Building Strong Brands
Brand equity as an asset with a measurable return.
Summary
Aaker, a marketing academic, wrote this as the second volume in his work on brand equity, moving from measurement to the practical question of how a brand should be built and managed.
The brand equity model has four components. Brand awareness covers recognition and recall, and Aaker argues that awareness alone affects choice because familiarity produces preference. Perceived quality is the customer's judgement of the product relative to alternatives, which he shows correlates with financial performance more strongly than most other brand measures. Brand loyalty is the existing customer base's resistance to switching, which he treats as the most valuable component because it is an asset already owned. Brand associations are everything else the customer connects with the brand, including attributes, users, occasions, personality and organisational characteristics.
The practical framework is brand identity, which Aaker distinguishes from brand image. Image is how customers currently see the brand. Identity is what the organisation wants the brand to stand for and commits to delivering. He sets out identity across four perspectives: the brand as product, as organisation, as person, and as symbol, and argues that brands limited to product attributes are weak because attributes are copyable and because customers relate to more than function.
He also covers brand architecture, meaning the relationship between corporate, range and product brands; brand extension and when it damages the parent; and the organisational requirement for a brand manager with authority across the business rather than a marketing function.
The book is from 1996 and predates digital marketing entirely. The identity framework has been widely adopted in practice. The empirical support is correlational, drawn from Aaker's own studies and from industry data, and the causal claims about brand equity and financial performance are weaker than the framework's confidence suggests.
Key takeaways 7
- Brand equity comprises awareness, perceived quality, loyalty and associations, and each must be managed separately.
- Perceived quality correlates with financial performance more strongly than other brand measures.
- Loyalty is the most valuable component because it is an asset already owned rather than one that must be acquired.
- Brand identity is what the organisation commits to delivering, which is distinct from the image customers currently hold.
- Brands defined only by product attributes are weak, because attributes are copyable and customers relate to more than function.
- Brand extension into categories where the identity does not apply damages the parent brand's meaning.
- Managing a brand requires authority across the business rather than a marketing function, because the brand is delivered by operations.
Who should read it
Marketers and founders building brands who want a structured framework for defining what the brand stands for and managing it across the business.
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Where it sits in the reference 3
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