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Posts Tagged ‘Differentiation’

When the fashion house Maskit originally flourished in the 1950s and 1960s, no one probably thought about it as a brand; actually, not many back then thought about ‘brands’ in general, at least not in Israel of those years. Yet if we look at Maskit retrospectively according to the standards of brands known today, it would be acknowledged as a name brand in fashion. The contemporary fashion house of Maskit, revived after a long recess of two decades, has adopted not only the name but also the genuine styling ideation and design creativity of the former fashion house, thus deserving the ‘license’ to exist again. Maskit of our days has already been planned to be a luxury brand based on current knowledge in marketing and management.

Maskit was unlikely to be regarded as a brand in the 1950s-1960s for two conspicuous reasons: First, brands and their functions in modern marketing came to recognition some thirty years later; Second, Israel had a heavy-laden socialist economy with little competitiveness and a just nascent consumer culture (evolving through the 1960s). Furthermore, Maskit was not run in its prime years as a business enterprise: it started in 1954 as a government agency, turned a decade later (1964) into a governmental company. Only in the 1970s has the government loosened its hold on the company and gradually handed it over to private hands. However, that move has more than anything led to the decline and demise of the former Maskit in 1994.

Maskit is very much the story of the people who built it, then and now. The fashion house was founded in 1954 by Ruth Dayan almost incidentally, but with a great spirit for initiative. She was actually asked by government officials to help in identifying and creating employment opportunities in agriculture for new Jewish immigrants from the Middle East and North Africa. However, Dayan noticed that women from North African countries had a special talent and skills in weaving, sewing and embroidery; she also identified that men from Yemen excelled in jewellery. From there the idea of a fashion house employing immigrants started to take form. Since Dayan was not a fashion designer herself, she teamed-up with Fini Leitersdorf, nominated as the house chief designer. Together they developed a unique and genuine concept for fashion design that is at the same time multi-cultural and Israeli-native. Albeit the unusual circumstances of her enterprise, Ruth Dayan was by our current understanding an early woman entrepreneur in Israel of that period. The privatised company did not manage to continue in the footsteps of Dayan and Leitersdorf following their retirement from the fashion house in the late 1970s. Dayan who just celebrated in mid-March this year (2018) her 101st birthday also belongs nonetheless to the present of Maskit as she has helped in creating the newly born fashion house.

  • ‘Maskit’ can have multiple meanings, such as ‘image’ and ‘figure’, but the most appropriate meaning of this old Hebrew word in relation to what the fashion house does would be ‘ornament’.

Sharon Tal, a fashion designer, re-founded Maskit together with her husband Nir Tal in 2014, following more than two years of preparation, research and planning. Sharon Tal is the fashion house chief designer whereas Nir Tal (CEO) is in charge of the business side, specialising in entrepreneurship. Sharon Tal is a graduate in fashion design from Shenkar College of Engineering, Design & Art in Israel. She has subsequently worked in internship for Lanvin in Paris and for Alexander McQueen in London, where she acquired experience in international fashion design. At McQueen in particular she has learned and later advanced to specialise in embroidery, which would prove especially relevant and important for her professional and business venture of re-launching Maskit. On her return to Israel in 2010 she developed interest in starting a fashion house, and with the help of her husband Nir they discovered that the ideals or goals she has been aspiring for in a fashion house had existed in Maskit of Dayan and Leitersdorf.

Sharon Tal met with Ruth Dayan to talk about her interest in reviving Maskit, and it seems that they connected quite quickly — their first meeting extended into several hours, and they continued to work closely together on the initiative thereafter. It appears that shared thinking, the commitment of Sharon Tal to respect and maintain the original vision of Maskit, and the relevance of Tal’s specialisation as well as international exposure for continuing the heritage of Maskit have helped to convince Dayan that Tal was the right person to revive the fashion house. Ruth Dayan has given her blessing to the Tal couple, and has joined them in guidance during the research and planning process. Indeed the success of Maksit to re-establish itself depends greatly on reviving the heritage of Maskit, which Sharon Tal seems to fully recognise and appreciate, as she also respects the personal legacy of Ruth Dayan.

Maskit has made different types of garments in the days of Leitersdorf and Dayan. The concept that was special in many of them was mounting quality fabrics with motives of different ethnic cultures in embroidery.  They combined modern styles of the times with design traditions of embroidery embellishments “made by immigrants, as well as by Druze, Bedouin, Palestinian, Lebanese and Syrian women” [E1; also see Maskit.com: About]. They used for decoration articles like buttons (e.g., made from river stones and shells), some were initially brought by immigrants from their countries of birth. Maskit also produced jewellery, pillow covers, and other home artifacts. Silver and gold for jewellery were also used in decorating garments. The Hungarian-born Leitefsdorf created the integration of Western (European) practices, materials, and design styles known to her with ethnic styles of different communities she came familiar with in Israel. It was a unique way of adopting cross-cultural ethnic fashion styles and designs, fabrics and colours, and fitting them to the Israeli habitat (nature, climate, and contemporary culture), hence making their clothing and other products ‘Israeli native’.

  • Ruth Dayan provided employment to the immigrants and hence has given them an opportunity to assimilate in the country, as well as helping them to preserve their traditions. It should be noted, however, that immigrants fleeing from Arab countries were at great disadvantage with limited choices compared with more veteran immigrants, mostly from European countries, who formed the dominant classes in the young state. Dayan benefitted from belonging to the latter (‘elite’) classes and was close also to ruling political circles (married at the time to General and later Defence Minister Moshe Dayan), which further helped in obtaining funding.

Sharon Tal has the will and intention to proceed along the same guiding lines of design and craftsmanship set by Dayan and Leitersdorf. But the aim of the renewed Maskit is not to relive the past; instead, the Tals strive to fit the concepts and practices of former Maskit to contemporary styles and tastes of our days. Their priority is to keep the fashion house being Israeli-native, representing its culture and nature, but that also means expressing the multiple original ethnic cultures that make up the Israeli society. Their emphasis also appears to be on handwork production and authenticity in everything they do. These implied ‘values’ could be key to achieving high quality, uniqueness and luxury positioning. Authenticity is seen as a basis for differentiation of the fashion brand; it is also approached as a way of establishing luxury in the sense that authenticity has become hard to find in many areas, and in fashionable clothing in particular. Maskit may be authentic in the fabrics and other materials they use, the methods they apply, and the personal and attentive treatment and service they would provide to their customers (including personally customised designs).

Here are some aspects in which Sharon Tal works to continue the heritage of Maskit. The fashion house uses, for instance, soft fabrics as in the past (including silk, linen as well as leather). Weaving in-house is no longer feasible as in the past so quality fabrics are imported (e.g., from the same suppliers as those Lanvin and McQueen work with). Yet Tal still sees hope that it will be possible to acquire quality fabrics made locally, and perhaps produce at Maskit, in the future [H1]. Among the creations of Leitersdorf, one that has given Maskit greater fame is the desert coat (or cloak) — Sharon Tal designed a new ‘desert collection‘ that is “re-interpreted for today’s woman and her lifestyle”. One of the differences in the desert coat of today from the previous is in its being made in linen rather than wool [E1]. Embroidery designed and prepared in-house remains an identifying signature of Maskit. However, the renewed Maskit is ready to give more credit to artisans working with the fashion house, unlike in the past.

Sharon and Nir Tal are clear about their high ambitions. They want Maskit to be an international leading luxury fashion brand. It is meant to compete on a world stage against international fashion super-brands and challenge renowned fashion retail chains. They do not see their competition against fashion designers in Israel since they look forward to see more Israeli designers succeed and the whole fashion industry in the country developing (H2). That may sound a little co-descending but it can also be interpreted as saying that they hope Maskit will be able to pull the fashion industry in Israel up with them, as Maskit has done before in its earlier life. Accordingly, while they aspire to reach overseas, they intend to extend their efforts to global markets only after establishing Maskit in Israel [E1], and wish to be able to return Maskit into being an international fashion house operating from Tel-Aviv [E2], apparently keeping this home base as their anchor.

Maskit led by Dayan has already reached overseas, mainly to the United States. Since 1956 the fashion house presented in fashion exhibitions in New-York and other American cities. Their designs sold at department stores of Neiman Marcus, Bergdorf Goodman, and Saks Fifth Avenue, and they featured in leading magazines like Vogue. Sharon and Nir Tal expect to take the renewed Maskit in the same direction, and their emphasis at least at start also is on the US. Targets are shifting with time, however: many female customers turn to fashion chains to buy their casual and less costly clothing, then invest in more special dressing, higher quality and enduring, from name designers or specialty boutiques — the latter is where Sharon Tal seems to be aiming. As a luxury brand, Maskit would also target women who buy primarily from famed designers [H2]. In addition, Maskit of the past attracted in Israel tourists visiting the country and their relatives (i.e., mostly Jewish, American, and more wealthy). Yet, Israeli customers also used to buy gifts from Maskit, mostly when they wanted to bring or send them to their relatives abroad to leave a good impression on them. This should stay valid today as then. Maskit may also be able to tap a growing desire in Israel to return to its roots (‘authentic Israeli’) or to connect generations of customers wearing Maskit then and now.

The prices of Maskit to end customers are in the mid- to high-range, not for every occasion.  Their blouse shirts or dresses can be even expensive relatively for their categories. Evening dresses or gowns may cost, for instance, from just below 2,000 shekels ($570, €465) up to a few tens of thousands shekels (e.g., a dress with handmade embroidery in a unique technique was sold for 25,000 shekels or more than $7,000)[H2]. The price of a bridal dress may cost (selling only) in the range of 7,500 to 25,000 shekels (~$2,000-7,000)[H3]. Bridal dresses and customised dresses are the more expensive on offer. A blouse could cost, for example, 900 shekels (leather-trimmed tunic blouse — ~$260, €185)[E1]. The items of Maskit, according to Nir Tal, are made to appeal to women who are “pretty sophisticated, and appreciate the art of this clothing” [E1]. The prices are clearly set to support perceived high quality of garments, and in particular the investments in craftsmanship and dedicated handwork.

  • The flagship shop and studio of Maskit are located in the American-German Colony in the old city of Yaffo adjacent to Tel-Aviv. The place is designed to resemble an atelier of many years in business, and includes museum-like displays next to selling areas (also see photos in H3].

From the business perspective, the Tals approached the launching of Maskit as when creating a start-up, guided primarily by Nir Tal. They wanted the revival of Maskit to be special and different, following the model of revival of brands like Burberry and Lanvin [E1]; it had to reflect the significant achievements of Maskit as a leading fashion house in the country in past years [H2]. It meant that greater effort and resources would have to be invested in the initiative, as in a start-up. The Tal couple gained major funding from key Israeli industrialist Stef Wertheimer, together with his invaluable business wisdom. Launching Maskit as a start-up sounds reasonable in order to recruit the energy needed and concentrate financial and organisational resources in launching the business. However, soon enough comes the time that the fashion house is established and has to realign itself to run for the long-term. There are good indications Maskit could be near that time, if they have not passed it already, and it does not require that they should be established off-shore first. For the long-running fashion house, sustained creativity and innovation are important as much as persistence and discipline. Maskit would be wise not to push itself too far too fast, so as not to burn itself like a start-up.

  • Note: Start-ups in hi-tech, particularly in Israel, do not have too good a reputation in holding for long, hence it would not be wise to use them as a model if the fashion house desires to exist in the long haul and does not plan an ‘exit’.

The brand of Maskit in fashion was not properly valued nor appreciated by the establishment in Israel more than forty years ago (Ruth Dayan noted jokingly in interviews that she lives on a monthly pension of 5,000 shekels as a former worker of the Labour Ministry). But Dayan together with Leitersdorf have demonstrated that a successful brand can be created even without having their minds set to it. Sharon and Nir Tal now have the opportunity to show how high Maskit can reach, and to develop and strengthen its brand, with the much greater marketing and management knowledge and best practices they can now employ. Reborn Maskit is positioned as a luxury brand for women with fine taste in fashion and appeal to nostalgia. The brand’s distinction remains dependent on their commitment to an Israeli-native identity with original creative design in high quality, and keeping their base in Israel even as an international brand.

Ron Ventura, Ph.D. (Marketing)

References in Hebrew:

[H1] Interview with Ruth Dayan & Sharon Tal at Maskit Studio, Xnet, 18 October 2015 (Xnet is an online ‘magazine’ section of Ynet news website, fashion section)

[H2] The New Life of Maskit, Calcalist (economics and business newspaper), 13 December 2017

[H3] New home for Maskit fashion house, Xnet, 28 June 2016

References in English:

[E1] “A Ready-to-Wear Fashion House in Israel’s Ethnic Past“, Jessica Steinberg, Times of Israel, 26 May 2014

[E2] “How the Israeli Fashion Brand Maskit Delivers Authentic Luxury“, Joseph DeAcetis, Forbes’ Opinions, 16 May 2017

 

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The strength, impact and value of a brand are embodied, fairly concisely, in the concept of ‘brand equity’. However, there are different views on how to express and measure brand equity, whether from a consumer (customer) perspective or a firm perspective. Metrics based on a consumer viewpoint (measured in surveys) raise particular concern as to what actual effects they have in the marketplace. Datta, Ailawadi and van Heerde (2017) have answered to the challenge and investigated how well Consumer-Based metrics of Brand Equity (CBBE) align with Sales-Based estimates of Brand Equity (SBBE). The CBBE metrics were adopted from the model of Brand Asset Valuator (Y&R) whereas SBBE estimates were derived from modelling market data of actual purchases. They also examined the association of CBBE with behavioural response to marketing mix actions [1].

In essence, brand equity expresses an incremental value of a product (or service) that can be attributed to its brand name above and beyond physical (or functional) attributes. Alternately,  brand equity is conceived as the added value of a branded product compared with an identical version of that product if it were unbranded. David Aaker defined four main groups of assets linked to a brand that add to its value: awareness, perceived quality, loyalty, and associations beyond perceived quality. On the grounds of this conceptualization, Aaker subsequently proposed the Brand Equity Ten measures, grouped into five categories: brand loyalty, awareness, perceived quality / leadership, association / differentiation, and market behaviour. Kevin Keller broadened the scope of brand equity wherein greater and more positive knowledge of customers (consumers) about a brand would lead them to respond more favourably to marketing activities of the brand (e.g., pricing, advertising).

The impact of a brand may occur at three levels: customer market, product market and financial market. In accordance, academics have followed three distinct perspectives for measuring brand equity: (a) customer-based — an attraction of consumers to the “non-objective” part of the product offering (e.g., ‘mindset’  as in beliefs and attitudes, brand-specific ‘intercept’ in a choice model); (b) company-based — additional value accrued to the firm from a product because of a brand name versus an equivalent product but non-branded (e.g., discounted cash flow); financial-based — brand’s worth is the price it brings or could bring in the financial market (e.g., materialised via mergers and acquisitions, stock prices)[2]. This classification is not universal:  for example, discounted cash flows are sometimes described as ‘financial’; estimates of brand value derived from a choice-based conjoint model constitute a more implicit reflection of the consumers’ viewpoint. Furthermore, models based on stated-choice (conjoint) or purchase (market share) data may vary greatly in the effects they include whether in interaction with each competing brand or independent from the brand ‘main effect’ (e.g., product attributes, price, other marketing mix variables).

A class of attitudinal (‘mindset’) models of brand equity may encompass a number of aspects and layers: awareness –> perceptions and attitudes about product attributes and functional benefits (+ overall perceived quality), ‘soft’ image associations (e.g., emotions, personality, social benefits) –> attachment or affinity –> loyalty (commitment). Two noteworthy academic studies have built upon the conceptualizations of Aaker and Keller in constructing and testing consumer-based measures:

  • Yoo and Donthu (2001) constructed a three-dimension model of brand equity comprising brand loyalty, brand awareness / associations (combined), and perceived quality (strength of associations was adopted from Keller’s descriptors of brand image). The multidimensional scale (MBE) was tested and validated across multiple product categories and cultural communities [3].
  • Netemeyer and colleagues (2004) demonstrated across products and brands that perceived quality, perceived value (for the cost), and uniqueness of a given brand potentially contribute to willingness to pay a price premium for the brand which in turn acts as a direct antecedent of brand purchase behaviour [4]. Price premium, an aspect of brand loyalty, is a common metric used for assessing brand equity.

Datta, Ailawadi and van Heerde distinguish between two measurement approaches: the consumer-based brand equity (CBBE) approach measures what consumers think and feel about the brand, while the sales-based brand equity (SBBE) approach is based on choice or share of the brand in the marketplace.

The CBBE approach in their research is applied through data on metrics from the Brand Asset Valuator model developed originally by Young and Roubicam (Y&R) advertising agency (the brand research activity is now defined as a separate entity, BAV Group; both Y&R and BAV Group are part of WPP media group). The BAV model includes four dimensions: Relevance to the consumers (e.g., fits in their lifestyles); Esteem of the brand (i.e., how much consumers like the brand and hold it in high regard); Knowledge of the brand (i.e., consumers are aware of and understand what the brand stands for); and  Differentiation from the competition (e.g., uniqueness of the brand)[5].

The SBBE approach is operationalised through modelling of purchase data (weekly scanner data from IRI). The researchers derive estimates of brand value in a market share attraction model (with over 400 brands from 25 categories, though just 290 brands for which BAV data could be obtained were included in subsequent CBBE-SBBE analyses) over a span of ten years (2002-2011). Notably, brand-specific intercepts were estimated for each year; an annual level is sufficient and realistic to account for the pace of change in brand equity over time. The model allowed for variation between brands in the sensitivity to their marketing mix actions (regular prices, promotional prices, advertising spending, distribution {on-shelf availability} and promotional display in stores) — these measures are not taken as part of SBBE values but indicate nonetheless expected manifestation of higher brand equity (impact); after being converted into elasticities, they play a key role in examining the relation of CBBE to behavioural outcomes in the marketplace.


  • Datta et al. seem to include in a SBBE approach estimates derived from (a) actual brand choices and sales data as well as (b) self-reported choices in conjoint studies and surveys. But subjective responses and behavioural responses are not quite equivalent bases. The authors may have aimed reasonably to distinguish ‘choice-based’ measures of brand equity from ‘attitudinal’ measures, but it still does not justify to mix between brands and products consumers say they would choose and those they actually choose to purchase. Conjoint-based estimates are more closely consumer-based.
  • Take for instance a research by Ferjani, Jedidi and Jagpal (2009) who offer a different angle on levels of valuation of brand equity. They derived brand values through a choice-based conjoint model (Hierarchical Bayes estimation at the individual level), regarded as consumer-level valuation. Vis-à-vis the researchers constructed a measure of brand equity from a firm perspective based on expected profits (rather than discounted cash flows), presented as firm-level valuation. Nonetheless, in order to estimate sales volume they ‘imported’ predicted market shares from the conjoint study, thus linking the two levels [6].

 

Not all dimensions of BAV (CBBE) are the same in relation to SBBE: Three of the dimensions of BAV — relevance, esteem, and knowledge — are positively correlated with SBBE (0.35, 0.39, & 0.53), while differentiation is negatively although weakly correlated with SBBE (-0.14). The researchers reasoned in advance that differentiation could have a more nuanced and versatile market effect (a hypothesis confirmed) because differentiation could mean the brand is attractive to only some segments and not others, or that uniqueness may appeal to only some of the consumers (e.g., more open to novelty and distinction).

Datta et al. show that correlations of relevance (0.55) and esteem (0.56) with market shares of the brands are even higher, and the correlation of differentiation with market shares is less negative (-0.08), than their correlations with SBBE (correlations of knowledge are about the same). The SBBE values capture a portion of brand attraction to consumers. Market shares on the other hand factor in additional marketing efforts that dimensions of BAV seem to account for.

Some interesting brand cases can be detected in a mapping of brands in two categories (for 2011): beer and laundry detergents. For example, among beers, Corona is positioned on SBBE much higher than expected given its overall BAV score, which places the brand among those better valued on a consumer basis (only one brand is considerably higher — Budweiser). However, with respect to market share the position of Corona is much less flattering and quite as expected relative to its consumer-based BAV score, even a little lower. This could suggest that too much power is credited to the name and other symbols of Corona, while the backing from marketing efforts to support and sustain it is lacking (i.e., the market share of Corona is vulnerable).  As another example, in the category of laundry detergents, Tide (P&G) is truly at the top on both BAV (CBBE) and market share. Yet, the position of Tide on SBBE relative to BAV score is not exceptional or impressive, being lower than predicted for its consumer-based brand equity. The success of the brand and consumer appreciation for it may not be adequately attributed specifically to the brand in the marketplace but apparently more to other marketing activities in its name (i.e., marketing efforts do not help to enhance the brand).

The degree of correlation between CBBE and SBBE may be moderated by characteristics of product category. Following the salient difference cited above between dimensions of BAV in relation to SBBE, the researchers identify two separate factors of BAV: relevant stature (relevance + esteem + knowledge) and (energized) differentiation [7].

In more concentrated product categories (i.e., the four largest brands by market share hold a greater total share of the category), the positive effect of brand stature on SBBE is reduced. Relevance, esteem and knowledge may serve as particularly useful cues by consumers in fragmented markets, where it is more necessary for them to sort and screen among many smaller brands, thus to simplify the choice decision process. When concentration is greater, reliance on such cues is less required. On the other hand, when the category is more concentrated, controlled by a few big brands, it should be easier for consumers to compare between them and find aspects on which each brand is unique or superior. Indeed, Datta and colleagues find that in categories with increased concentration, differentiation has a stronger positive effect on SBBE.

For products characterised by greater social or symbolic value (e.g., more visible to others when used, shared with others), higher brand stature contributes to higher SBBE in the market. The researchers could not confirm, however, that differentiation manifests in higher SBBE for products of higher social value. The advantage of using brands better recognized and respected by others appears to be primarily associated with facets such as relevance and esteem of the brand.

Brand experience with hedonic products (e.g., leisure, entertainment, treats) builds on enjoyment, pleasure and additional positive emotions the brand succeeds in evoking in consumers. Sensory attributes of the product (look, sound, scent, taste, touch) and holistic image are vital in creating a desirable experience. Contrary to expectation of Datta and colleagues, however, it was not found that stature translates to higher SBBE for brands of hedonic products (even to the contrary). This is not so good news for experiential brands in these categories that rely on enhancing relevance and appeal to consumers, who also understand the brands and connect with them, to create sales-based brand equity in the marketplace. The authors suggest in their article that being personally enjoyable (inward-looking) may overshadow the importance of broad appeal and status (outward-looking) for SBBE. Nevertheless, fortunately enough, differentiation does matter for highlighting benefits of the experience of hedonic products, contributing to a raised sales-based brand equity (SBBE).

Datta, Ailawadi and van Heerde proceeded to examine how strongly CBBE corresponds with behavioural responses in the marketplace (elasticities) as manifestation of the anticipated impact of brand equity.

Results indicated that when relevant stature of a brand is higher consumers respond favourably even more strongly to price discounts or deals  (i.e.,  elasticity of response to promotional prices is further more negative or inverse). Yet, the expectation that consumers would be less sensitive (adverse) to increased regular prices by brands of greater stature was not substantiated (i.e., expected positive effect: less negative elasticity). (Differentiation was not found to have a positive effect on response to regular prices either, and could be counter-conducive for price promotions.)

An important implication of brand equity should be that consumers are more willing to pay higher regular prices for a brand of higher stature (i.e., a larger price premium) relative to competing brands, and more forgiving when such a brand sees it necessary to update and raise its regular price. The brand may benefit from being more personally relevant to the consumer, better understood and more highly appreciated. A brand more clearly differentiated from competitors with respect to its advantages could also benefit from a protected status. All these properties are presumed to enhance attachment to a brand, and subsequently lead to greater loyalty, making consumers more ready to stick with the brand even as it becomes more expensive. This research disproves such expectations. Better responsiveness to price promotions can help to increase sales and revenue, but it testifies to the heightened level of competition in many categories (e.g., FMCG or packaged goods) and propensity of consumers to be more opportunistic rather than to the strength of the brands. This result, actually a warning signal, cannot be brushed away easily.

  • Towards the end of the article, the researchers suggest as explanation that they ignored possible differences in response to increases and decreases in regular prices (i.e., asymmetric elasticity). Even so, increases in regular prices by stronger brands are more likely to happen than price decreases, and the latter already are more realistically accounted for in response to promotional prices.

Relevant stature is positively related to responsiveness to feature or promotional display (i.e., consumers are more inclined to purchase from a higher stature brand when in an advantaged display). Consumers also are more strongly receptive to larger volume of advertising by brands of higher stature and better differentiation in their eyes (this analysis could not refer to actual advertising messages and hence perhaps the weaker positive effects). Another interesting finding indicates that sensitivity to degree of distribution (on-shelf availability) is inversely associated with stature — the higher the brand stature from consumer viewpoint, larger distribution is less attractive to the consumers. As the researchers suggest, consumers are more willing to look harder and farther (e.g., in other stores) for those brands regarded more important for them to have. So here is a positive evidence for the impact of stronger brands or higher brand equity.

The research gives rise to some methodological questions on measurement of brand equity that remain open for further deliberation:

  1. Should the measure of brand equity in choice models rely only on a brand-specific intercept (expressing intrinsic assets or value of the brand) or should it include also a reflection of the impact of brand equity as in response to marketing mix activities?
  2. Are attitudinal measures of brand equity (CBBE) too gross and not sensitive enough to capture the incremental value added by the brand or is the measure of brand equity based only on a brand-intercept term in a model of actual purchase data too specific and narrow?  (unless it accounts for some of the impact of brand equity)
  3. How should measures of brand equity based on stated-choice (conjoint) data and actual purchase data be classified with respect to a consumer perspective? (both pertain really to consumers: either their cognition or overt behaviour).

Datta, Ailawadi and van Heerde throw light in their extensive research on the relation of consumer-based equity (CBBE) to behavioural outcomes, manifested in brand equity based on actual purchases (SBBE) and in effects on response to marketing mix actions as an impact of brand equity. Attention should be awarded to positive implications of this research for practice but nonetheless also to the warning alerts it may signal.

Ron Ventura, Ph.D. (Marketing)

Notes:

[1] How Well Does Consumer-Based Brand Equity Align with Sales-Based Brand Equity and Marketing-Mix Response?; Hannes Datta, Kusum L. Ailawadi, & Harald J. van Heerde, 2017; Journal of Marketing, 81 (May), pp. 1-20. (DOI: 10.1509/jm.15.0340)

[2] Brands and Branding: Research Findings and Future Priorities; Kevin L. Keller and Donald R. Lehmann, 2006; Marketing Science, 25 (6), pp. 740-759. (DOI: 10.1287/mksc.1050.0153)

[3] Developing and Validating a Multidimensional Consumer-Based Brand Equity Scale; Boonghee Yoo and Naveen Donthu, 2001; Journal of Business Research, 52, pp. 1-14.

[4]  Developing and Validating Measures of Facets of Customer-Based Brand Equity; Richard G. Netemeyer, Balaji Krishnan, Chris Pullig, Guangping Wang,  Mahmet Yageci, Dwane Dean, Joe Ricks, & Ferdinand Wirth, 2004; Journal of Business Research, 57, pp. 209-224.

[5] The authors name this dimension ‘energised differentiation’ in reference to an article in which researchers Mizik and Jacobson identified a fifth pillar of energy, and suggest that differentiation and energy have since been merged. However, this change is not mentioned or revealed on the website of BAV Group.

[6] A Conjoint Approach for Consumer- and Firm-Level Brand Valuation; Madiha Ferjani, Kamel Jedidi, & Sharan Jagpal, 2009; Journal of Marketing Research, 46 (December), pp. 846-862.

[7] These two factors (principal components) extracted by Datta et al. are different from two higher dimensions defined by BAV Group (stature = esteem and knowledge, strength = relevance and differentiation). However, the distinction made by the researchers as corroborated by their data is more meaningful  and relevant in the context of this study.

 

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