Linking customer‐based brand equity with brand market performance: a managerial approach

Abstract

PurposeThe purpose of this paper is to attempt to bridge a gap in literature by defining and operationalizing specific brand equity constructs, and testing the relationships between customer‐based brand equity and brand market performance. Current literature has focused on building and conceptualizing brand equity, there is no consensus on how it should be measured and what constructs should be included in the measurement process.Design/methodology/approachThis study was conducted in two phases: a consumer‐level analysis; and a brand‐level analysis. A total of 6,410 observations have been identified (sample size consists of 5,598 usable observations). The second phase involved analyzing the data at the aggregate brand level. Analysis included testing hypotheses on the correlations between customer‐based brand equity constructs and brand market performance. finally, detailed market and country‐of‐origin analyses are presented for managerial considerations.FindingsResults from the consumer dataset have been averaged by brand (a total of 17 brands covering 76 percent and 75 percent of market shares in both economy and luxury markets). At the consumer‐level, structural equation modeling was conducted to test research hypotheses. Results varied according to consumer usage. Attitudinal loyalty and satisfaction were found the strongest predictors of brand preference and intention to purchase. At the aggregate brand level, correlation analyses supported the hypothesis that customer‐based brand equity constructs are correlated with brand market performance.Practical implicationsAnalyses at the consumer and brand levels revealed interesting results about the US automotive market and suggested important managerial considerations. Specific recommendations are offered in order to help companies prioritize their resource utilization and improve their performance in the market.Originality/valueThis study offers a new model that links customer‐based brand equity with brand market performance. It advances both academic and practical findings, and opens the door for new streams of research that link academic models with practical applications. It advances specific practical recommendations to companies and at the same time offers a reliable and valid academic model that could be applied on other industries and countries.