This article compares eleven different consumer-based brand equity measures and evaluates their convergence. Predictive validity at the individual and aggregate levels is also investigated. Measures based on the dollar metric method and discrete choice methodology predict choices extremely well in a simulated shopping environment, as well as purchase-intention and brand-quality scales.
MANOJ K. AGARWAL AND VITHALA R. RAO 1. Brand equity Aaker (1991) and Keller (1993) have both provided conceptual schemes that link brand equity with various consumer response variables. Specifically, Aaker (1991) lists four major consumer-related bases of brand equity: brand loyalty, name awareness, perceived quality, and other brand associations. The stronger these bases are, the higher is the resulting brand equity. Keller (1993) presents a knowledge-based framework for creating brand equity. This knowledge is composed of two major dimensions: brand awareness and brand image. Awareness is composed of brand recall and recognition, while image is composed of various associations of the brands. Both these authors suggest a variety of indirect measures and methods to estimate brand equity based on their frameworks. For example, Aaker (1991) suggests using repurchase rates, switching costs, level of satisfaction, preference for brand, and perceived quality on various product and service dimensions as potential measures, among others. Likewise, Keller (1993) suggests correct top-of-mind recall, free associations, ratings of evaluations, and beliefs of associations as some of the measures of brand knowledge.
We differeutiate between the direct and indirect approaches to measuring brand equity (Asker, 1991; Keller, 1993). The direct approach tries to assess the added value of the brand and appears to be the accepted definition of brand equity (Farquhar, 1989; Keller, 1993). The indirect approach tries to identify the potential sources of brand equality. An understanding of these sources for a firm's own and competitive brands is critical for the brand manager (Keller, 1993; Parker and Srinivasan, 1994). We focus mostly on the indirect measures.
Besides the measures suggested by academic researchers, various marketing research firms use their own proprietary measures of brand equity. Winters ( 199 1) reports at least six such approaches-the measurement of share of mind and esteem (Landor Associates), perception of quality (Total Research Corporation), willingness to continue to purchase a brand (Market Facts, Inc.), level of commitment to a brand (Yankelovich Clancy Shulman), profit potential (Longman-Moran Analytics), and a composite of awareness, liking, and perceived quality (DDB Needhaln Worldwide). Since these measures assess the ~derlying constructs of aw~eness, perceptions, preferences, and intentions and do not gauge the added value of brands, they should be considered indirect.
2. Measures of brand equity
In order to integrate varied measures of brand equity, we use a framework based on the perception-preference-choice paradigm and the hierarchy of effects model (Lavidge and Steiner, 1961; McGuire, 1972). This framework provides measures linked to the stages through which a consumer passes and can thus provide useful diagnostic information to the manager. We selected eleven measures that relate to the different stages of the hierarchy. These measures are operationali~ed both at the individual and aggregate levels.