1. Theoretical of Branding
Brand is the image that consumers have in mind (Aaker, 1991). It is also the
unique characteristics that have been developed all the time in order to
differentiate actual products from the competitors (Murphy, 1990). In addition,
The American Association defines a brand as “a name, term, sign, symbol or
design, or a combination of them intended to identify the goods or services of
one seller or group of sellers and to differentiate them from those of
competitors. “A brand is thus a product or service that adds dimensions that
differentiate it in some way from other products or services designed to satisfy
the same need. These differences may be functional, rational, or emotional or
intangible related to what the brand represents. Brand concepts must address
customer interests and lifestyles. Factors that affect its brand image and
brand perception among marketing communication program that
implementing to the public to create brand perception, brand characteristic,
brand image and brand equity.
Brand Equity
Brand equity is the added value endowed to products and services. Aaker
(1991) defined the brand equity as a set of brand assts and liabilities linked to
brand that adds or detracts the product or service value based on the
customers perspectives. This value may be reflected in how consumers think,
feel and act with respect to the brand that consumers had perceive from
marketing programs. Brand equity is an important intangible asset that has
psychological and financial value to the firm. The value of brand equity
depends on the number of same people who buy regularly (Aaker, 1996). The
brand loyalty, brand awareness, and brand perceived quality are necessary to
maintain the brand equity (Motameni & Shahrokhi, 1998). There are two
different perspectives of brand equity; financial and customer based. The first
perspective evaluates the asset value of a brand name that creates to the
business (Farquhar et al, 1991). Brand equity increased the discounted future
cash flows and revenue comparing to the same product did not have the
brand name (Motameni & Shahrkhi, 1998).
According to the second perspective, the premise of customer-based brand
equity models is that the power of brand lies in what customers have
responded, seen, read, heard, learned, thought and felt about the brand over
time. In other words, the power of brand lies in the minds of existing or
potential customers and what they have experienced directly and indirectly
about the brand. The customer-based brand equity finally drives the financial
return to the company (Lassar et al, 1995). The valuation of brand has been
studied for different approaches, for example, marketing, premium pricing
market value, customer factors, replacement cost perspective. According to
the valuation based on consumer factors, the measurement of customers’
preference and attitude can be used to valuate the brand equity (Aaker, 1991
and Kapferer, 1992).
Brand Perception
Brand perception is consumers’ ability to identify the brand under different
conditions, as reflected by their brand recognition or recall performance
(Kotler & Lane, 2006). Brand recall refers to consumer’s ability to retrieve the
brand from the memory (Keller, 1993). According to the improvement of
measurement for brand equity, consumer-based brand equity was described
for four dimensions; brand awareness, brand association, perceived quality,

2. and brand loyalty (Pappu, et al, 2005). Brand awareness was defined as the
consumers’ ability to identify or recognize the brand (Rossiter and Percy,
1987). It refers to the strength of a brand presence in consumer’s minds.
Brand awareness has several levels starting from the less recognition of the
brand to dominance (Aaker, 1991). Perceived quality was evaluated and
decided by consumers. Perceived quality is another valuation of brand to
push the customer to buy products.
Brand building has been around for centuries as a means to distinguish the
goods of one producer from those of another. The earliest signs of branding
in Europe were the medieval guilds’ requirement that craftspeople put
trademarks on their products to protect themselves and consumers against
inferior quality. In the fine arts, branding began with artists signing their works.
Brands today play a number of important roles that improve consumers’ lives
and enhance the financial value of firms (Kotler & Lane, 2006). Brand
awareness and brand perceived quality as the significant factors to create
and maintain brand equity. There are positive relationship among brand
awareness, perceive quality and brand equity (Aker, 1996, Buzzell & Gate,
1987). The marketing program has effect to improve the perceive quality of
brand for different customers.
Brand Perception
Brand perception is consumers’ ability to identify the brand under different
conditions, as reflected by their brand recognition or recall performance
(Kotler & Lane, 2006). Brand recall refers to consumer’s ability to retrieve the
brand from the memory (Keller, 1993). According to the improvement of
measurement for brand equity, consumer-based brand equity was described
for four dimensions; brand awareness, brand association, perceived quality,
and brand loyalty (Pappu, et al, 2005). Brand awareness was defined as the
consumers’ ability to identify or recognize the brand (Rossiter and Percy,
1987). It refers to the strength of a brand presence in consumer’s minds.
Brand awareness has several levels starting from the less recognition of the
brand to dominance (Aaker, 1991). Perceived quality was evaluated and
decided by consumers. Perceived quality is another valuation of brand to
push the customer to buy products.
Brand building has been around for centuries as a means to distinguish the
goods of one producer from those of another. The earliest signs of branding
in Europe were the medieval guilds’ requirement that craftspeople put
trademarks on their products to protect themselves and consumers against
inferior quality. In the fine arts, branding began with artists signing their works.
Brands today play a number of important roles that improve consumers’ lives
and enhance the financial value of firms (Kotler & Lane, 2006). Brand
awareness and brand perceived quality as the significant factors to create
and maintain brand equity. There are positive relationship among brand
awareness, perceive quality and brand equity (Aker, 1996, Buzzell & Gate,
1987). The marketing program has effect to improve the perceive quality of
brand for different customers.
1.2 Brand Value Creation
To explain the phenomena of brand equity, Keller and Lehmann (2003) developed
the brand value chain (BVC) model. It theoretically explains how brand related
2
investments affect firm financial value by changing customer mindsets and subsequent

3. market performance. Brand value creation begins with the firm’s investment in marketing
programs such as product research, development, trade support, marketing
communication, advertising, promotion, etc. These marketing activities affect the
consumer mindset with regard to the evaluation of the brand. The consumer mindset
consists of multi-dimensional attributes, including brand awareness, associations,
attitudes, attachment, activities and experiences. The consumer mindset determines how
consumers act in the marketplace. The outcome of these actions are reflected in market
performance indicators such as price premiums, reduced price elasticities, increased
market share, brand expansion into other categories, etc. Based on the brand’s market
performance, the financial market makes assessments and adjustments to reflect the value
of the brand. Some important financial metrics are the stock price, price-earning ratio, the
overall market capitalization of the firm that owns the brand, etc. (Ambler et. al. 2002).
1.3 Three Levels of Brand Equity Measures
The extant literature has proposed brand equity measures at three levels:
individual, product and firm. One approach is to measure consumer’s state of mind with
regard to a brand, i.e. consumer-based brand equity (CBBE). This family of mindset
measures includes awareness, attitude, attachments, associations, loyalty toward a brand,
etc. (e.g., Aaker 1991, 1996; Ambler and Barwise 1998; Keller 1993; Keller and
Lehmann 2001). These measures demonstrate the basic underlying dimensions of brand
equity. They have good diagnostic power by signaling the change of a brand’s value and
providing the reasons for the change (Ailawadi, Lehmann, and Neslin 2003).
3
Another approach involves measuring product level outcomes. These measures of
brand equity include loyalty, price premium, market share, revenue, net profit, etc. (e.g.,
Ailawadi, Lehmann, and Neslin 2003; Agarwal and Rao 1996; Chaudhuri and Holbrook
2001; Dubin 1998). Since these metrics can be obtained and computed through sales
information, they maintain the desirable features of being accessible and objective.
Moreover, because these measures are closely related to financial returns, they provide a
valuable reference for brand valuation.
Finally, some researchers focus on firm financial returns associated with a brand.
These measures involve the consideration of discounted future cash flows or projected
future earnings associated with a brand (e.g., Birkin 1994; Mahajan, Rao, Srivastava
1994; Simon and Sullivan 1993). Because this approach puts a brand’s future potential
into the formula, it treats brand as a long-term intangible financial asset.
Sources
Aaker, D.A. 1991. Managing Brand Equity: Capitalizing on the Value of a
Brand Name, The Free Press New York, NY.
Aaker, D.A. 1996. Measuring brand equity across product and markets,
California Management Review, Vol. 38, Spring, No. 3, pp. 102-20.
Keller, K.L. 1993. Conceptualizing, measuring , and managing customerbased
brand equity, Journal of Marketing, Vol 57 No.1, pp.1-22.
Murphy, J. 1990. Assessing the value of brands, Long Range Planning, Vol.
23 No. 3, pp.23-9.

4. Keller, Kevin L. and Donald R. Lehmann (2003), “How Do Brand Create Value,”
Marketing Management, 2003 (May), (26-31).