chapter 2 - Bentham Science

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74 Research Topics in Agricultural and Applied Economics, Vol. 2 Domingo Calvo Dopico BRAND EQUITY: CONCEPT AND COMPONENTS Brand Equity: Concept From the corporate standpoint, brand equity represents the additional monetary profits with regard to those which would be obtained by selling the product without that brand name (Srivastava and Shocker, 1991). If we believe that the product offers a functional benefit, and a brand is a symbol or name that increases its value, we can define the brand equity as "the value-added with which a specific brand endows the product" (Jones, 1996). The contribution from the Marketing <strong>Science</strong> Institute (1988) reinforces this concept when it defines it as "the set of associations and performance that consumers and distributors have of the brand, making it possible for this brand to achieve higher market shares and bigger profit margins than if the brand name did not exist, and which endows the brand with competitive, solid and distinguishing market advantages that are sustainable in the long term". Brand Equity: Components Existing literature has not only highlighted brand importance but also recognises the sources that enable brand equity to be created. The multidimensional nature on which the key papers are based has been recognised in the contributions from Aaker (1991, 1996) and Keller (1993). According to Aaker (1991) brand equity is conceptualised in a multidimensional way, based on five areas: brand awareness, perceived quality, the image or associations, loyalty and other proprietary assets such as patents or copyright, etc. Brand awareness includes the potential capacity of the consumer to recognise or remember the name of a brand within a certain category of product (Aaker, 1991). Keller (1993) pointed out that this factor is related to consumers’ capacity to identify the brand under different circumstances. Brand awareness represents one of the conditions required for a brand to possess equity. A further dimension is perceived quality. Perceived quality is defined as the technical superiority of a product or service that must be valued and perceived by the consumer Zeithmal (1988). Previous research has tied this variable to a superior differentiation of the brand, as well as a greater predisposition to pay a price premium (Netemeyer et al., 2004). Next are brand associations. Initially, the concept of brand image is associated only to symbolic aspects, without taking into consideration any of the functional aspects (Levy and Glick, 1973). Actually, brand image is the consumers' global perception of the same, including functional and symbolic associations. Based on this, brand image is defined as the set of associations relating to the brand and mentally organised in an orderly and coherent way. Associations may or may not reflect the objective reality (identity), but whichever the case they will influence the buyers’ decision (Kirmani and Zeithaml, 1993; Biel, 1992; Louviere and Johnson, 1988). The fourth dimension we look at is loyalty. Loyalty refers to the link between the customer and the brand. Numerous studies and research are showing that this is the variable that has the biggest influence on brand equity (Atilgan et al., 2005; Mohd et al., 2007). The source of loyalty is to be found in a purchasing or use experience, unlike notoriety, associations and perceived quality, which can stem from different perceived or real attributes, even if the consumer has never used the brand. However, this does not exclude the possibility that, at times, loyalty takes root before such an experience, as a result of the perceived quality or the associations of some of the brand's attributes. This means that these dimensions are correlated. The brand equity components would therefore be defined. However, we need to know the nature and meaning that each of these dimensions has for consumers in the case of the collective brand, as well as the weighting of each of these in brand equity, viz., the contribution each one makes to the final brand equity. To do this, we will look at both the general bases of brand equity that will be applied to the sector that concerns us as well as prior research that has been carried out to date. SOURCES OF EQUITY IN THE WINE SECTOR AND COLLECTIVE BRANDS Collective Brand A collective brand is the result of a collective effort of different individual producers. These producers combine their efforts in order to create a differentiated quality. An independent body verifies the existence of their exclusive and specific characteristics (e.g. climate, preparation method, type of grape, vintage, etc.) and guarantees the authenticity of those intrinsic properties. Brand simplifies the costs of searching for information and reduces the risk that the agent incurs on evaluating a large number of alternatives or individual brands (Dopico et al., 2009), such as the case of the wine sector. Simultaneously, the origin is the common union of all of these individual brands and represents
Territory Image and Notoriety as Sources of Equity Research Topics in Agricultural and Applied Economics, Vol. 2 75 the axis over which value is built. Because intrinsic attributes such as the type of grape, the harvest, the soil, the climate are unmistakably associated to the origin, and that there are other intangible or symbolic attributes such as know-how and tradition, which are also associated to the origin, we can state that the brand and the origin are the pillars of the collective brand. Moving on from this point, we will now use the already mentioned principles of brand equity and the collective brand, remarked on already, to find the fundamental sources of collective brand equity. Sources of Equity and the Wine Sector As already explained in the introduction, the dimensions of brand equity evoked by Aaker (1991) and generally accepted in marketing literature are a) awareness, notoriety or brand fame; b) associations or brand image; c) the brand’s perceived quality; d) loyalty towards the brand; and e) other assets belonging to the brand (patents, industrial registers, etc.). Literature has focused on examining the first four. A lot of attention is focused on research into brand equity and the capital of the region of origin (e.g. Terroir) in the wine sector. The main research has been the following: Spawton (1998; 1999); Nowak et al., (2002); Orth et al., (2005) and Nowak et al. (2006). These lines of research emphasized the importance of the equity and the creation of strong brand as the strategy to differentiate between wines (Spawton 1998; 1999); the creation of variables, such as rooms for wine-testing as well as the generation of positive experiences that can build brand equity (Nowak et al., 2002; 2006); or researching the factors with influence on the building of equity (price, social acceptance, emotional, environmental value, and human value). All of these studies, except that of Orth et al., (2005), focused on the research of individual brands –individual level. However, this research emphasizes the collective brand, not just the individual brand. In addition, it includes the importance of region equity, a very important dimension researched in one of these studies (Orth et al., 2005). In this case, as already mentioned, we are not going to analyse the individual brands but rather a brand that pools together the different individual brands and which is known as the collective brand. Awareness or Notoriety and the Collective Brand According to Aaker (1991, 1992) and Keller (1993, 2003), awareness or notoriety is related to the consumer’s likelihood of recognising or remembering a brand, and the ease with which it is done. In other words, awareness reveals the consumer’s capability to identify or remember a brand in different contexts or situations. On the other hand, many consumers may not be familiar with a product, in our case a specific wine, so the probability of a wine being chosen increases with the fame or recognition that they have of this collective brand. Viz., many consumers may be involved with a product, in our case a specific wine, so that the probability of a wine to be chosen increases with the notoriety that they have of the collective brand. This dimension will take on greater importance in the wine sector, where there are many competing brands. This means that, a priori, those collective brands that have greater notoriety will have greater likelihood of being chosen. Perceived Quality and the Collective Brand The perceived quality or intrinsic quality Zeithaml (1988) refers to the excellence of a product. So, the quality of a wine is defined by the intrinsic properties that endow products with quality, in our case wine. Landon and Smith (1997); Combris et al. (2000); Orth and Krska (2002) and Charters and Pettigrew (2003) have researched the indication of quality in the wine or in the purchase process. These will include the following: the type of grape, the colour of the wine, flavour, aroma, origin, harvest or year. However, from the consumer’s point of view, many of these are not easily perceived (Charters and Pettigrew, 2007). From the consumer’s point of view, in the case of wine, brand and origin are the most important aspects, not only to infer a specific quality-level but also to perform the action of purchasing Dopico and Blazquez (2004). That is, collective brand name will be associated to a specificlevel which can be recognised by consumers. Likewise, because the collective brand is built on the basis of the wine’s geographical origin, which is a quality indicator, and the brand a quality guarantee for consumers we can conclude that perceived quality is a source of brand equity. That is, those collective brand associated to a specificquality level will have a greater likelihood to be chosen or recognised. Indirectly, perceived quality will be greatly associated to the image of the territory. We will analyse this next.
Page 2 and 3: Research Topics in Agricultural and
Page 4 and 5: CONTENTS Foreword i Preface ii Cont
Page 6 and 7: ii PREFACE The aim of the e-book se
Page 8 and 9: iv Alexander Pailas Agricultural Ba
Page 12 and 13: The Italian Demand for Imported Vir
Page 14 and 15: 20 Research Topics in Agricultural
Page 18 and 19: New Trends in Consumer Needs Resear
Page 20 and 21: Consumer Knowledge of Animal Welfar
Page 30 and 31: Means-end Chain Analysis of Food Pr
Page 36 and 37: Global Crisis and Agricultural Publ
Page 42 and 43: Measuring Labour Productivity and M
Page 44: Index Research Topics in Agricultur

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