A Survey-Based method for Measuring and Understanding Brand Equity and its Extendibility

The authors develop a new survey-based method for measuring and understanding a brand’s equity in a product category and evaluating the equity of the brand’s extension into a different but related product category. It uses a customer-based definition of brand equity as the added value endowed by the brand to the product as perceived by a consumer. It measures brand equity as the difference between an individual consumer’s overall brand preference and his or her brand preference on the basis of objectively measured product attribute levels. To understand the sources of brand equity, the approach divides brand equity into attribute-based and nonattribute-based components. The method provides the market share premium and the price premium attributable to brand equity. The survey-based results from applying the method to the toothpaste and mouthwash categories show that the proposed approach has good reliability, convergent validity, and predictive validity.