Brand, Identity and Reputation: Exploring, Creating New Realities ...

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Financial vs. Consumer-based Brand Equity A cross-cultural perspective Ulla Hakala, Turku School of Economics, University of Turku, Finland Vincze, Zsuzsanna, Umeå School of Business, Umeå University, Sweden Introduction Greatly as a result of the increasing M&A activity in the late 1980s and early-1990s, the awareness of the financial value of brands has increased, bringing along the concept of ‘brand equity‘. (Lindemann, 2010; Kapferer, 2004). The value of brands has indeed been recognized as one of the priorities in branding research which has also highlighted the importance of having a long-term focus within brand management (Koҫ ak, Abimbola & Özer, 2007; Keller & Lehmann, 2006; Wood, 2000). In accounting terms brand equity relates to the total value of a brand as a separable asset built over time, thanks to the investment of the business in it (Wood, 2000; Wright, Millman & Martin, 2007). There is, however, no clear consensus on how to measure brand equity, and from which standpoint (Koҫ ak et al., 2007). Basically, there are two perspectives to measuring brand equity: financial or firm-based brand equity and consumerbased brand equity. The consumer-based brand equity represents a bottom-up approach, examining the meaning of the brand and the value consumers place on it. This can also be called brand strength (Wood, 2000). The company-based viewpoint, on the other hand, is a top-down approach of measurement using information on the financial performance of the company. (Fetscherin, 2010) The approach focuses on outcomes, actual or notional business transactions, extending from efforts to enhance a brand‘s value to its stakeholders (Shimp, 2010; Wood, 2000). This specific value has been most prominently demonstrated by the ‗Best global brand‘ survey published in BusinessWeek with Interbrand annually since 2001. Rather than actual revenues, the survey incorporates expected earnings to encompass the potential strategic contributions and benefits of a brand to a company (Wright et al., 2007). Brands are intangible assets; according to the Interbrand survey, brands account on average for more than one-third of shareholder value. Looking at the top-10 brands on Interbrand‘s list, an interesting question arises: what brands are on the top in customers‘ top-of-mind list, and in different countries? By comparing the ranking of brands on Interbrand and among consumers, the purpose of this paper is to compare the financial brand equity with the consumer-based brand equity and to find out if there are cultural differences between the consumers‘ perceptions. The empirical research was conducted in the US, France, Finland, and Sweden. Convergence of cultures It has been predicted that the success of global brands is leading to colonization of world cultures by international corporate brands and demise of local cultures. The leading global brands are almost beyond exception American, and in reference to that, global cultural homogeneity is also called ‗Americanization‘ or ‗Westernization‘, suggesting that the companies with their global brands force Western lifestyles on consumers in other parts of the world. An interesting question arises: are cultures converging? Mooij (2010; 2003) argues that if there is convergence, it takes place at a macro level, such as convergence of demographic phenomena like graying populations. And the wealthier countries become, the more manifest is the influence of culture. Fundamentally, according to her, deeper-level cultural differences in consumer behaviour across countries are persistent. According to Mooij (2010), needs may be universal but core values, attitudes and motivations vary across cultures. Consequently, similar motives and arguments cannot be used in all marketing communications. Whether to standardize – for greater efficiency – or adapt the product to the cultural circumstances – for greater effectiveness – is one of the fundamental questions in global branding, and has been a debate point among academics for the last 50 years. On one hand, standardizing can yield economies of scale. On the other hand, companies should appreciate the differences among foreign markets and adapt their offerings to consumers‘ deeper values. A third view, the contingency perspective, is based on the idea that the best branding strategy varies depending on the situation (Agrawal, 1995). Measuring Brand Equity It is postulated that measuring brand equity (value) across cultures in multiple market environments can have significant managerial and theoretical value. To this end, this research will explore the awareness of brands and brand value in different nations and cultures, evaluate the effects of cultural differences, highlight important managerial implications, and suggest how brand equity (value) may impact company marketing strategies. Precisely, the purpose is to study the differences between financial-based brand equity and customer-based brand equity. The empirical study was conducted in the US, France, Sweden and Finland and consequently, the aim was to see if the top-of-mind perceptions differ from one culture to another. 104
For indicating brand equity, one of the ways Kapferer (2004) recommends is spontaneous brand awareness by which he means a measure of saliency, of share of the customer‘s mind when cued by the product. According to Aaker (1991; see also Ballantyne, Warren & Nobbs, 2006) there are two levels of awareness: the stimulus based brand recognition and the memory based brand recall. Herein, the focus is on brand recall: the consumers were asked to retrieve a brand name from memory without any reminders. Ultimately, it is a question of top-of-mind (TOMA) awareness or TOMA status where a particular brand is the first one that consumers recall when thinking about brands in a particular product category. (Shimp, 2010) Brands that are easier to recall stand a better chance of gaining entry into the consumers‘ consideration set, i.e. the pool of brands from which a choice is made (Ballantyne et al., 2006). Research setting US, French, Swedish and Finnish students were asked to list their top-of-mind brands in the following categories: beverages; computers; cell phones; cars; restaurants; media, and Internet services. By asking so, the idea was to see how similar the choices are compared to Interbrand‘s Best global brands as well to see if there are cultural differences in the equities. In order to keep group differences to a minimum, a homogeneous sample like students is considered valid and justified. Student samples are thought as superior samples in cross-cultural comparisons for establishing equivalence, controlling source of variation and isolating the cultural differences. (Koҫ ak et al., 2007) According to Hsieh (2004), there are two types measures employed in brand equity studies: attitudinal and behavioural. This study represents the former, focusing on brand awareness. Top-of-mind awareness does not tell about intention to purchase nor actual brand choice, i.e. behavioural tendency. If, however, we are to follow Keller‘s (1993) definition of brand equity according to which favourable brand associations lead to a positive response, i.e. purchase intention or actual choice, we are allowed to believe that a customer preferably buys his/her top-of-mind brand in the category. Major Findings If we are to measure brand equity by top-of-mind awareness of consumers, the results of this study indicate that the brand equities differ across countries. Different cultural conditions lead to different top-of-mind awareness. In the following Table, the top-of-mind brands in each examined product category in the four countries are presented. As discernible from the overall results, quite many of the consumers‘ top-of-mind brands are the same as on the Interbrand top-10 ranking, and differences between countries are scarce. In the beverages‘ category, Coca Cola is the number one brand in all examined countries except the US. The fact that in the United States Coca Cola is a fountain brand may have something to do with the result. The computer category is surprisingly unanimous within the countries. The highest ranked cell-phone brand on the Interbrand list, Nokia, is quite naturally the top-of-mind cell phone in Finland, as well as respectively Apple and Sony Ericsson in the US and Sweden. In the car category 3 , however, there is quite a lot of dispersion, and an interesting finding is that Mercedes Benz is the top-of-mind brand among the French students even though there are fairly big French car brands in the market. Also the fact that McDonald‘s is the on the top in the restaurants‘ category is an interesting result regarding France; for nearly 50% of the students it is the first restaurant in mind. The media category is the most ethnocentric: a country‘s own TV channel or newspaper was ranked first. Finally, Google seems to have gained ground in Europe in particular. Discussion Brands are created by the market but they must be managed by the company. In all markets, successful brand management begins with knowledge of the target market. The paper contributes to the understanding of cultural differences. The issue is important for business managers as the debate on standardization vs. adaptation is still ongoing. A brand‘s position in the market may be a factor underlying the results. There may be intense competition in the market or the product category is not considered as important in all the countries. Furthermore, the national-level predisposition toward imported brands, the length of time the brand has been in the market, brand distribution as well as marcom expenditures may have an effect on the results. These are issues that should be addressed in the future studies. It should also be noted that the results might have been different had the empirical data been gathered from different education levels and age groups as well as various geographic regions. Understanding brand equity from the customers‘ perspective needs more attention (Washburn & Plank 2001). This study took a look at the issue, asking consumers what brands they value in particular product categories. However, the paper is not able to answer the question how to build up and affect a brand‘s value to the customer, i.e. what kind of marketing activities are needed to make consumers respond favourably to a brand. 3 th The examined categories were given according to the Interbrand top-10 list of 2009 where Toyota was listed the 8 , the value of the brand being 31,330 $ million. In 2010 there were no automobile brands in the list. 105
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Book of Proceedings Brand, Identity
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Session 1.1 Emotional Branding in T
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p.31) consumers tend to those sourc
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Tables and figures Brand perception
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Malaysia‘s Global Halal Hub - ―
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Birds of a Feather Consume Sports T
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Session 1.2 How is Social Media, li
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2. Interviews made with the adminis
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Table-5 Facebook Members of Homeles
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content (UGC) or even direct intera
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Fierman, (1991) found that 47% of c
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Multiple Dimensions of Brand Identi
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Session 1.3 Corporate Identity, Cor
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CSR are the ideals and ethics of co
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Corporate Brand Identity Management
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To study the influence of B2B relat
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Antecedents And Consequences Of Bra
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22. Gurviez, P., and Korchia, M. (2
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Non-monetary factors, such as effor
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23. Holbrook, M.B. (2006). Consumpt
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Brand Extensions and Culture: The I
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avoidance tend to prefer more infor
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Virtual Internal Brand Communities:
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References 1. Algesheimer, R., Dhol
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associations based on their percept
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shift in the psychological contract
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Page 65 and 66: Uncovering ‗Meanings‘ through A
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Page 71 and 72: Keywords Brands, marketing, meaning
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Page 75 and 76: References 1. Aaker, D. (1991). Man
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Page 83 and 84: has been adopted and within this an
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Page 87 and 88: examine and reconcile existing lite
Page 89 and 90: Effects of Corporate Social Respons
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Page 93 and 94: 1989). But if the information avail
Page 95 and 96: An Inquiry into Corporate Heritage
Page 97 and 98: 3. Balmer, J. M. T., & Greyser, S.
Page 99 and 100: Research questions and methodology
Page 101 and 102: Building Corporate Reputation: A Di
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Page 107 and 108: Financial Brand Valuation: an exper
Page 109 and 110: Figure 1 Religiously Motivated Cons
Page 111 and 112: I Don‘t Like It! - Understanding
Page 113 and 114: Session 3.2 Advertising Agency Empl
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Page 117 and 118: The Life Cycle of Mavens Lynne Free
Page 119 and 120: Exploring the relationship between
Page 121 and 122: internal branding process. Internal
Page 123 and 124: proper branding strategy. With the
Page 125 and 126: Profiling the Image of Urban Busine
Page 127 and 128: Finally, the paper confirms the cau
Page 129 and 130: Table 3 Image differences according
Page 131 and 132: associated with the brand‖ (Aaker
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Page 137 and 138: Empirical Studies For both studies,
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Page 141 and 142: Co-branding places? Andrea Lucarell
Page 143 and 144: 12. Lucarelli, A., & Berg, P. O. (2
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Results The demographic profile ind
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use games consoles (Childwise, 2001
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Plenary Session 2 Brand Performance
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Uncles, M.D. & Kwok, S. (2008). Gen
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Brand Management Framework Empirica
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Coneptualising Branding in Indian P
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characteristics could be zeroed upo
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Concentrating on the actual practic
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ooking attractive in greater detail
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Session 7.2 Brand Personification a
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Importance of Country Image to Mega
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Table 1: Evaluative Responses for t
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To be Similar or Unique? Implicatio
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Brown, T. J., Dacin, P. A., Pratt,
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A brand-driven strategy oriented to
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Rheingold, H. (1993). The Virtual C
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A Framework for Public Sector Brand
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Conclusion Public sector organisati
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A strategic investigation into the
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There are also some changes in term
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Brand Hypocrisy Sanne Frandsen, Cop
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Table 1: Empirical Findings Theory
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Brand Governance in Social Networki
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Determinants Brand Orientation Va
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When Individual Experience becomes
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Impact of Storytelling on Consumer
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The Role of Communication in Establ
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Culture‘s Influence on Consumer P
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+ Top-Down Dynamic between Luxury F
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Analysis and results We assessed th
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An Exploration of Own Brand Retaile
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11. ETI 2010. Ethical Trading Initi
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When investigating unique significa
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Session 8.2 Closing the Gaps - the
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accomplishing reality rather than d
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Reddy, 1998, p.40). As a result, br
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Figure 2: Doves Real Beauty Billboa
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Literature review, as a complete re
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Segmenting McDonalds: Measuring Bra
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A simple eyeballing of the segment
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Segment 2 Segment 3 Segment 4 235
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Session 8.3 Brand Attitudes and the
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when preceded with the related conc
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What keeps smokers from quitting? U
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Table 1: Description of the cigaret
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Exploring differences in product at
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Based on the results some general c
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Data was collected by independent j
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Sonic branding: A review of literat
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How is green seen? Exploring the im
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were in evidence. The inability to
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Generally speaking, people use exte
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How Retail Banks Use Atmosphere to
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Actually, we don‘t feel constrain
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Introduction Reputation and Financi
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Chun, R. & Davies G. (2009). Employ
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Identity, Reputation and Organizati
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Introduction Factors Affecting Bran
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A quiet important approach then bec
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27. Gentry, C.R., ―Building on Br
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Together these issues have resulted
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elations. If the contact persons tr
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How do you Really Know? Exploring B
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Originality/value The psychology li
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asked ―did you see any of these c
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expressivity (Ω experts = 0,96 p
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Next are brand associations, also r
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Table 1: Selection of variables, it
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Special Session Issues in Brand Gov
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A Competance based Brand: Meaning a
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Session 12.4 Special Session Topic:
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Brand Meaning Co-Creation of Newcom
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Leonor Vacas de Carvalho, Évora Un
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Ronaldo Schutz, University of the A
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