Using the fuzzy multicriteria decision making approach to evaluate brand equity: a study of privatized firms
| Pages | 335-354 |
| Published date | 01 August 2019 |
| Date | 01 August 2019 |
| DOI | https://doi.org/10.1108/JPBM-09-2018-2037 |
| Author | Hasan Dinçer,Tuba Bozaykut-Buk,Şenol Emir,Serhat Yuksel,Nicholas Ashill |
Using the fuzzy multicriteria decision making
approach to evaluate brand equity:
a study of privatized firms
Hasan Dinçer and Tuba Bozaykut-Buk
The School of Business, Istanbul Medipol University, Istanbul, Turkey
Senol Emir
The Department of Economics, _
Istanbul University, _
Istanbul, Turkey
Serhat Yuksel
The School of Business, Istanbul Medipol University, Istanbul, Turkey, and
Nicholas Ashill
Department of Marketing and Information Systems, American University of Sharjah, Sharjah, United Arab Emirates
Abstract
Purpose –The purpose of this paper is to present a multidimensional evaluation of brand equity performance incorporating dimensions adopted
from the balance scorecard (BSC) approach to business performance.
Design/methodology/approach –In this study, text mining is used for automatic extraction of valuable information from textual data such as the
financial reports of firms. Instead of expert opinions, linguistic scales built upon outcomes of text mining are used as inputs for decision-making. The
proposed model combines fuzzy DEMATEL (FDEMATEL), fuzzy ANP (FANP), fuzzy TOPSIS (FTOPSIS) and fuzzy VIKOR (FVIKOR) methods for
weighting criteria and ranking alternatives.
Findings –Using data from five privatized firms in Turkey, the study’sfindings demonstrate that the customer is the most important dimension of
brand equity performance evaluation. Cash flow and brand loyalty are identified as the most important criteria in the measurement of brand equity
performance.
Practical implications –Findings highlight the importance of firms taking action to increase consumer perceptions, attitudes and behavi ors in the
privatization processes. For this purpose, privatized firms need to understand the expectations of customers to increase customer satisfaction and
loyalty and therefore improve brand equity.
Originality/value –The paper contributes to literature in several important ways. First, by adopting the BSC approach, it proposes a holistic anda
multidimensional model for measuring brand equity performance. Second, the study offers a novel methodology using a hybrid multi-criteria
decision-making model designed for the fuzzy environment. Third, the study uses the knowledge extraction tool of text mining in the fuzzy decision-
making process. Finally, the study evaluates the brand equity performance of privatized firms in an emerging country context.
Keywords Branding, Fuzzy sets, Brand equity, Brand name, Corporate branding, Brand performance, Brand management, Knowledge extraction,
Text mining, Fuzzy logic
Paper type Research paper
1. Introduction
Over the past 20 years, the topic of brand equity has received
considerable attention in the marketing literature (Yoo et al.,
2000;Tong and Hawley, 2009;Washburn and Plank, 2002).
Rapid technological innovation, the globalization of markets
and the growth of retail power have all highlighted the
importance of understanding and measuring brand equity.
Despite many definitions, there is general consensus in the
literature that brand equity represents the incremental value of
a product or firm due to the brand name (Srivastava and
Shocker, 1991). Positive brand equity is important to
customers, firms and investors alike. Consumers trust firms
that demonstrate positive brand equity (Augusto and Torres,
2018;Phung et al.,2019).Brand equity also provides value to
the firm by enhancing efficiency and effectiveness of marketing
programs, prices and profits, brandextensions and competitive
advantage relative to rivals (Yoo et al., 2000;Schivinski et al.,
2019). Understanding brand equity and how to measure it is
also important to investors of privatizedfirms. Investors expect
shareholder value and profitability to increase because of
privatization and thus analyzeassets and liabilities before they
decide to invest in a given firm (Pappu et al.,2005). Given that
the privatization process seeks to make firms more profitable
Thecurrentissueandfulltextarchiveofthisjournalisavailableon
Emerald Insight at: https://www.emerald.com/insight/1061-0421.htm
Journal of Product & Brand Management
29/3 (2020) 335–354
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-09-2018-2037]
Received 30 September2018
Revised 30 June 2019
Accepted 3 July 2019
335
and productive, investorsalso need to understand and measure
the brand equity of firms post privatization (Ahn et al., 2018;
Kodua and Mensah, 2017).
Not surprisingly, brand equity is a strategic resource to be
analyzed, measured and managed over time. Building and
maintaining the continuity and success of a brand is therefore
important and selecting an appropriate methodology to
evaluate brand equity effectively is a major task confronting
managers (Reinders and Bartels, 2017). However, the process
of building and maintaining positive brand equity involves a
high degree of uncertainty and ambiguity (Farquhar, 1989;
Ghosh and Chakraborty, 2004). Indeed, marketing decisions
in general are subject to multiple sources of uncertainties that
are affected by fuzziness and imprecise issues(Levy and Yoon,
1995). Despite these complexities however, the study of
marketing problems has traditionally relied on a linear model
(Mela and Lehmann, 1995), which is rooted in the binary
choice of classical set theorywhere elements possessing a set of
critical features are included as members of specific category,
and elements lacking those attributes are excluded (Cohen and
Basu, 1987). Binary thought is a way ofsimplifying a complex
world. In real-world marketing,decision-makers face problems
involving significant imperfect knowledge and vague factors in
situations where “approximatereasoning”is the dominant way
to make marketing decisions. Known as fuzzy logicor fuzzy
thinking (Zadeh, 1965;Zadeh, 2008), this approach
acknowledges that binary thought as a way of simplifying a
complex world distorts reality, and categories of objects
encountered in the real world cannot easily be classified with
crispness (Viswanathanand Childers, 1999;Zadeh, 1965).
Our review of the extant literature suggests that multiple
factors may affect the brand equity of a firm. A widely cited
strategic decision-makingtool that considers both financial and
non-financial aspectsof performance evaluation is the balanced
scorecard (BSC) (Norton and Kaplan, 1991). Acknowledging
that traditionalperformance approaches only consider financial
data, and ignore non-monetary aspects of performance
evaluation,the BSC considers four perspectives:
1financial, which measures the financial performance of
firm;
2customer, which measures the satisfaction of the firm’s
customers;
3internal business process, which measures internal
business results against measures from financial and
customer perspectives; and
4innovation and learning, which measures the ability of the
firm to adapt to changes (Kaplan and Norton, 2001).
In the brand equity literature, measurementhas largely focused
on either financial performance indicators (Ailawadi et al.,
2003;Simon and Sullivan, 1993), consumer-based equity
measures (Aaker, 1991;Christodoulides et al., 2006;de
Chernatony et al., 2004;Sinhaet al., 2008) or employee-based
measures (KingandGrace,2010). However, these studies have
largely been undertaken in isolation. Although the BSC
approach provides a broad and more holistic view of indicators
for evaluating brand equity with its range of four different
perspectives, its application in the strategic management
literature has traditionally assigned numerical values to
variables, i.e. binary thought. The few notable exceptions can
be found in the work of Dinçer et al. (2019),Hamamura(2019)
and Lu et al. (2018) who applied fuzzy logic to examine the
relative weights of different BSC dimensions, the relationships
between them andtheir causes and effects.
Against this backdrop, the objective of the current study is
to apply a practical multidimensional analysis approach
to measuring the brand equity of firms privatized through
public offerings in Turkey. We ground our study in the
BSC to provide marketing managers with a hybrid set
of interdependent brand equity evaluation indicators.
Acknowledging that marketing managers deal with uncertain
and complex situations, our study applies a fuzzy rule-based
approach to the evaluation of brand equity of privatized firms.
We seek to demonstrate that brand equity, because of its
complexity and the high degree of fuzzinessof dimensions, can
be evaluated effectively by integrating the BSC and multi-
criteria decision-making techniques (MCDM) combining
DEMATEL, ANP, VIKOR and TOPSIS. These techniques
have received very littleattention in the marketing literature.
Specifically, we first identify and discuss key dimensions of
brand equity grounded in the strategy-relatedBSC perspective.
In the first phase of the analysis process, we use text mining for
automatic extraction of valuableinformation from textual data,
such as the financial reports of privatized firms.We then apply
the fuzzy decision-makingtrial and evaluation laboratory (fuzzy
DEMATEL) approach to determine the interrelationships
among these dimensions. Then, analytic network process
(ANP) is used to obtain the criterion weights (Bentes et al.,
2012;Saaty, 1996). Finally, we examine the brand equity
performance of privatized firms using VIKOR and TOPSIS,
which represent powerful decision-making tools for ranking
and prioritizing the privatized firms (Keramati and Shapouri,
2016).
Our study contributes to the brand managementliterature in
a number of important ways. First,we extend the application of
MCDM with fuzzylogic such as DEMATEL and ANP into the
domain of brand equity evaluation.Although the application of
MCDM can be found in a few marketing studies such as
marketing strategy (Altuntas and Yilmaz, 2016), marketing
databases (Casillas and Martínez-L
opez, 2009)and
segmentation (Dat et al., 2015;Rezaei and Ortt, 2013), its
utility has largely remained unexplored in the marketing
domain. Second, grounded inthe BSC approach, we identify a
hybrid set (financial and non-financial) of brand equity
measures that recognize the multidimensional nature of the
brand equity concept. Third, our study combines the use of
text mining with MCDM. Specifically, we apply quantitative
text mining for extracting data from the financial reports of
privatized firms. As a quantitative method, text mining, which
refers to the extraction of information from relatively large
amounts of electronically stored textual data by means of
computer applications (Witten and Frank, 2005), ensured an
objective evaluation of brand equity performance measures.
Finally, our use of different MCDM techniques allows for
comparative analysis highlighting both similarities and
differences in brandequity performance.
This article is organized as follows.First, we provide a review
of the extant literature in the area of brand equity
measurement. This is followed by an explanation of our
research methodologyto evaluate the brand equity of privatized
Approach to evaluate brand equity
Hasan Dinçer et al.
Journal of Product & Brand Management
Volume 29 · Number 3 · 2020 · 335–354
336
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