Fieldwick (1990) identified three different ways in which the term ‘brand equity’ has been used: first to signify the total value of a band as a separate assest, a measure of the strength of consumers’ attachment to the brand and as description of the associations and beliefs the consumer has about the brand. For firms, gaining more favourable associations and feelings amongst target consumers is the end result of growing brand equity (Falkenberg, 1996). Just like other intangible assets, the equity level of a brand is able to provide the qualities that are necessary for the creation of a sustainable competitive advantage. Brand equity adds value to the firms customers and at the same time, it helps the company gain sustainable competitive advantage (Delgado-Ballster & Murera-Aleman, 2005). In the areas of brand management, brand equity has become a very important concept that helps brand practitioners to improve the effectiveness of brand in the marketplace (Wang, 2015).
The concept of brand equity is relevant to the recognition that branding is often essential to firm success, particularly in highly competitive business environment and may become one of the most valuable assets of firms (Jorge et al., 2008). Brand awareness, perceived quality, brand associations, brand loyalty and other trademarked brand assets such as channel relationships, patents and trademark were identified by Aaker (1991) as the conceptual elements of brand equity (Christodoulides & Chernatony, 2010). Brand awareness is the first step to creating brand equity. This element is in accordance with the presence of the brand in the patron’s mind; whether they can recall or identify the brand (Aaker, 1996). Aghaei et al (2015) is of the view that perceived quality, complete perception of the product and loyalty towards the brand are developed from customers’ awareness and constant relation with the brand. Loyalty as defined by Oliver (1999) is “a deep commitment for re-buying or buying more of a preferred product or service in future through which a similar or repeated brand is bought despite the fact that environmental effects and marketing efforts make a potential change in behaviours”. Brand Loyalty has been associated with a positive perception by consumers towards the brand (Ishak, & Abd Ghani, 2013).
Specifically, marketing effects related to brand equity can be looked at from the level of the firm results such as market share, revenue and premium prices, or at the consumer level, such as brand knowledge, image, awareness and attitudes. Changes in firm outcomes such as sales volume and profit are usually aggregated consequence of consumer-based brand equity, such as brand image and attitude (Ailwadi et al., 2003; Keller 1998)
Positive equity with a strong brand influences consumer responses towards the brand, which in effect influences the brand’s performance positively (Amegbe, 2016). The main advantage of the brand equity is its positive effect on demand. It is expected that the brand awareness, brand quality and the brand loyalty cause the increase of brand market performance. This aspect of brand equity helps the organizations attract the customer (Aaker, 1996). Brand equity is portrayed in consumer’s readiness to pay a best price for a favourite brand in preference to others, propose it to peers and consider other company offerings (Hutton, 1997). It makes consumers less sensitive to price increases (Hoefler and Keller, 2003; Keller & Lehman, 2003) and more willing to pay a higher price since they perceive some unique value in the brand that no other alternative can provide (Amegbe, 2016). Brand equity generates from the higher confidence consumers place in a brand than they do in its competition. This confidence is evident in consumers’ loyalty and their willingness to pay a premium price for the brand (Lassar & Sharma, 1995). Brand management is successful when brand equity is understood correctly to produce a firm financial act (Kim & Kim, 2005).