The information-economics perspective on brand equity
Files
(Published version)
Date
2016
Authors
Erdem, T.
Swait, J.
Editors
Advisors
Journal Title
Journal ISSN
Volume Title
Type:
Journal article
Citation
Foundations and Trends in Marketing, 2016; 10(1):1-59
Statement of Responsibility
Conference Name
Abstract
The focus of this monograph is the information-economics theoretic framework of brand equity. Adopting this view, Erdem and Swait (1998) argue that consumer-based brand equity is the value of a brand as a credible signal of a product’s positioning. In their framework, the content, clarity, and credibility of the brand signal creates intangible benefits, enhances perceived quality, and decreases consumer-perceived risk and information costs, and hence increases consumer utility, which underlies the added value associated with a brand. The central (and motivating) construct in this view is the “credibility” of brands as signals.In section II, we discuss the underpinnings of this framework of brand equity, and hence outline the analytical models of signaling under quality uncertainty, brand premia, and reputation. In section III, we outline this information-economics theoretic framework of brand equity in greater detail and discuss the empirical validation of the framework. In section IV, we discuss the theoretical and empirical implications of the information-economic theoretic framework for various aspects of consumer decision-making, such as choice, consideration-set formation, choice dynamics, customer relationship management (CRM), formation of brand loyalty, and consumer price sensitivities and willingness to pay. Finally, in this section, we also discuss the implications for brand management, such as managing brand extensions, alliances, co-branding, and brand crisis. In section V, we discuss the validation of the basic framework across product categories and countries and over time. In section VI, we conclude with avenues for future research.
School/Discipline
Dissertation Note
Provenance
Description
Access Status
Rights
Copyright 2016 T. Erdem and J. Swait