity (objective utility), brand equity (subjective/intangible assessment), and relationship equity (the tendency of a customer to stick with the brand).
- Quote paper
- Malini Majumdar (Author), 2009, Towards Customer Equity: should marketers shift focus from brand equity?, Munich, GRIN Verlag, https://www.grin.com/document/138162
