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The brand concept
The usage of the term brand for marketing and business purposes originates from the brand marks that cattle would get in order to be able to identify the owner. And even with the commercial use of the term today, it still fulfills the basic function of marking ownership, as the brand can give information about who is the tenderer of the branded offering and clearly states that the brand is the brand-owners property (Egan, 2007 p. 82).
According to Kapferer (2004 p. 9) there is disagreement within scientific literature about the definition of the term brand, its measurement and its perspective. Several different definitions exist, there is dispute on how to measure the strength of a brand and which indicators to use in order to measure it. Regarding the perspective, there is on the hand the customer-based definition which orientates on the relationship between customers and the brand. On the other hand, there are asset-based definitions, which measure and define a brand as a separable asset and in terms of its monetary value. The author however argues that the asset-based view and the monetary value of a brand is simply a logical consequence of successfully building and managing a brand according to the implications of the customer-based definition and will therefore focus on the latter.
Kotler and Armstrong (2010, p. 260) name the concept brand equity as an opportunity to describe the strength of a brand, meaning that brand equity describes the impact a brand has on a customer regarding the response the branded product and it’s marketing.
Positive brand equity therefore means that consumers will prefer product of the respective brand over the products of other brands or unbranded products. Negative brand equity means that customers prefer the one of the latter two. Regarding the precise meaning of brand equity, Feldwick (1996) however summarizes three different approaches:
1. Brand equity as the value a brand has as an asset, either when being sold or when being listed in a balance sheet.
2. Brand equity as a measurement and indicator of the attachment that consumers have with the brand.
3. Brand equity as the depiction of associations has with a brand and the connected beliefs.
This again highlights the difference between the consumer oriented definition and the company/financially oriented definition of both brand and brand equity. As this thesis however deals with the brand as a factor that influences the sales performance of a product and the author argues that a brand as a financial asset is mostly a result of approaches 2 and 3, the financial perspective will be neglected.
Keller (1993) however separated the strategic aspects of brand equity from the financial aspects and conceptualized it from an individual consumer perspective. From this viewpoint, he developed customer based brand equity, a model which describes building a strong brand as a sequence which has four so-called stages of brand development. Each step has its own objectives, and being able to start with a step depends on the achievement of the objectives of the previous step. Due to this step by step structure, this model can be used as an easy to apply guideline for brand building and brand management. In addition to this fundamental benefit, using customer based brand equity as a structure for building up and managing a brand provides another advantage: Sirianni et. al. (2013) point out, that due to its structure and different components, each component of customer based brand equity can be assessed
individually and its evaluation among customers be measured. This makes customer based brand equity also applicable as a direct measure for customer’s responsiveness to the brand.
Customer based brand equity and theoretical constructs that have been built upon or derived from it have been applied and tested successfully within research. Buil et. al. (2013) for example point out that there is indeed a causal order in the creation of brand equity, as represented in the stages of brand development in Keller’s (1993) model and that the different stages/components of customer based brand equity positively influence each other. In addition to that, Buil et. Al. (2013) point out that brand equity has a positive influence on the price premium customers are willing to pay, that it is a significant predictor of consumer’s positive response and that strengthening brand equity is a vital strategy in order to improve a company’s market position.
Within literature, several studies that use the model of customer based brand equity in order to develop a branding model for a special type of branding exist. Hsu et. al. (2012) for example used the customer-based brand equity model and related theories and models in order to create a valid and reliable branding model for upscale hotels. Konecnik & Gartner (2007) used customer based brand equity in order to develop a empirically verified branding model for destinations. In addition to that, they also imply that the different dimensions/stages of customer based brand equity are strongly interrelated and that they all are of importance for building up customer based brand equity. These studies are on the hand not transferrable to the branding of car modification companies, due to the earlier mentioned special brand constellation. On the other hand however these studies show that the concept of customer based brand equity is flexible and can be adjusted to the needs of specialized branding without compromising its validity and reliability.
Washburn et. al. (2004) examined the effects which brand alliances have on the customer based brand equity. Brand alliance in this case is a collective term referring to joint promotions/complimenting brands, dual branding, meaning two separately branded products are offered in conjunction and co-branding, meaning different brands work together to create a new product. Their study revealed, that regardless of whether two brands with high equity, one brand with high and one brand with low equity or two brands with low equity were paired, the brand equity was higher than when the brands were evaluated separately. Despite the fact that due to the earlier explained differing brand constellation and missing cooperation this finding is not directly transferable to modification brands, it can give implications about how for example the modification brand could benefit from the brand equity of the base brand.
As the above explanations show, Keller’s model of customer based brand equity provides a structured step-by-step guideline for building up a strong brand which at the same time makes the strength of the brand, meaning the brand equity measurable. Also, its applicability, measurability and also flexibility have been verified in several studies. Therefore the author has decided to uses this model as a base framework in order to adjust it and make it applicable to the modification brand – base brand constellation. However, in order to be able to do so, first the concept and its structure and components should be described.
Brand knowledge
According to Keller , customer-based brand equity is described as the effect that brand-knowledge has on the marketing of the brand while “brand knowledge is the key to creating brand equity, because it creates the differential effect that drives brand equity” (2008, p.51). In order to describe it, he uses the associative network memory model, viewing memory as a network of nodes, which represent stored information or concepts that are connected by links which represent the strength that the association between the information or concept has. Brand knowledge is thereby defined as all the evaluative and descriptive brand-related information that is stored within the memory network of the consumer. This stored information can be of any type, such as abstract, contextual, visual or verbal (Keller, 2003, p. 596 & 2008, p. 51). Brand knowledge is divided into two components, brand awareness and brand image.
Brand image
The term brand image was first introduced by Gardner and Levy (1955) in the article “The product and the brand” in 1955. Their deliberations were based on that “Basic to many of the problems of advertising and selling is the question of the consumers’ attitude toward the product and particularly their conception of the brand” (1955, p. 33). They pointed out that the image that a consumer associates with the brand of a product can vary regarding its clarity, complexity and intensity and that the notions the consumer has about the brand do not necessarily reflect the real nature of the product. But according to them, these factors still influence the decision whether the consumer purchases a certain brand or not. By noting that existing quantitative and qualitative research would only cover superficial reasons for consumers’ decisions for a certain brand, they encouraged to take social and psychological factors into account, thereby placing the subject within the field of consumer behavior. This approach has been applied by for example Chernev, Hamilton & Gal (2011, p. 67) and Lam et. al.(2010).
Bird et. al. (1970) later examined the relationship between the brand image and the usage of the brand and used the simple definition “attitude about a particular brand”.
This definition has subsequently been applied within the research of for example Stern et. al. (2001, p. 209) and Jacoby (1976, p. 335).
Gensch (1978, p. 384) described the brand image as an abstract concept that incorporates the impact of promotion, reputation and peer evaluation, defining it as the expectations the customer has. He examined the empirical measurability of the image and pointed out the influence that the image can have on perceptions and preferences.
Furthermore, he portended the fact that the image can lead to a gap between the customers’ expectations and perceptions. This research has been acknowledged by for example Hsieh et. al. (2004, p. 252).
Dobni & Zinkhan (1990) however analyzed 28 different studies that dealt with the topic and noted that the definition of brand image had been unstable over time and that there was disagreement about its operationalization. They identified the essential elements of brand image in order to give a theoretically founded definition. According to them, the term brand image describes what concept the consumer holds of a brand. It is formed through reasoned or emotional interpretation by the customer. The brand image doesn’t evolve from the physical, technical or functional attributes of the product. It is based on and influenced by marketing activities, context variables, the characteristics of the perceiving consumer and his or her perception of reality. However, this definition can be seen as a more initial attempt to delineate the term, and different definitions with a different focus have evolved since then (Teichert & Schöntag, 2010, p. 371).
Wilson and Blumenthal (2008, p. 58) give a less theoretically grounded and more practical definition by defining brand image as the total picture of how consumers think of a brand and it being the result of what a brand promises to deliver and what it actually delivers. In addition to that they underline that a brand image is subject to constant change, as the comparison of what the brand promises and delivers is an ongoing process. Their book however can is not scientific but mainstream literature.
Franzen & Moriarty (2009, p. 19) point out that the term brand image is getting criticized as shallow and superficial due to alleged interchangeability with the concept of brand identity and accusations of image building being an attempt to manipulate the consumers mind. They however define brand image as “the generalized perception of a brand in people’s minds” (2009, p.19).
Keller (2008, p. 51) defines brand image in consistence with the associative network memory model as “consumers’ perceptions about a brand, as reflected by the brand associations held in consumer memory.
Although different definitions of brand image exist, and inconsistency and disagreement regarding these definitions has been acknowledged, the consumers perception is a recurring factor when assessing different definitions. Therefore, the previously stated definition by Keller will be used, as it is also a component of the model of customer based brand equity that will be applied within this thesis.
Brand awareness
In his educational textbook “Advertising Promotion and Other Aspects of Integrated Marketing Communications”, Shimp (2010, p. 38) describes brand awareness as the likelihood and easiness of a brand name coming to mind when a consumer thinks about a certain product category. According to him, brand awareness builds the foundation of customer based brand equity, as equity can only evolve if the consumer is aware of the brand. Therefore for a new brand the initial challenge is to achieve brand awareness, while for an established the goal should be to maintain high brand awareness.
Percy and Rossiter (1992, p. 264)on the other hand divide brand awareness into brand recall and brand recognition. Brand recall, happening prior to the purchase means that a consumer experiences the need of a certain category and the consumer recalls different brands from memory that could fulfill this need. Brand recognition on the other hand means that the consumer recognizes a brand at the point of purchase which then can stimulate the category need. It also means that the brand name does not necessarily have to be recalled, but that already the visual image of the packaging can stimulate a response to the brand. This definition has been used by for example Jansen et. al. (2012, p. 434).
Huang and Sarigöllu (2012) note that there is a scarcity of research on brand awareness. They however apply the definition of Keller (2008) in their research and find that there is a positive impact of brand awareness on brand equity and brand market performance.
Keller (2008, p. 54) also divides brand awareness into brand recognition and brand recall. He defines brand recognition as the consumers’ ability to confirm that there has been a prior exposure to the brand when being confronted with it. Brand recall means that the consumer remembers the brand when having a need that has to be satisfied by a product category to which the brand belongs to. Keller also lists up concrete advantages that brand awareness has. As in order to create a brand image a brand node has to be established within the consumers memory, brand awareness has a learning advantage. This is due to the fact that the nature of this node influences how easily additional brand associations are learned and stored by the consumer. A consideration advantage arises from the fact that brand awareness increases the possibility to be considered by the customer in order to fulfill a need. Brand awareness also has a choice advantage, as a high level of brand awareness can affect the choice among all brands that are considered in order to fulfill a need. This means that a consumer, possibly even despite the lack of any other associations with a certain brand chooses this brand simply due to brand awareness. As this definition is in line with and also more detailed than the other existing definitions, Keller’s definition will be applied within this thesis.
Building a brand based on customer based brand equity
The customer based brand equity model of building a strong brand consists of four stages that build on another (Keller, 2008, p. 59):
1. Brand identity: Ensuring that customers are able to identify the brand and associate it with a certain product category or need. The goal of this stage should therefore be to create deep and broad brand awareness.
2. Brand meaning: Establishing the brand meaning within the customers minds by linking brand associations with certain properties. This stage has the objective to create points of parity and points of difference for the brand. Points of parity are certain requirements that every brand has to fulfill in order to be considered by consumers in order to satisfy a certain need. Points of difference on the other hand are benefits or attributes that consumers associate with a certain brand and which they believe are a unique characteristic that no other brand possesses.
3. Brand responses: Evoke the appropriate response from customers towards brand identity and brand meaning. Therefore the objective of this branding stage is to achieve positive and accessible reactions from consumers.
4. Brand relationships: This stage has the objective to convert brand response into a strong and active loyalty relationship between the customer and the brand.
In order to structure the model and graphically depict it, Keller (2008, p. 60) divides it into six brand building blocks with rational stages of brand development on the left side and emotional branding objectives on the right side. As this depiction is helpful to visualize the theoretical model of customer based brand equity and therefore can also help to visualize how the factors brand connection and luxury branding can be integrated into the theoretical model, it will be shown in the figure below.
Brand salience
According to Ehrenberg et. al. (1997, p. 9), “Salience is broader than any single measure of brand performance. It depends on virtually all the different possible measures of performance correlating.” Putting this into an example in which Brand A possesses more brand salience than brand B, this would mean that for Brand A more consumers:
– Are familiar with or aware of Brand A by any means of measurable awareness
– Have Brand A among the Brands they frequently buy and/or might buy
– Would buy brand A if the brand they usually buy was unavailable
– Intend to buy and/or use brand A in the future
– Would choose brand A out of a variety of brands in a test
– Think that brand A has brand assurance ( e.g. after-sales service, availability)
– Hold positive attribute beliefs about brand A
– See it as value for money
– Talk more often and more intensive about brand A in discussions
– Are by any measurable means more loyal to brand A
– Are aware of brand A’s advertisements and able to recall them
This description however is criticized by Miller & Berry (1998) who describe the use of the term brand salience by Ehrenberg et. al. as differing from the use of most advertising and research professionals. They define brand salience as referring to the order in which brands come to mind when thinking about a certain category. Therefore their definition differs from the one of Ehrenberg et. al. as it deals more with attention and awareness than with attitudes. In addition to that they conclude that advertising has a limited impact on the brand image while it has an impact on the market share through increased brand salience.
Romaniuk & Sharp (2004) further distinguish brand salience from awareness and attitude and define it as “the propensity of the brand to be thought of in buying situations”. This propensity derives from the quantity and the quality of the network of information on the brand within the min of the consumer, referred to as the “brand’s share of mind”.
Keller (2008, p. 60) however equates and incorporates brand salience with brand awareness. According to him, brand salience measures the brand awareness meaning how often and how easy and in which situations the brand comes to a customer’s mind and how this recall is triggered. In addition to that, brand salience deals with to which extent the customer will see the brand as being able to satisfy certain needs and the likelihood of the brand coming to mind when having the need for a certain product category.
In order to complete the stage of brand identity, the objective of achieving deep and broad brand awareness must be fulfilled by creating brand salience. When referring to the depth of the brand awareness Keller means how likely and how easy a brand comes to the mind of a customer. The breadth of brand awareness means the variety of scenarios in which the consumer is confronted with a need that make the brand come to the consumers mind.
In order to actively create brand salience, a company needs to use promotional activities such as advertising, as this will create and increase brand awareness among potential customers (see for example Miller & Berry, 1998).
Brand performance
O’Cass and Ngo (2007, p. 871) define brand performance as the relative measurement of the success of the brand within the marketplace. This definition has been acknowledged and applied by for example Tuan (2014, p. 47) and Huang & Tsai (2013, p. 2028). Other authors, when using the term refer to the overall performance of the brand. This means its sales and profitability as the basic level of brand performance as well as other internal and external factors such as the understanding and support of the key values of the brand by the management and whether the brands positioning enables it to differentiate itself from competitive brands (Chernatony, 2010).
According to the customer based brand equity model of brand building however brands performance refers to how the product or service that is offered under the brand in question meets the customers functional needs. Therefore the products or services primary ingredients and supplementary features are assessed regarding different factors. For products these factors are reliability, durability, serviceability, quality of product delivery and installation and other product related services like customer training as well as aesthetic factors like the product design. For services these factors are the actual satisfaction of the customers’ needs by the branded service, its speed and responsiveness and the so called service empathy, meaning whether the service provider is seen as trustworthy, caring and acting on behalf of the customers’ interest. In addition
to that, for both products and services the price is a relevant performance factor, as customers may memorize brands in regard to their price (Keller, 2008, p. 64).
Brand imagery
According to Yuille and Catchpole (1977) imagery describes sensory or perceptual representations of memories, ideas and feelings and can even involve a recovery of past experiences. This definition has been acknowledged by for example Teichert & Schöntag (2010, p. 373) and MacInnis & Price (1987, p. 474).
Keller, when lining out the concept of brand imagery (2008, p. 65) is in line with that definition. He describes brand imagery as referring to more intangible aspects of the brand, meaning what potential customers abstractly think about a brand. Brand imagery also means that consumers deduce imagery associations with the brand deriving from direct experience or indirectly through external sources of information like word of mouth or advertising. He points that there is a variety of intangible brand imagery associations that can be linked to the brand, but highlights four main ones:
User profiles: Describes the mental image of actual or idealized users (users referring to either persons or organizations). This association might be based on demographic factors such as gender, age, race and income or more abstract psychographic factors such as attitude, possessions, social issues or political views.
Purchase und usage situations: Relating to the associations that consumers have about the situations in and conditions under which they can or should purchase and/or use the brand. This can be related to the channel (possible point of purchase, category or specific), time (e.g. time of day, day of the week, season), location (e.g. at home, outdoors) and the type of activity with which the brand is associated to be used at (formal or informal).
Personality and values: This refers to the brand itself rather than the personality and values of the consumer. Brand personality as such is a topic for itself, with a number of different definitions and interpretations (Franzen & Moriarty, 2009, p. 235). Therefore rather than lining out the different definitions and interpretations which would go beyond the constraints of this thesis, a basic and principal definition by Franzen & Moriarty will be compared to the use of the term within the brand building model of customer based brand equity. Franzen & Moriarty give a basic definition of brand personality as “a projection of human traits onto a brand, through which people can determine their relationship toward that brand and can maintain a relationship with it”. Keller’s application (2008, p. 66) of the term is in line with that definition. He points out that influenced by experience or marketing actitivities, the consumer might have a mental image of the personality of the brand being for example modern or old-fashioned. What is of special relevance for this thesis is the fact that when purchasing cars brand imagery and personality are important to the decision and consumers often choose a brand that has a brand personality that is consistent with their self-concept (Keller, 2008, p. 67).
History, heritage and experiences: This refers to associations that the consumer might have by recalling past experiences with the brand. These experiences can be individual and personal, or shared with others and for example be related to marketing aspects of the brand, such as the product or package design or the country of origin.
Brand judgments
With brand judgments, Keller (2008, p. 67 f.) refers to the opinions and evaluations of the brands by customers. These evaluations and believes derive from the associations that customers have with brand performance and imagery. Any type of judgment of the brand by the customer is possible, but there are four main ones:
– Brand Quality: The attitude of the consumer towards the perceived quality of the brand and its delivered customer value and satisfaction.
– Brand Credibility: The extent to which the customers see the company or organization behind the brand as credible. This credibility is divided into three dimensions: Perceived expertise (Brand seen as competent, innovative or even market leader), trustworthiness (Brand seen as dependable and considering the customers interest) and likability (Brand seen as fun, interesting and worth spending time with)
– Brand Consideration: Describes to which extent the customers actually consider buying the brand. This is based on how personally relevant customers find the brand and depends largely on the creation of strong and favorable brand associations.
– Brand Superiority: The extent to which customers see the brand as unique and better than other brands.
Brand feelings
With brand feelings, Keller (2008, p. 68 f.) refers to the emotional reactions and responses to the brand by customers. This includes what feelings related to the brand are evoked within customers, how the brand affects the feelings of the customers about themselves and the relationships with others, the intensity of these feelings and whether they are positive or negative. The six most relevant brand-building feelings are:
– Warmth: Feelings of calm- or peacefulness, sentimentality, warm-heartedness or affection are evoked by the brand.
– Fun: Feelings of amusement, joy, playfulness etc. are evoked by the brand.
– Excitement: Consumers feel energized through the brand and perceive the experience related to the brand as something special.
– Feelings of safety, comfort and self assurance are evoked by the brand, in certain cases even ruling out feelings of worry or concerns.
– Social approval: The use of the brand by consumers gives them the feeling that they are looked upon favorably by others
– Self-respect: By consuming the brand, consumers get a better feeling about themselves and feelings of pride, accomplishment or fulfillment are evoked.
Brand resonance
With the brand building block brand resonance, Keller (2008, p. 72) describes the relationship and the level of identification of the customer with the brand. Brand resonance can be characterized by two dimensions: The intensity or depth of the psychological bond that the customer has with the brand and the level of activity to which this bond leads the customer. These two dimensions can be divided into four categories which will be lined out below.
Behavioral loyalty:
Keller (2008, p. 72) assesses behavioral loyalty according to two factors: Repeat purchases and share of category requirements. This is in line with an approach to behavioral brand loyalty by Ehrenberg (2000) which is applied for example by Romaniuk & Nenycz-Thiel (2013, p. 68). Repeat purchases are defined as how often in which amount a customer buys a certain brand within a specific timeframe. Share of category requirements describes which share of purchases within a certain product category is accounted for by the brand. According to Keller (2008, p. 72) behavioral loyalty is required but not enough in order to produce brand resonance, as it might derive from factors like the product being the only one available, accessible or affordable.
Attitudinal attachment:
In order to create resonance, a strong personal attachment is required. This means that the customer should not only have a positive attitude towards the product, but see the brand as something special and hold it in the highest regards. This attitudinal attachment is created through marketing programs and products or services that is more than satisfying for the customer (Keller, 2008, p. 72).
Sense of community:
According to Bagozzi & Dholakia (2006, p. 45) a brand community describes a “…group of consumers with a shared enthusiasm for the brand and a well-developed social identity, whose members engage jointly in group actions to accomplish collective goals and/or to express mutual sentiments and commitments.” This definition has been acknowledged and applied by for example Stokburger-Sauer (2010, p. 347) who also points out that the brand community is beneficial for both the customer and the brand, as the customer is able to satisfy social needs while the brand enjoys the benefits of having a loyal customer who also advocates for the brand. Keller’s illustration (2008, p. 72) illustration is similar to that, but he also expands it in the way that he doesn’t limit it to the impact that customers as members of the brand community have on each other, but also includes employees or representatives of the brand. Furthermore he points out the positive impact of the sense of community on brand attitude and intentions.
Active engagement:
According to Keller (2008, p. 74) the most powerful manifestation of brand loyalty is the active engagement of customers with the brand, meaning that they are willing to spend time, money, energy or other types of resources on the brand in addition to the resources they spend on the actual purchase or consumption of the brand. This means for example joining a brand club, corresponding with other brand customers or representatives, visit brand websites etc. This leads to customers themselves advertising the brand and influencing the relationship to the brand within others.
Table of contents :
1 Introduction
1.1 The relevance of brands in the car market
1.2 Car modification companies
1.3 The car modification market
1.4 Identified problems
1.5 Preconceptions
1.6 Research problem and knowledge gap
1.7 Thesis purpose and research questions
1.8 Intended contribution
1.8.1 Theoretical
1.8.2 Practical
2 Theoretical framework
2.1 The brand concept
2.2 Brand knowledge
2.2.1 Brand image
2.2.2 Brand awareness
2.3 Building a brand based on customer based brand equity
2.3.1 Brand salience
2.3.2 Brand performance
2.3.3 Brand imagery
2.3.4 Brand judgments
2.3.5 Brand feelings
2.3.6 Brand resonance
2.3.7 Concluding remarks
2.4 Luxury branding
2.4.1 Luxury and luxury cars
2.4.2 Relevant factors of luxury branding
3 Critical remarks
3.1 Critical remarks regarding information on the car modification market
3.2 Critical remarks regarding customer based brand equity
3.3 Critical remarks regarding luxury branding
4 Methodologies
4.1 Research philosophy and approach
4.2 Practical methodology
4.3 Data collection
4.3.1 Interview design
4.3.2 Interview conduction and participants
4.4 Qualitative data and content analysis
4.5 Quality criteria for qualitative research
4.6 Ethical considerations
4.6.1 Voluntary informed consent
4.6.2 Risk of harm
4.6.3 Deception
4.6.4 Debriefing
4.6.5 Ethical issues regarding luxury
5 Empirical results
5.1 Overview of the car modification market
5.2 Coded answers of the respondents
5.3 Responses of the interview participants:
6 Analysis
6.1 Analysis and overview of the car modification market
6.2 Thematic analysis of the interview responses
6.2.1 Connection between the two brands within the brand building for car modification companies
6.2.2 Brand salience within the brand building model for car modification companies
6.2.3 Brand performance within the brand building model for car modification companies
6.2.4 Brand imagery within the brand building model for car modification companies
6.2.5 Brand judgment within the brand building model for car modification companies
6.2.6 Brand feelings within the brand building model for car modification companies
6.2.7 Brand resonance within the brand building model for car modification companies
6.2.8 Luxury branding within the brand building model for car modification companies
6.3 Integrating the brand connection and luxury branding into a brand building model
6.3.1 Assessing the base brand or brands
6.3.2 Building the customer based brand equity model of the modification brand
6.4 Revision of the customer based brand equity model
7 Conclusion
7.1 Theoretical contribution
7.2 Practical contribution
7.3 Limitations
7.4 Implications for future research
List of references
Appendix
Appendix A: First approach Email in English
Appendix B: First approach Email in German
Appendix C: German interview questions for Mr. Albert
