Towards an Integrative Perspective for Measuring Brand Equity: Implications for Brand Portfolio Management

Abstract

Brand equity is the ultimate measure of brand success. It has been intensively studied since 1988. An interesting debate started to emerge on whether brand equity should be thought of from a consumer-oriented or a market performance-oriented perspective. Current research recognized the confusion and disagreement in conceptualizing and defining brand equity, and they identified two opposing perspectives or schools of thought: the marketing perspective and the financial accounting perspective. While the two schools of thoughts disagreed on their definition and conceptualization of brand equity, each perspective advocated developing measurement tools that were consistent with their definition and conceptualization. It could be concluded that there is no consensus on the specific components of brand equity. This could be attributed to the subjective nature of certain aspects of brand equity. Yet, a more comprehensive definition and conceptualization of brand equity is urgently needed to satisfy two main objectives: 1) unifying future branding research on brand equity measurement; and 2) guiding practitioners to use one meaningful, comprehensive, valid, and reliable brand equity measure necessary for accurate comparisons between brands. This paper proposes a new conceptualization of brand equity that integrates both perspectives, to be used for measuring brand equity. This new conceptualization consists of two major constructs: brand-market performance and consumer-knowledge-response, whereby combining both constructs will lead to a more comprehensive evaluation of brand equity.