The Influence of Brand Awareness and Other Dimensions of Brand Equity [604845]

The Influence of Brand Awareness and Other Dimensions of Brand Equity
in Consumer`s Behaviour: the „ affordable luxury” Strategy

Alexandra Zaif
”Transilvania” University of Brasov
[anonimizat]
Alina Elena Cerchia
University „Valahia” of Targoviste
[anonimizat]

Abstract

Brand equity is well known for playing a fundamental role in consumer`s puchase decision,taking into
consideration the fact that customers will have a more positive response when facing a well-
known,familiar brand.
The purpose of this paper is to reveal the impact of brand awareness and other brand equity dimensions
such as brand loyalty,perceived quality and brand association on consumer`s behaviour; we will try
particularly try to determine in which measure the above-mentioned factors can influence customer`s
buying decisions.The study is based upon previous research studies conducted by other authors, as well
as a study case in which we will show the effects of various marketing strategies focusing on the
respective dimensions(brand awareness,brand loyalty,perceived quality and brand association) on
buyers` purchase decisions and their influence on the overall brand image(the study will be focused upon
luxury brands and their strategies to reach out and attract a larger number of consumers of wider
socio-economical backgrounds,by creatin,”affordable luxury”).
Keywords: Brand awareness, Brand Loyalty, Perceived quality, Consumer Behaviour
J.E.L. classification: M31
1. Introduction

Often considered one of the most valuable assets of companies, brands have been widely recognized
as a determining factor in facilitating consumers` choice during purchase decision-making, due to the
fact that consumers perceive a recognizable brand (which holds a powerful image in consumers’ `minds)
as trustworthy and ensures them that the respective brand will provide high standards of quality and
services, thus reducing the risk of purchase failure.
As stated by Keller (1993) a brand is more than an ordinary product or service, whereas brands can
have dimensions that differentiate them from other products, designed to satisfy the same needs. These
differences can be classified as product performance-related (rational-tangible) or related to what the
brand represents (symbolic, emotional-intangible).

Brands signal certain levels of quality to consumers and their value lies within their equity (Keller,
1993, Arvidsson, 2006), which is considered the core concept of marketing. Over the last decades,
extensive research focusing on the study of brand equity has been conducted and numerous theories and
definitions are encountered in published literature.
Viewed from a financial perspective, brand equity is a measuring tool for brand value, in terms of
asset evaluation for the balance sheet (accounting purposes) or for merger, acquisition or divestiture
purposes (Keller), or, in concise words, the financial value of the brand to the firm (Simon and Sullivan,
1993). However, the brand`s financial value is the final outcome of consumers` response the brand
(Christodoulides and de Chernatony, 2010).In other words, brand value, from a customer`s perspective,
represents the value consumers perceive or attach to a certain brand. This leads to the concept of
consumer-based brand equity ,which is, according to the opinions of many scholars, the most useful
manner which shows how brand equity can be built, measured or managed (Keller,2013).
Laying the foundations for consumer-based brand equity research, Aaker (1991) and Keller (1993)
developed two alternative brand equity theory approaches, both of them embracing a consumer
perspective.
Keller`s point of view is explicitly from a customer point of view, creating his own Brand Equity
Model, also known as the Customer-Based Brand Equity (CBBE)Model ; he defines brand equity as “the
differential effect that brand knowledge has on consumer response to the marketing of the brand. Also
Keller indicates that the source of consumer-based brand equity is brand knowledge (which is composed
of two elements: brand awareness and brand image).Brand knowledge is the first thought coming to a
consumer`s mind regarding a certain brand, or, more simply, a brand node in memory to which various
associations are linked. The dimensions that affect consumer response are the awareness of the brand
(recognition and recall of the brand in different circumstances) and brand image, consisting of strong,
favorable and unique brand associations.
An alternative model of brand equity definition is the one proposed by Aaker, consisting of a set
structured into five categories: brand loyalty, brand awareness, perceived quality, brand association and
other proprietary assets. Aaker (1991) defines his brand equity model as ,,a set of brand assets and
liabilities linked to a brand ,its name and symbol that add to or subtract from the value provided by a
product or service to a firm and/or to that firm`s customers’’. From the above-mentioned dimensions,
the first four are considered fundamental, are strongly inter-connected and play a major role in consumer
behavior, as it will be further explained in this paper. We will briefly define each brand equity,
dimension, analyzing the connections between them, the manner in which they influence one another
and their impact on brand equity.

2. Brand loyalty
Brand loyalty is the attachment or deep commitment to a brand, being acknowledged as one of the
main drivers of brand equity(Aaker 1991;Yoo et al.2000).Customer loyalty is one of the most valuable
assets of a brand, contributing to the growth of brand equity in multiple ways: reduced marketing costs,
trade leverage, attracting new customers(the word-of- mouth effect),by recommending the brand to
potential new customers ,resulting in an increase of brand awareness, and also of perceived quality
through reinsurance of the brand`s high standards. Loyalty also creates barriers against competitors,
giving the company time to respond to their treats; customer loyalty can provide security and
predictability of demand, resulting into loyal consumer`s willingness to pay premium prices for their
brand of choice (Aaker, 1991; Kotler and Keller, 2006), strengthening the hypothesis that brand loyalty
positively impacts brand equity.

3. Brand awareness
Brand awareness is considered a prerequisite tool in building brand equity, related to the strength of

a brand`s presence in consumer`s minds (Aaker, 1991) and their ability to identify the brand under
different conditions .The awareness of a brand name relates to the likelihood that it will come to mind,
and the ease with which it does so (Keller, 2013).Brand awareness incorporates brand recognition,
translated into consumers` ability to identify brand due to prior exposure, when given the brand as a cue
and brand recall, relating to consumers` ability to retrieve the brand when given the product category,
the needs fulfilled by the category, or other cues of this type(Keller,1993).
Brand awareness plays an essential role in consumer decision-making, firstly because it represents a
first step of including a brand into the consideration set, due to recognition or recall of the brand.
Sometimes, a minimum level of brand awareness may be sufficient for consumer choice, during low-
involvement decision settings, considering that consumers are likely to choose a well-known ,familiar
brand, especially considering that brands with resonance are trustworthy and the reason they`ve lasted
for such a long time on the market means they have a certain level of quality(Aaker, 1991; Bettman and
Parl, 1980; Hoyer and Brown, 1990; Park and Lessig, 1981).Secondly, consumer decision-making is
influenced by the way brand awareness affects the formation and strength of brand associations in the
brand image, as well as of perceived quality (Keller, 1993). High levels of brand awareness and a positive
brand image enhance brand choice, as well as brand loyalty,decreasing vulnerability when facing
marketing actions from competitors. Therefore, brand awareness positively influences brand
associations,perceived quality and brand equity.

4. Perceived quality
Perceived quality refers to consumer`s judgement and perception regarding a product`s overall
quality, superiority or excellence (Kelller, 2003; Zeithaml, 1988).The perceived quality dimension is
different from other related concepts such as objective (actual) quality, which measures the way in which
a product or service satisifies specific needs at a certain level, taking into consideration the technical,
verifiable, measurable natures of the respective products or services. Perceived quality cannot be
determined on an objective basis, because it represents a perception itself,and naturally, has a subjective
character and cannot be properly measured, because it involves consumer evaluation of a brand, taking
into consideration various attributes that they associate with quality, each of them perceived as an
important evaluation factor to different consumers; thus, quality is influenced by perceptions
(Catoiu&Teodorescu, 2004, Zeithaml, 1988; Richardson et al.1994). Given the fact that it is essential to
develop a positive brand image in consumer`s minds ,brand equity depends on perceived quality
(Farquhar, 1989) and can increase differentiation and overall quality superiority of the brand.Perceived
quality has a direct influence on brand awareness,because of certain customer evaluation factors such as
fine product presentation, design, powerful advertising strategies can influence perceived quality,
consumers tending to associate these attributes to high levels of quality. For example, when purchasing
cosmetic products (creams, moisturizers,etc.) women tend to evaluate the product by such factors;
therefore,when contemplating to purchase cosmetics, the brand name encompassing the respective
factors will come to mind, leading to higher brand awareness,and,in case of satisfaction, brand loyalty
.at the same time channeling other consumer`s interest towards the brand.Perceived quality allows the
producer to practice premium prices,and can be the basis for brand extensions: if a brand is highly
regarded within a particular context, it is assumed that that it will have high standards of quality in a
similar domain (Aaker,1991).

5. Brand associations
Brand associations can be related to the positive or negative information that comes in consumer`s
minds,connected to the brand node in the brain memory,reflecting what the brands stands for,what it
means for customers.(Emari et al.2012;Keller,1993).Brand association is connected to the brand name
,reflecting the brand`s image.Brand knowledge is distinguished by the favorability,strength and

uniqueness of brand associations,which play a pivotal role in creating the differential response that helps
build brand equity and strenghten the brand`s position on the market(Aaker,1991;Keller,1993;
Romaniuk&Sharp,2003).
Keller(1993) classifies brand associations into three categories,namely attributes,benefits and
attitudes.Attributes represents the consumer thoughts regarding the product or service (the service or
product`s characteristics) and what involves its purchase or consumption.Benefits imply the grade of
satisfaction of various needs offered by a product or service,or the personal value attached to its
attributes. Finally, brand attitudes ,defined as consumer`s overall evaluation of a brand(Wilkie,1986).A
consumer`s attitude towards a brand can influence consumer behaviour,especially in terms of brand
choice. Some customers can experience positive feelings during certain brand associations;as a result,the
positive attitude will be transfered to the brand. Brand associations form a strong basis for consumers`
purchase motivation,due to the fact that they display credibility and provide confidence.Brand
associations generates brand loyalty and also a better perception of quality. Along with perceived
quality,brand associations can lead to succesful brand extensions.

6. Brand extensions

Many luxury brands maintain their reputation through brand extension. A brand extension is the use
of an established brand name to introduce a new product or service from a different category. Luxury
brands use this strategy, along with diffussion brands, in order to reach a larger audience that hasn`t been
exposed to them. Retailers such as Christian Dior, Chanel, Givenchy, Louis Vuitton, Gucci, Burberry
or Marc Jacobs have stretched their lines from couture to cosmetics, fragrances, accessories or in some
cases,home design (Versace, Fendi, Hermes, Ralph Lauren, Armani). The main benefit relies on
transffering consumers`perceptions regarding a certain brand to the accesible products released under
the umbrella brand name.
Since these product categories are less expensive than apparel and handbags, more consumers are
likely to buy them so that they still feel like they are part of the brand experience. Experts believe that
this strategy is advantageous for luxury brands, since the likelihood of buying cosmetics, perfumes or
sunglasses that are luxury-branded is high (consumers are more willing to pay a premium price for these
items to get a chance to experience the brand) These options will enable companies to create a larger
customer-base, increase brand awareness and maintain loyal customers in unfavourable economic
developments.

7. Collaborative marketing

Partnerships between brands are becoming more and more utilised by brands as a marketing strategy,
in order to boost awareness,attracting new customers and improving brand image in a cost effectively
manner, combining two brand budgets and their marketing outlets
Brand collaborations have become very popular in the fashion industry,and are regularly and
commonly used by premium fashion houses, and are considered revolutionary in terms of strategic
marketing, being advantageous from both a brand and marketing point-of-view. The most relevant
examples of brand collaborations are the ones between fast-fashion retail giants teaming up with high-
profile designers. A succesful example of Brand Collaborationt-The H&M Designer Collaborations
Each of the H&M annual capsule collections has proven to be a successful brand collaboration that
brought value to both brands involved: H&M, the mass retailer with a strong customer-base, was able
attract fashion-conscious consumers, maintaining a low price point. The designers (starting with Karl
Lagerdfeld in 2004, and continuing with familiar names such as Stella McCartney, Roberto Cavalli,
Jimmy Choo, Lanvin, Balmain) were able to expose their brand to a larger audience. The collaborations
had numerous bennefits for both parties: for H&M, perceived quality was enhanced, while the
collaborator`s perceived quality wasn`t affected,due to the exclusivity of the limited-edition collection
and the high-demand for the products, which sold out quickly (caused by product association with the

luxury brand). Increased brand awareness served both parties: the advertising campaign for each capsule-
collection launched by H&M incorporate a multitudine of marketing strategies such as permanent
exposure through a variety of channels (social media, commercials, banners, video releases),celebrity
brand endorsement (a trending marketing strategy used to strenghten brand image -in consumer`s minds,
a product that is worn/used by a celebrity has higher perceived quality). Through social media, both
H&M and the collaborating fashion house engage both loyal and potential customers in taking part of
their capsule-collection experience,thus creating brand loyalty.
Although H&M doesn’t release results on its designer collaborations, in 2014, analytics company
Crimson Hexagon examined 171345 social media posts to measure e the impact of Alexander Wang x
H&M on consumer perception of the brand. The results are general positive sentiment toward H&M
accounted for 25 percent of the social media conversation the week the collaboration was announced
(April 13-19, 2014) and 34 percent the week the collaboration was released in stores (November 2-8,
2014), compared to an average of 10 percent over the nine month period the firm analysed (April 1, 2014
to December 31, 2014). Crimson Hexagon also parsed social media posts for “intent to purchase.” During
the week of the release, about half of the conversations contained intent to buy something, compared to
an average of 14 percent.
Needless to say, there are plenty of financial benefits for each partner. The luxury brand market was
also affected by the financial crisis, therefore brand collaborations represent a great profit source. Last
year, the H&M collaboration with Parisian luxury designer Balmain was the most successful in the retail
giant`s history: the collection sold in a couple of hours in some cities in less than an hour and had
customers forming quese 12 hours in advance before the release. Ulteriorly, pieces from the collection
appeared on the auction ssite e-bay.com, retailing at prices almost ten times bigger than the original
price(a blazer that was originally priced 400 £ sold out for 3300£). This will determine consumers to
purchase future collections. The mass-retailer also benefits from higher financial revenues ,but usually,
the main goal for the company is to improve their brand image and perceived quality, and to convince
other consumers to shop at their stores.

8. Conclusions

Brand equity can be developed, managed, and extended by improving its dimensions(brand loyalty,
brand awareness, perceived quality and brand associations). Any potential marketing action can affect
brand equity through the accumulated effect of the marketing-mix invested into the brand. A
recognizable, familiar brand (with high brand awareness) which holds strong, positive associations,is
perceived to provide products or services of high quality standards and is more likely to develop a
significant customer data base.as well as to maintain their already devoted customers(resulting in
increased brand loyalty). Marketing efforts which lead to more favourable responses from consumers
will affect brand equity in a positive way. Favourable consumer response and positive customer-based
brand equity can generate revenue growth, lowering of costs and higher profit.
Luxury brands are orienting themselves, nowadays, to marketing strategies focusing on
manufacturing products for the masses, also known under the term of „massification”, becoming
available to a larger range of customers with different socio-economic features,instead of focusing only
on the elite customers. The marketing strategies centered around massification have proven to have an
overall positive impact on brand equity, as well as on consumer behaviour.

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