Sap Erp

Topics: Brand, Branding, Brand management Pages: 4 (795 words) Published: February 10, 2014
EUROPEAN INSTITUTE FOR BRAND MANAGEMENT

Model: Brand Equity
Type of model:
Author(s):
Domain:

Brand model (structure model)
David Aaker
Brand Equity

Figure 1: Aaker’s Brand Equity Model
In his Brand Equity Model, David A. Aaker identifies five brand equity components: (1) brand loyalty, (2) brand awareness, (3) perceived quality, (4) brand associations and (5) other proprietary assets. Aaker defines brand equity as the set of brand assets and liabilities linked to the brand - its name and symbols - that add value to, or subtract value from, a product or service. These assets include brand loyalty, name awareness, perceived quality and associations. This definition stresses ‘brand-added value’; however, his model does not make a strict distinction between added value for the customer/ consumer and added value for the brand owner/ company.

This model can be used to get to grips with a brand’s equity and gain insight into the relation between the different brand equity components and (future) performance of the brand. Apart from the five components, the model also

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EUROPEAN INSTITUTE FOR BRAND MANAGEMENT

reflects indicators (and/or consequences) of the pursued branding policy. It goes without saying that brand equity will rise as brand loyalty increases, brand name awareness increases, perceived quality increases, brand associations become stronger (and more positive), and the number of brand-related proprietary assets increase. The model also provides insight into the criteria that indicate to what degree actual value is created with both consumer and company due the pursued branding policy.

David Aaker’s Brand Equity Model defines the five following brand equity components:
1. Brand loyalty: the extent to which people are loyal to a brand is expressed in the following factors:
- Reduced marketing costs (hanging on to loyal customers is cheaper than charming potential new customers)
- Trade leverage (loyal customers represent a stable...
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