Authenticity and Equity in Luxury
An empirical case study on how Brand Authenticity can influence Brand Equity in the context of luxury brands
Supervisor: Prof. Dr. Stefan Markovic Hand-in: May 15, 2019 Number of Normal Pages: 115 Number of Characters incl. space: 253.594 Candidate 1:
Alessandra Bosco Student no: 115732
M.Sc. In Economics and Business Administration (cand.merc.)
Brand and Communications Management
Candidate 2:
Alessandra Masiero Student no: 116158
M.Sc. In Economics and Business Administration (cand.merc.)
Strategic Market Creation
Acknowledgments
We would like to express our kindest thoughts and gratitude by thanking everyone who contributed, supported and guided us throughout the entire Master Thesis process.
First and foremost, we would like to thank our Master Thesis supervisor, Prof. Dr. Stefan Markovic, Associate Professor in the department of Marketing at the Copenhagen Business School, for guiding and helping us throughout the entire process. We have highly appreciated his advices and feedbacks, as well as the freedom to come to any approach and conclusions, as long as solid argumentation for each is provided.
We would also like to thank the people who gave us some of their free time to participate in our study, with all their valuable insights that lead us to interesting findings.
We want to thank our family who always sustained us from day one. A big thank you also to all the friends who supported and stayed by our side in this journey. They all have encouraged us and cherished our hard work, our difficult moments and the happy ones.
Last but not least, we thank ourselves: thank you, thesis Partner, for your dedication, your passion, enthusiasm and perseverance. This was worth it!
To you all, we are endlessly grateful and we dedicate this work to you.
Thank you!
Alessandra Bosco Alessandra Masiero
Abstract
In the new brand era, that is shifting from the Relationship-focus between consumers and firms to a Stakeholder-focus, in line with the emerging service-dominant logic, the concepts of Brand Authenticity and Brand Equity have been widely discussed. The former is rather new and still deeply under-research, while the latter has been one of the most debated topics of the last forty years. Also, the luxury brands industry is one of the fastest growing industries, raising increasing attention from both media and firms. Despite the ongoing debates on these topics, Brand Authenticity and Brand Equity have never been analysed together in the context of the luxury industry, thus the present study.
With Louis Vuitton as brand chosen for the single-case study, this research presents two stages of qualitative data collection and analysis, which focus on two different Louis Vuitton target groups, namely prospect and current customers.
Findings show that the different dimensions of Brand Authenticity can impact Brand Equity on different levels. Communication has been reckoned as a key element in order to enhance and develop both constructs.
The authors also display future research that addresses fundamental and methodological limitations of the study, as well as practical implications for luxury brands managers.
Keywords: Brand Authenticity, Brand Equity, Luxury brands, Communication strategies, Stakeholder focus era
TABLE OF CONTENT
ACKNOWLEDGMENTS 1
ABSTRACT 2
1.0 INTRODUCTION 5
2.0 LITERATURE REVIEW 7
2.1PARADIGM AND THE CONTEXT OF THE STUDY 7
2.1.1THE EVOLUTION OF BRAND MANAGEMENT 7
2.2BRAND AUTHENTICITY 13
2.2.1THE RELEVANCE OF AUTHENTICITY 13
2.2.2CONCEPTUALISING BRAND AUTHENTICITY 14
2.2.3BRAND AUTHENTICITY DIMENSIONS 16
2.3BRAND EQUITY 24
2.3.1THE RELEVANCE OF BRAND EQUITY AND ITS CONCEPTUALISATION 25
2.3.2BRAND EQUITY AND THE COGNITIVE PSYCHOLOGY 26
2.3.3THE BRAND EQUITY TEN 27
2.3.4THE BRAND EQUITY PYRAMID 32
2.4LUXURY BRANDS 37
2.4.1THE RELEVANCE OF LUXURY BRANDS 37
2.4.2CONCEPTUALIZING LUXURY AND LUXURY BRANDS 38
2.4.3LUXURY BRANDS VS.NON-LUXURY BRANDS 40
3.0 RESEARCH GAP AND RESEARCH OBJECTIVES 43
3.1CROSSROAD:BRAND AUTHENTICITY,BRAND EQUITY AND LUXURY BRANDS 43 3.1.1CROSSROAD:BRAND AUTHENTICITY AND BRAND EQUITY 43 3.1.2CROSSROAD:BRAND AUTHENTICITY AND LUXURY BRANDS 46 3.1.3CROSSROAD:BRAND EQUITY AND LUXURY BRANDS 46
3.1.4OVERALL CROSSROAD AND RESEARCH GAP 47
3.2RESEARCH OBJECTIVES 48
4.0 METHODOLOGY 50
4.1EXPLORATORY RESEARCH DESIGN 50
4.1.1RESEARCH APPROACH 50
4.1.2RESEARCH DESIGN 51
4.1.3PHILOSOPHICAL CONSIDERATIONS 52
4.2SINGLE CASE STUDY 54
4.2.1LUXURY BRAND CASE:LOUIS VUITTON 56
5.0 DATA SOURCES 60
5.1SEMI-STRUCTURED INTERVIEWS 61
5.1.1I D 62
5.1.2SAMPLING 64
5.2FOCUS GROUP 68
5.2.1FOCUS GROUP DESIGN 68
5.2.2SAMPLING 71
6.0 DATA ANALYSIS 74
6.1GROUNDED THEORY 74
6.2CODING PROCESS 75
6.2.1FIRST STAGE: MANUAL ANALYSIS 75
6.2.2SECOND STAGE: OPEN, AXIAL AND SELECTIVE CODING 76 6.2.3THIRD STAGE: FROM SELECTIVE CODING TO THEORETICAL DIMENSIONS 79
7.0 FINDINGS 80
7.1BRAND AUTHENTICITY IMPACT ON BRAND EQUITY -PROSPECT CUSTOMERS 81 7.2BRAND AUTHENTICITY IMPACT ON BRAND EQUITY -CURRENT CUSTOMERS 92 7.3FINDINGS SUMMARY: AN OVERVIEW OF BRAND AUTHENTICITY ON BRAND EQUITY 104
8.0 DISCUSSION 106
8.1THEORETICAL CONTRIBUTION 106
8.2MANAGERIAL IMPLICATIONS 109
8.3LIMITATIONS AND FUTURE RESEARCH 112
9.0 CONCLUSIONS 114
10.0 REFERENCES 116
11.0 APPENDIX 125
11.1INTERVIEW GUIDE 125
11.2INTERVIEWS TRANSCRIPTS 130
11.3FOCUS GROUP GUIDE 215
11.4FOCUS GROUPS TRANSCRIPTS 217
11.4.1CURRENT CUSTOMERS FOCUS GROUP TRANSCRIPT 217 11.4.2PROSPECT CUSTOMERS FOCUS GROUP TRANSCRIPT 231
11.5CODING TABLES 240
11.5.1CURRENT CUSTOMERS – CODING TABLES 240
11.5.2PROSPECT CUSTOMERS – CODING TABLES 245
1.0 Introduction
Firms are becoming more and more aware of the fact that brands are one of their most valuable assets: therefore, this topic has raised increasing attention among academics (Merz, He and Vargo, 2009). In recent years, the service-dominant logic (S-D) depicted by Vargo & Lusch (2004) caused a shift in the way marketing and brand management studies are conducted.
Scholars have started to emphasise the fact that the value of brands is socially constructed by the interactions among consumers and all the other stakeholders involved, in line with what Merz et al. (2009) defines the Stakeholder-focus Brand Era. Nevertheless, most of the literature about branding is still based on the Relationship-focus Brand Era, which is the reason why in this study both Brand Eras are considered.
In this context, the concept of Brand Authenticity has started to gain increasing recognition among scholars, becoming a widely-discussed topic, even though a common definition of the construct has yet to be given (Napoli, Dickinson, Beverland & Farrelly, 2014; Napoli, Dickinson-Delaporte and Beverland, 2016; Beverland, 2005; Fritz, Schoenmueller & Bruhn, 2017). The authors of the present study selected as a starting point for their research the attributes of Brand Authenticity listed by Napoli et al. (2016) and Beverland (2005), which are Heritage, Quality, Sincerity and Craftsmanship.
On the other hand, Brand Equity has become one of the most debated topics among both academics and practitioners, starting from the 80s of last century (Ailawadi, Lehmann & Neslin, 2003; Baltas and Saridakis, 2010; Keller, 2001; Aaker, 1991). Within this study, the researchers focused their attention on one of the major conceptualisations of Brand Equity provided by Keller (2001), with some specifications from Aaker (1996a; 1996b)’s work.
Moreover, luxury brands management is obtaining increasing relevance in the modern society and economy, capturing more and more media and corporate attention (Kapferer, 2014). This industry is fast growing, and luxury brands could be identified as “one of the purest examples of brands” (Keller, 2009, p. 290).
As of today, there is an existing gap within the literature that involves these three above mentioned constructs. Previous research has only considered either one (e.g. Napoli et al., 2014, which deals with Brand Authenticity) or two of these constructs (e.g. Beverland, 2005, which
deals with Brand Authenticity and luxury wines), but the three elements have never been studied together.
Due to this gap in the existing literature, this study has the aim to provide a link between Brand Authenticity, Brand Equity and Luxury Brands, investigating the impact of the former on Brand Equity in the context of the luxury industry. More specifically, this research focuses on how Brand Authenticity is perceived by current and prospect customers and on how this could influence Brand Equity in both scenarios. Consequently, in this paper the following research question is analysed:
How does the perceived Brand Authenticity by current and prospect customers influence Brand Equity in the context of luxury brands?
Considering the limited empirical research within this field, this study follows an exploratory research design and has a qualitative focus. A single-case study approach has been selected as suitable method to answer the research question. The brand chosen for the study is Louis Vuitton, one of the most relevant brands in the luxury industry. The data have been collected from ten individual interviews and two focus groups, one for prospect and one for current. The sample chosen for both methods includes Millennials with different nationalities and with different experiences with the brand, i.e. prospect and current customers. The data collected have been analysed according to a grounded theory approach, where interviews and focus groups are transcribed and coded.
The results of the study show similarities between the two target groups selected: both groups confirmed the relevance of Brand Authenticity when dealing with luxury brands and named it as element that could influence Brand Equity. More specifically, the researchers found out that all four dimensions of Brand Authenticity considered in this study and cited above are relevant when assessing the value of a brand. An interesting element that emerged is the topic of communication: all the above-mentioned dimensions are relevant and influence Brand Equity, but customers feel the need of gaining information about those, directly from the luxury company.
At the end, the authors display an overview of the contribution that this study could provide to the existing literature. They also present some implications for luxury brands managers in order for them to focus on Brand Authenticity and enhance their Brand Equity, as well as the limitations of the study and the future research that could be implemented.
2.0 Literature Review
In this first section, the authors aim at providing the theoretical basis and context of the study.
It is structured in four macro paragraphs, as following described.
First, the authors provide the framework for the study in contemporary marketing and branding literature. The authors set this study in between Merz et al. (2009)’s two major “eras” of the Branding literature: the “Relationship Focus Brand Era” and the “Stakeholder focus Brand Era”.
Within this context, the authors will follow on presenting two branding constructs. On one hand, Brand Authenticity with a focus on four of the most recently identified dimensions (Napoli et al., 2016; Beverland, 2005). On the other hand, Brand Equity and the consumer-based Brand Equity model analysed by Keller (2001), with some specifications and additions from the
“Brand Equity Ten” model developed by Aaker (1996b).
Finally, in paragraph 2.4 the choice of the luxury industry as a context for the research will be displayed and justified.
2.1 Paradigm and the context of the study
The literature review begins with an overview of the context of the study presented. More specifically, after discussing the evolution of brand logic, two Brand Eras have been considered relevant to be mentioned in this research: the Relationship-Focus Brand Era and the Stakeholder-Focus Brans Era, as described by Merz et al. (2009).
2.1.1 The evolution of Brand Management
Along the last decades, an evident and radical evolution of brand management has occurred.
Firms realized that brands are their main assets and have an incredible power; therefore, they want to reinforce the quality and number of resources along their creation process. The new brand logic is process-oriented and sees an active collaboration and co-creation of the brand value between the firms and their stakeholders (Merz, He and Vargo, 2009).
This progression should be seen in parallel with the marketing evolution theorised by Vargo and Lusch (2004). They highlighted a shift from a goods-dominant (G-D) logic to a service-
dominant (S-D) logic. In the former logic, only the firm had the role to create value while customers were considered exogenous elements. The situation has changed with the S-D logic.
Three are the main features characterising it: first, service is considered the basis of exchange;
second, a process orientation is adopted instead of an output orientation; and third, customers (and other stakeholders) are now seen as endogenous elements during the creation of brand value (Merz et al., 2009).
In order to prove the evolution of branding logic, Merz et al. (2009) recognized four eras. Each of them has a different conception of how brands are seen and which is the primary focus of a brand’s value. These eras are: Individual Goods-Focus Brand Era (1900s–1930s), Value-Focus Brand Era (1930s–1990s), Relationship-Focus Brand Era (1990s–2000), and Stakeholder- Focus Brand Era (2000 and forward).
However, since the present study is positioned between the last two eras, the authors will focus the attention only on these two brand logics. The reason behind this decision can be easily explained. The relationship-focus brand era has been chosen because the models that will be considered and explained in the literature review are based on this era. Particularly, Brand Equity reflects the consumer base spirit typical of this era, where customers are part of the brand value creation process. However, the researchers had to take into account also the Stakeholder- focus brand Era for their empirical study, since the context within they operate the research belongs to the most recent era.
Relationship-Focus Brand Era
According to Merz et al. (2009), the Relationship-Focus Brand Era started around the 1990s, radically changing the driver of the brand value creation. Previously, the firm was the main creator of brand value. After the advent of this new era, both internal and external customers became operant resources helping in the co-creation of the brand value. Moreover, in the previous era brand value was embedded in the physical goods and thus decided through value- in-exchange. Starting from the 90s, the customer-firm relationship focus allowed to understand that brand value is determined through customers’ perceived value-in-use.
Customer-firm relationship focus: brand as knowledge
During the brand studies in the 90s, one of the scholars’ focus has been to examine the customer-firm relationship. Particularly, the analysis was address on how customers internalize
brand information in order to then understand the process of how brand value is generated (Kapferer 1992; Keller 1993). This change in thinking about brand value creation became more evident due to the rise of many models of Brand Equity. In particular, they highlight that brand value creation happens in the mind of customers. For example, Aaker (1996b) illustrated Brand Equity as a construction of brand assets and liabilities (i.e., brand loyalty, brand awareness, perceived quality, brand associations, and other proprietary assets) connected in the customers’
mind to a brand, its name and symbol. Keller (1993; 2001), elaborated the concept of Brand Equity from the perspective of the individual, providing the framework called Customer-based Brand Equity. This scheme allows to understand customer knowledge about the brand and what this knowledge means for a firm’s marketing strategy. This theory suggests the joint activity of customers and firms in the co-creation of Brand Equity and thus brand value. More details about Brand Equity will be given in section (see intra 2.3 Brand Equity).
Kapferer (1992) also contributed to demonstrate that the brand value is the result of a co- creation between customers and firms. He created a six-facet prism of Brand Identity, arguing that Brand Identity has a crucial role in the creation of brand value.
As a result, brand scholars in the 90s analysed in detail the customer-firm relationship and agreed that “brands were seen as representing knowledge (Keller, 1993). The focus of brand value creation was on the customers” (Merz et al., 2009, p.335).
Customer-brand relationship focus: brand as a relationship partner
In the late 90s - early 2000, scholars’ attention shifted from customer-firm relationship to customer-brand relationship (Aaker 1997; Fournier 1998; Gobe 2001). Particularly, they considered interesting to analyse how brands act in customers’ lives and which relationship customers establish with brands. Aaker (1997) states that brands have personality attributes and that people often associate brands with human personality traits. Fournier (1998) also, with the brand relationship framework, says that brands are important relationship partners. These studies, showing that brand value co-creation is relational, confirmed once again that the process orientation is preferred over the output orientation.
Brand researchers found that customers form relationships with brands that match their personality, utilizing the brands as a way of self-expression, self-definition and self- enhancement (Merz et al., 2009). Therefore, brand value is co-created thanks to affective relationships that customers form with their brands (Merz et al., 2009).
Firm-brand relationship focus: brand as a promise
Finally, brand scholars also looked at the firm-brand relationship, showing that not only external customers but also firm’s employees, considered internal customers, represent an important element in the co-creation of brand value (Merz et al., 2009). Brands were seen as a promise (Merz et al., 2009). De Chernatony (1999) agreed on this view, saying that brands represent the vision and the culture of the firm and, therefore, firm’s employee are included when shaping and representing the firm’s values. Similarly, King, 1991 confirmed the importance of employees in the value co-creation process, saying that they can also help firms to achieve a competitive advantage. Gilly and Wolfinbarger (1998), instead underlined that firms may not take into serious account the relevant role of the employees in their branding efforts. Employees cooperate with the firm’s customers both in a direct and indirect way, transferring a certain brand image at any touchpoint (Merz et al., 2009).
To sum up, in the relationship-focus brand era, both external and internal (i.e. employees) customers are part of the brand value creation process, creating a dyadic relationship between the brand and customers (Merz et al., 2009). Therefore, brand value is no longer established only by the firm and inserted in the physical goods (i.e. value in exchange), but it is the customer’s value-in-use. The brand logic moved from a goods-based perspective to a more customer-centric brand value definition (Keller and Lehmann, 2006). In addition, brands started to be seen with human attributes (Aaker, 1997) and to have a role in customers lives as a relationship partner (Fournier, 1998).
Stakeholder-Focus Brand Era
Since the early 2000s, brand scholars started to analyse the collective and dynamic course that characterized brand consumption within society (Merz et al., 2009). A brand was viewed as a continuous social process where brand value is co-created through stakeholder-based negotiations (Brodie, 2009; Muniz and O’guinn, 2001). Therefore, researchers moved to a new logic for branding named Stakeholder-focus Brand Era where not only customers (internal and external) but all stakeholders represent operant resources in the brand value co-creation (Iglesias & Bonet, 2012; Iglesias et al., 2013; Ind, Iglesias, & Schultz, 2013; Merz et al., 2009;
Muniz Albert m. & O’guinn, 2001; Vallaster & von Wallpach, 2013).
In support of this view, Ballantyne and Aitken (2007) stated that brands are dynamically created through social interactions and thus its value belongs to a wider group of opinion makers and stakeholders rather than only to its customers.
The view of the present era was also supported by brand communities (McAlexander, Schouten,
& Koenig, 2002; Muniz et al., 2001). A brand community can be defined as “a specialized, non- geographically bound community, based on a structured set of social relationships among admirers of a brand.” (Muniz et al., 2001, p. 412). In brand communities brand value is co- created by communities-based negotiations and symbolic interpretations of brand-related information (Muniz et al., 2001). In a brand community, members share experiences with the brands and enhance mutual appreciation for the products and brands (McAlexander et al., 2002). This brand communities might become strong advocates, believers, or even “diehards”
of the brand (Gangemi, 2006, p. 13).
However, in the mid-2000s, brand researchers started to argue that there are other forces, non- customer and non-brand-community related, that dynamically interact with each other and create brand value (Merz et al., 2009). For instance, in Jones's (2005) stakeholder framework of Brand Equity, the role of multiple relationships between the company and its various stakeholders was emphasized: “it is a multifarious construct that is affected by, or the sum of, a gamut of relationships” (p.10). Similarly, participatory market orientation frameworks (Ind &
Bjerke, 2007) and branding concept schemes (Gregory, 2007) supported this view, showing that the brand value is created by involving employees, customers, other stakeholders and that firms operate within a dynamic environment in which stakeholders are both diverse and dynamic (Gregory, 2007; Merz et al., 2009).
As a result, the stakeholder-focus brand era denotes that “(1) brand value is co-created within stakeholder-based ecosystems, (2) stakeholders form network, rather than only dyadic, relationships with brands, and (3) brand value is dynamically constructed through social interactions among different stakeholders” (Merz et al., 2009, p. 337) (Figure 1).
Figure 1. Relationship-focus brand era versus stakeholder-focus brand era Orientation
Source: Merz et al,. 2009, p. 337
To sum up, it can be said that brand management became a combination of the firms’ and stakeholders’ interests (Hatch & Schultz, 2008). This means that stakeholders can take the control of brand meaning, bringing value to the organization (Hatch & Schultz, 2008).
Thus, the authors did not focus their attention on the relationship-focus brand era where the brands were created solely through the dyadic relationship brand-customers, since they note how the customers and their perceived brand meaning are highly influenced by the interaction with a stakeholder-based ecosystem (Iglesias & Bonet, 2012; Vallaster & von Wallpach, 2013).
This is particularly true considering the latest technologies development and how the brands are today even more co-created also through online interactions.
Within this multiple stakeholder focus, Brand Authenticity and Brand Equity are two important elements. On one hand, Brand Authenticity is crucial because customers want to see that the brands have some roots and values as point of differentiation in a market that is really saturated with many offerings. On the other hand, Brand Equity is quite relevant as well and it is one of the most important concept in branding, because it captures very different measures that managers use to monitor brands success (i.e. customer satisfaction, loyalty, etc.). Particularly,
this analysis will be done within luxury brands because according to Keller (2009), “luxury brands are perhaps one of the purest examples of branding”.
With this framework in mind, in the next paragraph, the authors will describe Brand Authenticity.
2.2 Brand Authenticity
In the following chapter, the authors will present the construct of Brand Authenticity.
Particularly, it will be firstly delineated why this construct is relevant in the modern era, where brands need to differentiate themselves from competitors and where consumers search for continuity. After, Brand Authenticity will be conceptualised, with a focus on the four dimensions of it that the authors considered relevant for this analysis.
2.2.1 The relevance of authenticity
According to Grayson and Martinec (2004), consumers’ desire to see, purchase and own authentic brands has always been alive. However, the concept of authenticity has only recently become a central topic in organisation's marketing and brand strategies. This is the result of a rise in the number of consumers that absolutely want to purchase only authentic products and services (Fritz et al., 2017). Particularly, consumers demand for authentic brands because this helps them to express their authentic selves and to drive their personal identity projects (Napoli et al., 2016).
Fritz et al. (2017) have tried to delineate some of the reasons why authenticity has developed so fast. One explanation can be found in the increasing number of serious crisis over the last years, such as the big financial crisis happened in 2008. Another explanation can be found in some recent threats to society, e.g. climate change, recurrent firm scandals caused by poor managerial conduction, and globalization, phenomena that can make national and unique identities disappear.
In a time characterised by these frequent changes and ongoing uncertainty, individuals search and deserve something that they can trust and that can offer them continuity. Therefore, firms which maintain their brand authentic are considered as a certainty (Fritz et al., 2017).
The serious homogenization of the marketplace can be considered another reason that explains the increasing need for authenticity over the latest years (Beverland and Farelly, 2010). In particular, authenticity became a discriminant indicator of quality and differentiation for consumers (Fritz et al., 2017). Each brand can differentiate itself from others stressing the attention on those details that characterise and make it unique. Moreover, due to the internet and the new technologies, modern consumers are deeply informed and have an extended knowledge of both brands’ background and the latest trends. For these reasons, they ask for consistency and authenticity to the firms, rejecting dishonest brand’ behaviours (Holt, 2002).
2.2.2 Conceptualising Brand Authenticity
As soon as the authenticity thematic started to grow importance in the business field, many authors have started to talk about it in their papers, trying to conceptualise this phenomenon and to express their opinion and their own view of authenticity. For this reason, it is impossible to delineate and give a unified definition of Brand Authenticity (Postrel, 2003; Holt, 2002;
Brown, Kozinets and Sherry, 2003). In the following paragraph, various interpretations and definitions of Brand Authenticity will be presented in order to develop a comprehensive understanding of the subject.
The noun authenticity found its origins in the ancient Greek adjective αὐϑεντικός and in the Latin adjective Authenticus, meaning “worthy of acceptance, authoritative, trustworthy, not imaginary, false or imitation and conforming to an original” (Napoli et al., 2016, p. 1202).
Moreover, authenticity is generally associate to genuineness and reality of something (Napoli et al., 2016). Fine (2003) relates authenticity to sincerity, innocence and originality. Similarly, Boyle (2003) associate authenticity to attributes as natural, genuine, honest and simple.
The concept of authenticity exists in several disciplines and in all of them, it is primarily viewed as a subject-related behavioural attribute (Fritz et al., 2017). For example, in the field of philosophy, authenticity is related with moral behaviour. Individuals are considered authentic if they are honest, sincere and take responsibility for their actions. In the field of anthropology, authenticity is connected to the preservation of cultural norms and values. Therefore, it is linked with individuals’ “true self”. A similar subjective vision of authenticity is presented also in other fields. For example, in psychology, individuals are considered authentic only when their actions reflect their core-self or in sociology, authenticity is viewed as a socially constructed
phenomenon linked to expectations. Other disciplines where this concept appears are marketing research, business, medicine, physic and many others (Fritz et al., 2017).
Consumers can experience authenticity in different ways, based on their own background, interests and knowledge. Therefore, it must be emphasized that the assessment of authenticity is determined by individual’s judgments, personal identity and circumstances (Napoli et al., 2014; Grazian, 2003; Fritz et al., 2017). Particularly, there are two types of authenticity: one interpreted around indexical cues and one around iconic cues. In the first one, the consumer makes a factual connection between the object they are experiencing and the “spatio-temporal connection” (Fritz et al., 2017, p. 326), differentiating “the real thing from its copies” (Grayson and Martinec, 2004, p. 298). In the iconic typology instead, the object or the event is compared by the consumer with the iconic object, which represents how it “ought to look” (Fritz et al., 2017, p. 327; Napoli et al., 2014). This conceptualisation implies that authenticity in not only an innate attribute of the object but something that can vary according to certain evaluators in the context of the object. Therefore, this is extremely subjective (Napoli et al., 2016).
Authenticity is a calculation and decision-making benchmark that influences consumer choices (Liao and Ma, 2009). Thus, it is something experienced by each individual (Sheldon, Ryan, Rawsthorne, & Ilardi, 1997).
Authenticity includes elements intrinsic to the product or production process and subjective elements created by organizational members, consumers and other stakeholders. These last subjective features might involve myths and status classifications and might project on the product an image of authenticity that is partly true and partly rhetorical. This combination of real and stylized characteristics encourages the creation of an aura around the brand that allows its differentiation from the mass-market firms (Beverland, 2005). Therefore, according to Beverland (2005), authenticity can be defined as a “story that balances industrial (production, distribution and marketing) and rhetorical attributes to project sincerity through the avowal of commitments to traditions (including production methods, product styling, firm values, and/or location), passion for craft and production excellence, and the public disavowal of the role of modern industrial attributes and commercial motivations” (p. 1008).
Individuals can discover authenticity in products, experiences, events and also in brands (Beverland and Farelly, 2010). According to Bruhn, Schoenmüller, Schäfer, and Heinrich (2012), Brand Authenticity is defined as the perceived genuineness of a brand that is manifested
in terms of its stability and consistency (i.e. continuity), uniqueness (i.e. originality), ability to keep its promises (i.e. reliability) and unaffectedness (i.e. naturalness). Two years later, Napoli et al. (2014) agreed on this definition describing Brand Authenticity as a subjective evaluation of genuineness assigned to a brand by consumers.
2.2.3 Brand Authenticity dimensions
A review of the literature about Brand Authenticity has pointed out the multifaceted nature of this concept. Brand Authenticity is built around various dimensions. However, each author has identified and developed in his study only some dimensions, particularly the ones they believed to result more coherent with their definition of authenticity and more powerful to measure Brand Authenticity itself (Napoli et al., 2016).
For example, Bruhn et al. (2012) recognized four dimensions of Brand Authenticity called continuity, originality, reliability and naturalness. Beverland (2006) identified six attributes of authenticity, namely heritage and pedigree, stylistic consistency, quality commitments, relationship to place, method of production, and downplaying commercial motives. Morhart, Malär, Guèvremont, Girardin and Grohmann (2015), supported four Brand Authenticity dimensions called continuity, credibility, integrity, and symbolism. Napoli et al. (2016), instead, referred only to three principal components: quality commitment, heritage and sincerity. All these different scales share some common elements concerning how Brand Authenticity is conceptualised and calculated and how its construct reflects the literature.
However, it is important to underline that these dimensions have been selected for different contexts, therefore researchers should pay attention on their application.
Along the present study, Napoli et al.’s (2016) dimensions of Brand Authenticity will be used.
Firstly, because those are among the most recent dimensions conceived. Secondly, because these dimensions find a perfect application to the luxury case that will be analysed later (Keller, 2009; Amatulli, De Angelis, Pichierri and Guido, 2018).
Quality commitment manifests a firm’s effort and promise to consumer to preserve or increase the quality during the realization of the products. Commitment to quality is perceived by consumers as a fundamental feature when a brand claim to be authentic (Napoli et al., 2016;
Beverland, 2005). Moreover, this dimension reinforces consumer-brand relationship (Fournier, 1998) and Brand Equity (Keller, 2003). Heritage manifests the willingness of a brand to follow
its history and its connection with traditions and beliefs (Napoli et al., 2016). When a brand keeps his history alive and when it is reflected in the products, this special identity and aura add a sense of authenticity. Sincerity manifests consumers’ believes that firms behave with integrity and are guided by a genuine love of the product, rather than for a merely economic purpose (Napoli et al., 2016).
In addition to these mentioned dimensions, the present study will take into consideration also craftsmanship, a dimension of authenticity touched by different authors (Beverland, 2005;
Hitzler and Müller-Sterwens, 2017; Fine, 2003; Napoli et al., 2014; Kapferer et al., 2014). The authors decided to analyse also craftsmanship because it is considered a relevant aspect in the luxury business (Amatulli et al., 2018).
In the following paragraphs, a more detailed description of the chosen dimensions is presented.
Figure 2. Dimensions of Brand Authenticity
Source: Own representation based on Napoli et al., 2014; Napoli et al., 2016.
Quality commitment
Quality is one of the most relevant but at the same time complicated element of business strategy. Firms compete on quality, consumers seek for quality and markets are transformed by quality (Golder, Mitra, and Moorman, 2012).
According to Golder et al. (2012), quality is defined as “a set of three distinct states of an offering’s attributes’ relative performance generated while producing, experiencing, and evaluating the offering.” (p.2). Golder et al. (2012) in their paper explained that there are three
processes regarding quality. The first is the quality production process; it occurs when firms utilize attribute design and process design specifications to turn their and customers’ inputs into produced attributes. The second is quality experience process and here customers and firms interact; it occurs when customers experience the attributes that firms have delivered.
Customers interpret these attributes according to their knowledge, motivation, emotions and expectations. The third is quality evaluation process and it occurs when customers evaluate quality, comparing the perceived attributes with their expectations and forming judgments of quality and then satisfaction.
In Figure 3, the roles of firms and customers in the three different quality processes are described.
Figure 3. Quality processes
Source: Golder, P. N., Mitra, D., & Moorman, C., 2012, p. 6.
In the next paragraph, each quality process will be analysed more in depth. Particularly, the attention will be focus in the second and third process since the present paper is focused on a customers’ point of view and do not analyse firms’ actions during the quality production phases.
As explained before, the quality experience process is manifested when customers perceived the attributes delivered by firms. However, there is a distinction between delivered and perceived attributes since what is delivered might be perceived differently from customers.
Experienced attribute quality will change across customers according to their ideal expectations. Particularly, Golder et al. (2012) presented four advances in the quality experience process. The first is the experienced attribute quality that is “the performance of a delivered attribute to a customer’s ‘ideal’ expectation of that attribute” (Golder et al., 2012, p.5). Performance alone is not quality; comparison standards are necessary to evaluate quality
because you can then convert attribute performance into quality states. Experienced attribute quality is relevant for firms to calculate because it reflects a more precise evaluation of attribute performance than customers’ perceived attributes. The second literature extension provided by Golder et al. (2012), related to the quality experience process, is connected with the authors’
idea of a two-dimensional typology of attributes. They believe that the nature of an attribute can impact how accurately customers are able to perceive and evaluate its performance. The two dimensions are customer preference, which describe whether customers have homogeneous or heterogeneous attribute preferences, and measurement ambiguity, that describe whether an attribute’s performance can be calculated unambiguously or ambiguously. The third literature extension affirms that the way in which customers convert delivered attributes into perceived attributes is affected by both customers’ measurement knowledge and measurement motivation.
Finally, also customers’ emotion needs to be considered when analysing delivered attributes and perceived attributes. Emotion is defined as “the set of feelings evoked in customers during the quality experience process.” (Golder et al., 2012, p.9).
The main feature of the quality evaluation process is the transformation of the perceive attributes into a summary evaluation of quality, which is a compact judgment of the customer’s experience of the firm’s offering. This operation is impacted by customer’s emotions during the evaluation process. Customer expectations are a crucial element when looking at this process. Expectations are defined as “attribute performance reference levels a customer uses when perceiving and evaluating individual attributes.” (Golder et al., 2012, p.10). Customers can produce three distinct but interrelated typology of expectations about attribute performance:
‘will’ that reflects customer’s predictions based on a past experience with that firm offering,
‘ideal’ that reflects customer’s ideal preferences and ‘should’ that reflects customer’s beliefs on what the offering should deliver.
Heritage
Following Napoli et al.’s (2016) scale of Brand Authenticity, heritage is the second dimension that will be analysed in this paper.
In the marketing literature, the concept of brand heritage has been analysed for the first time by Balmer, Greyser and Urde (2006) in a study about the Swedish monarchy seen as a corporate brand. From that moment, this topic has been deeply analysed as it will be visible in the following.
In a postmodern market, characterised by dynamism, uncertainty and massive disorientation in consumption, it is important for firms to create and maintain strong relationships with consumers. The stress of attention on the concept of heritage represents a key method for companies to differentiate their offers in the market and gain an outstanding position in consumers’ mind (Urde, Greyser, and Balmer, 2007; Hakala, lätti and Sandberg, 2011).
Moreover, heritage offers a basis for stabilization and growth (Ballantyne, Warren and Nobbs, 2006). Heritage is “a transporter of historical values from the past to the present and future and an element that adds value in the eyes of consumer.” (Frizzo, Korelo and Prado, 2018, p.452).
Aaker (2004) also agrees on the fact that heritage is a fundamental source able to add value and differentiate brands. He advices firms to focus on heritage, seen as a “going back to the roots”
in order to create additional value, especially for company that are going through some problems. Moreover, heritage helps to maintain a brand’s identity, especially when firms launch new products that also enclose contemporary and leading-edge aspects (Aaker, 2004).
Frizzo et al. (2018) identified a relation between heritage and self-brand connection. The latter can be defined as “a continuum that indicates how much the consumer feels distant and disconnected from the brand at one end, and close and connected at the other.” (p.454). The idea of this connection is to show that, when brands have a heritage incorporated in their identity, with values and level of performance stable and reliable over time, the connection between the consumer and the brand is stronger. Moreover, they showed that when talking about brand heritage, consumers create self-brand connection mainly through sensorial and aesthetic pleasure that the brand offers. This function, named enticing the self, has been compared both with the function enabling the self and enriching the self. The first element reinforces the self through functional benefits; the second element reinforces the self through symbolic benefits represented by the ideal past, present and future self.
Banerjee (2008) identified four characteristics of an inherited brand. The first is history that represents its rich eventful past; the second is image; the third is equity that comprehends two subsets: a homogeneous and heterogeneous group of competences that simplifies progression and give superiority over competition; the last is brand expectancy that refers to the physical and emotional advantages that consumers get from the brand. However, except for history, all the other characteristics are quite difficult to measure (Hakala et al., 2011). For this reason, alongside the present analysis, this interpretation will not be taken into consideration. Instead, Urde et al.’s (2007) delineation of brand heritage elements has been selected.
Urde et al. (2007) defined brand heritage as “a dimension of a brand’s identity found in its track record, longevity, core values, use of symbols and particularly in an organisational belief that its history is important.” (pp. 4-5). These elements, that will be discussed in the following paragraph, are able to produce an image of quality, augmented trust, customer loyalty and stronger reputation that will eventually lead to a more vigorous Brand Equity (Hakala et al., 2011).
Figure 4. Elements of brand heritage
Source: Hakala, U., lätti, S., & Sandberg, B., 2011, p. 449.
Track record means that the company over time has continued and enhanced its values and promises. Doing so, the company has accumulated credibility and trust. Longevity reflects a consistent demonstration of other heritage elements (for instance track record and the use of history). Timeless is considered an important attribute even if the quality of timelessness takes years to maturate. Long-held and articulated core values, that guide behaviours and choices regarding policy and actions, form the base for the positioning declared as a promise in external communication. For some firms, continuity and consistency of core values determine and help them to define their corporate strategy, becoming part of the heritage. Use of symbols in the communications is considered another dimension of heritage brands. For example, logos, patterns or designs can be symbols that achieve their own identity, standing for the brand. The last element is history and this feature can determine how an organization operate today and it might also influence the choices for the future. However, it is important to underline that heritage and history are two totally different concepts in corporate branding contexts. History is part of heritage but cannot stands by its own to represent a brand in the contemporary era.
All brands have a story, but only some brands have a heritage. These concepts are related to the temporal dimension: history is grounded in the past, while heritage embraces three dimensions:
past, present and future. Heritage helps to make a brand relevant in the present and in the future.
The more these five elements are present in a brand, the higher will be its heritage influence (Urde et al., 2007).
Merely owning heritage does not in itself give power, but firms need to find the right way to exploit it in order to create additional value (Hakala et al., 2011). Companies with a heritage should benefit from it, taking it as an advantage to be different from competitors and therefore difficult to imitate (Napoli et al., 2016). Heritage can provide a solid ground for distinctiveness in positioning, which can create a competitive advantage, for instance by allowing the company to set higher prices and to have therefore higher margins, but also to retain customers that consider heritage meaningful (Urde et al., 2007). Finally, heritage also helps the brand to be more credible in the eyes of the consumers (Urde et al., 2007).
Sincerity
Following Napoli et al.’s (2016) scale of Brand Authenticity, sincerity is the third dimension that will be analysed along this paper.
The noun sincerity, deriving from the ancient Latin word sincerus, means clear or pure (Trilling, 1972). It is interesting to know that initially the word was primarily used referred to things and not to person (Trilling, 1972). Moreover, Trilling (1972) in his book often equates sincerity with authenticity.
Sincerity has been described by Napoli et al.’s (2016) as the consumer's belief that the firm is acting with integrity and driven by its love for the product and for the brand.
Sincerity has the aim to transfer brand’s genuineness to consumer. Particularly, brand owners see themselves as guardians of the brand and devote their life to protect and increase the brand’s past triumphs and potential future greatness (Beverland, 2005). Sincerity can be achieved in different ways, as making links to place, adopting traditional production practices, providing stylistic consistency, utilizing culture and history as referents, and emerging above commercial consideration through the separation of their business and production methods from their espoused philosophies and public persona (Beverland, 2005). Sincerity’s attribute helps
consumers to associate a brand to a sense of time and place (e.g. ‘small- town values’) and establish a personalised relationship with it (Fournier, 1998).
Sincerity is also associate to production quality (Beverland, 2005). Particularly, the attention to details that brand owners put in their products make the consumers to reinforce the perception of high quality, and therefore sincerity (Beverland, 2005).
Figure 5. Methods to achieve sincerity
Source: Own representation based on Beverland, 2005.
Craftsmanship
The last dimension of authenticity that the authors of the present paper decided to take into consideration is craftsmanship. The main reason of this choice is because this element is considered the hallmark of the central topic of this analysis: the luxury business (Hitzler and Müller-Sterwens, 2017). Particularly, according to Amatulli, et. al. (2018), craftsmanship is the main element that distinguish luxury from non-luxury goods.
Craftsmanship is defined as “the skill that someone uses when they make beautiful things with their hands” (Collins, 2019). When a product is crafted, it means that it has been realised with a high attention to details and a sense of beauty. Moreover, a crafted product should have a mark of quality thanks to the touch of human hands that produce the difference (Nieto, 2018).
In order to maintain their high status, the majority of luxury industries respect the rules of craft production, following handmade methods and pursue an historical continuity and resulting above commercial considerations. Minimizing the modern production techniques and leaving
the space to traditional hand-crafted practices support the creation of a powerful image of commitment to past traditions; consequently, this helps to increase the feeling of authenticity (Beverland, 2005).
Due to the high costs of the hand-crafted practices, the truer handcrafted methods are involved during the production, the higher will be the final price (Beverland, 2005; Kapferer, Klippert, and Leproux, 2014). In earlier times, luxury customers were satisfied and served directly from craftsmen who individually by hand, at the customer’s request, manufactured products with love for details. However, today in order to remain cost-efficient and competitive, luxury businesses had to find a balance between craftsmanship and automated production methods, paying attention to avoid the destruction of the foundation of luxury and to preserve its authenticity (Hitzler and Müller-Sterwens, 2017).
Traditional craftsmanship is fundamental in the luxury segment (Hitzler and Müller-Sterwens, 2017). Particularly, luxury consumers are increasing their desire to have unique experiences, therefore brands need to develop an approach that make their craftsmanship more tangible (Nieto, 2018).
All in all, in this paragraph the authors presented the major publications regarding authenticity, which is a rather new branch of the branding literature. They discussed the importance of authenticity and delineated four of the main dimensions of the construct.
In the following paragraph, the authors will describe one of the main construct of branding, which is Brand Equity, analysing its different perspectives and frameworks.
2.3 Brand Equity
In the following chapter the authors will present the construct of Brand Equity. That is to say, all the definitions and models taken into account for depicting Brand Equity see this concept from a consumer point of view. The authors in fact focus themselves on consumer-based Brand Equity in the cognitive psychology framework, as explained later in the chapter. The reason is that, as presented in the followings, many authors have pointed out the cruciality of measuring Brand Equity at a customer level, in order for managers to know whether they are going to the right direction (Lasser et al., 1995). After having presented the importance of Brand Equity and some of its most accredited definitions, the authors will present two of the main models regarding this topic: Aaker (1996)’s Brand Equity Ten and Keller (2001)’s Customer-Based
Brand Equity Pyramid. These two shares many similarities, and presenting and analysing both of them can help in better understand this broad topic that is Brand Equity.
2.3.1 The relevance of Brand Equity and its conceptualisation
Generally speaking, Brand Equity refers to the value of a brand (Baltas et al., 2010). It has been studied since the late ‘80s of last century, especially by the Marketing Science Institution (MSI) and it still is a widely-debated topic in the marketing literature (Ailawadi et al., 2003). As a result, many studies have been done about Brand Equity, with the recognition of brands as pivotal intangible assets that can positively contribute to a firm’s performance (Ailawadi et al., 2003; Lassar, Mittal and Sharma, 1995). Brand Equity can help in gaining a competitive advantage through successful brands (Lasser et al., 1995) and it is still one of the biggest topic in branding literature and among the most discussed (Keller, 2001).
Despite the broad agreement among scholars on the importance of Brand Equity for firms, a common vision around this concept does not exist. In fact, many definitions and measures have been provided through the years (Leuthesser, Kohli and Harich, 1995; Wood, 2000; Baltas et al., 2010). As a matter of fact, Brand Equity is “strategically crucial” for firms, “but famously difficult to quantify” (Baltas et al., 2010, p. 285).
The aim of this paper is to try to define the value of the brand, as Baltas et al. (2010) say, and to identify the most useful and thorough models that can help firms in developing their Brand Equity from a consumer point of view. As Martensen and Grønholdt (2010) cited “there are many Brand Equity models and measurement systems, developed by both researchers and practitioners, but in general they lack managerial usefulness” (p. 312). The authors will analyse some of those definitions, paying particular attention on two main models; nevertheless, in continuing this study, the authors will focus on the most recent of the two.
It is important to underline that all the studies that the authors take into account for this analysis try to define Brand Equity in a relationship with the consumer, as specified above. As we previously said (see intra 2.1.2 The evolution of Brand Management) we find ourselves in the middle of the relationship focus era and the stakeholder focus era, in which the consumer is crucial for firms (Merz et al., 2009). Moreover, some scholars pointed out that, for managers, it is key to be able to measure and truck Brand Equity at a customer level (Lasser et al., 1995).
The other way of analysing Brand Equity is from a financial point of view, with Brand Equity
as the financial asset creating value for the firm (Lassar et al., 1995; Feldwick, 1996; Ailawadi et al., 2003).
This means that, taking Feldwick (1996) classification of Brand Equity, we argue for the meaning of Brand Equity as the associations and the beliefs that the consumer creates and has about a brand. Specifically, Feldwick (1996) argues that Brand Equity can refers to brand loyalty, seen as the strength of consumer’s attachment to a brand, and to brand image, the description of associations and beliefs. As cited above, we will take this second meaning in our analysis, because it is a concept that does not want to be quantitatively measured (Feldwick, 1996). The author also names a third meaning of Brand Equity, which refers to the comprehensive value of a brand as a separable asset; this definition indicates the valuation of the brand and it is typically used by accountants or financial people (Feldwick, 1996), that is why the authors of this paper will not evaluate it.
Lassar et al. (1995) also depict consumers’ perceptions as one the five pillars of Brand Equity:
they define consumer-based Brand Equity as the “differential effect of brand knowledge on consumer response to the marketing of the brand”, in which the way consumer interacts with the brand is not objective but depends on the consumer’s own background. Moreover, Brand Equity derives from the greater confidence that consumers place in a brand rather than in its competitors, and this confidence is translated into trust, loyalty and a higher willingness to pay (Lassar et al., 1995).
2.3.2 Brand Equity and the cognitive psychology
The analysis of Brand Equity provided by Baltas et al. (2010) is also key to have a complete understanding of the concept. Alongside pointing out that Brand Equity deals with the value of the brand, Baltas et al. (2010) also agree with other scholars on the fact that one of the main things regarding Brand Equity is the brand name: having a well-known brand name is the point of departure for a higher Brand Performance (Baltas et al., 2010; Leuthesser, 1995; Aaker, 1991; Keller, 2003).
Moreover, the authors divide the literature about Brand Equity into two main frameworks: the cognitive psychology and the information economy. This distinction is different from the one cited above - between marketers and accountants - because in both Baltas et al.(2010)’s views the consumer is taken into account. According to the information economy, brand name is the
only thing that matters. Here, the consumers “make purchase decisions with imperfect information” (Baltas et al., 2010, p. 285), with the brand name as the only recognisable signal for the consumers. Credibility is the only determinant of Brand Equity and the brand name is what can increase perceived quality and products’ positioning and what can decrease information cost.
On the other hand, in cognitive psychology approach “Brand Equity lies in consumer's awareness of brand features and associations, which drive attribute perceptions” (Baltas et al., 2010, p. 285). In other words, some scholars have stated that consumers’ perceptions are the actual source of Brand Equity (Keller, 1993). This idea can be related with one of the meanings that Feldwick (1996) gives to Brand Equity, the fact that consumers’ associations and beliefs are key. This implies that consumers create links and associations in their minds about a brand’s dimensions (differently categorised by the scholars), attributing to it some value (Keller, 1993;
Aaker, 1991; Feldwick, 1996; Baltas et al., 2010). In line with this idea, the first consideration that Lassar et al. (1995) develop regarding Brand Equity concerns the fact that Brand Equity refers to consumers’ perceptions rather than objective indicators.
The two main exponents of this line of thought in Brand Equity are Aaker and Keller (Baltas et al., 2010). That is why, to have a better understanding of Brand Equity and its dimensions, in the next two sections, the authors will analyse more in depth the latest conceptualisations of Aaker (1996b) and Keller (2001). The two models share some similarities regarding the specific dimensions underneath Brand Equity; so, to better understand the concepts and to try to link them with authenticity later on (see intra 3.1 Brand Authenticity and Brand Equity), the authors will describe them both.
2.3.3 The Brand Equity ten
Aaker (1996b) in his article “Measuring Brand Equity Across Products and Markets” proposes ten different dimensions to describe Brand Equity, which should be seen as a point of departure to measure Brand Equity across markets and products. According to Aaker, many organizations offer different brands across different markets and in order to succeed in managing this wide portfolio of brands and markets a common measure of performance is pivotal. That is to say, there is the necessity to introduce some performance measures different from the classical financial ones that are usually the most considered (e.g. ROI, margins, costs, …). However,
these last metrics are likely to be short term, bringing little incentive to invest in brand building.
That is why a Brand Equity analysis from a cognitive psychology perspective is needed.
Following this philosophy, in his article Aaker makes a reflection regarding the measure criteria, underlining that measures should not just be tactical indicators such as marketing mix descriptors, but should mirror the value of the brand, focusing on sustainable assets difficult for competitors to replicate.
Aaker groups its ten Brand Equity dimensions under five categories (figure 6): four of them specifically fall into the cognitive psychology perspective, since they represent customer perceptions, while the last category refers to a more financial point of view of Brand Equity, since it includes market behaviour measures, representing information gained from marked- based information rather than straight from customers.
In the following paragraphs, the authors will analyse the ten dimensions, paying more attention to the eight that represent customer perceptions.
Figure 6. Aaker’s Brand Equity Ten
Source: Aaker, 1996, p. 105.
Loyalty. The first category at the core of Brand Equity is loyalty. It is a competitive advantage for firms, since having a loyal customer base serves as a barrier to entry for other organizations and a support against price competition. Aaker places two different dimensions under the category of quality.
1. Price premium: according to the Marketing Accountability Standards Board (MASB), price premium, also called relative price, refers to the percentage by which the selling price of a product is superior to (or shorter than) the benchmark price (Farris, Bendle, Pfeifer and Reibstein, 2010). In other words, Aaker defines it as the “amount a customer will pay for the brand in comparison with another brand (or set of comparison brands) offering similar benefits” (p. 106). Price premium can be easily evaluated with the
“dollar metric”, in which consumers are directly asked how much more they would be willing to pay for a specific brand; it can also be measured with more reliability with the conjoint analysis. Aaker indicates price premium as the “best single measure of Brand Equity” (p. 106), stating that all the drivers of Brand Equity should somehow affect price premium, which becomes a sort of a summary of the strength of Brand Equity.
2. Customer satisfaction: this dimension can only be applied to current customer, and therefore its limitation is that it does not apply to non-customers outside the current customer base. It is usually differently measured between the service and the product industries and by core business, and because of the variety of industries, a common measurement does not exist, but a generic and direct measure consists in asking “intend- to-buy questions” (p. 108).
Perceived quality and leadership. With this category, Aaker builds up on his research made in 1992, in which perceived quality was a category by its own, made of reason to buy, position, price, channel member interest and extensions (Aaker, 1992). Here quality is boosted by another variable, which is leadership.
3. Perceived quality: as analysed in 2.2.3, perceived quality is difficult to evaluate and it can embody many meanings (Golder et al., 2012), in fact “high quality may mean something different for a bank than for a beer” (Aaker, 1996b, p. 109). Nevertheless, in his “Total Research”, Aaker has shown that perceived quality is associated with price premium and elasticity, brand usage and stock return, as long as with the other essential
