Brand equity or double jeopardy?
| Pages | 26-32 |
| DOI | https://doi.org/10.1108/10610429510083730 |
| Published date | 01 March 1995 |
| Date | 01 March 1995 |
| Author | Arjun Chaudhuri |
| Subject Matter | Marketing |
26 JOURNAL OF PRODUCT & BRAND MANAGEMENT VOL. 4 NO. 1 1995 pp. 26-32 © MCB UNIVERSITY PRESS, 1061-0421
The mergers of firms with famous brand names has prompted speculation on
the value of such brands to both consumers and the acquiring firms (Temple,
1989). In order to be able to measure the overall value of a brand, marketing
researchers and practitioners have begun to examine the concept of “brand
equity” (Aaker, 1991; Baldinger, 1990; Keller, 1993; Winters, 1991). Almost
all conceptualizations of brand equity agree today that the phenomena
involves the value added to a product by consumers’ associations and
perceptions of a particular brand name (Winters, 1991). This, in turn, results
in greater value for the brand name from the perspective of the firm.
Recently, however, the concept of brand equity has been challenged by the
theory of “double jeopardy” (Ehrenberg et al., 1990). According to
Ehrenberg (Mitchell, 1992), brand equity does not exist since factors such as
repeat buying are directly related to market share. Large market share brands
are desirable because they have a greater number of buyers than small
market share brands and also because such large share brands have greater
rates of repeat buying among their greater number of buyers. The notion that
certain brands have greater potential than other brands in terms of “equity”,
or value, or growth potential is misleading and market share is all that
managers should try to increase (Mitchell, 1992).
This article proposes a model that attempts to reconcile the theories of
“brand equity” and “double jeopardy”. It is suggested that both theories are
correct and that consumer attitudes and repeat buying are both directly
(double jeopardy effect) and indirectly (brand equity process) related to
brand outcomes (market share, etc.), with the indirect process occurring
through the concept of brand loyalty. In sum, it is proposed that brand
loyalty is a separate concept from either consumer attitudes or repeat buying
and that it fulfills a crucial intervening function between these consumer-
based outcomes and market-based outcomes for a brand such as market
share and price. This indirect process is purported to represent, at least in
part, the process of brand equity which explains brand outcomes in addition
to the direct effects of consumer attitudes and habitual buying on brand
outcomes, as proposed by the theory of double jeopardy. Preliminary
evidence for the model is also presented in this article through an overview
of the results of an exploratory study.
Model
The model depicted in Figure 1 addresses the nature of the relationship
between customer-based outcomes and brand equity outcomes at the market
level. Specifically, the model attempts to explain how the antecedents of
brand attitudes, habit and brand loyalty influence brand equity outcomes
(BEO) such as market share and price. Two routes to BEO are proposed. The
first is the direct route from attitudes and habit to BEO (market share) that
has been evidenced in studies investigating the double jeopardy phenomena.
The second is an indirect route that describes the process of brand equity via
Brand equity or double
jeopardy?
Arjun Chaudhuri
“Brand equity” and
“double jeopardy”
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