What makes a brand like Barbie® a global icon, while others fade into obscurity? The answer lies in a powerful concept that goes beyond just flashy ads or trendy products. It’s brand equity that drives customer loyalty, shapes perceptions, and fuels blockbuster successes. At the heart of this success are two distinct approaches that have helped brands thrive in today’s fast-moving world. Curious to know how some of the biggest names maintain their market dominance? Let’s dive into the two models that unlock the secrets to lasting brand power…
What is Brand Equity?
Brand equity refers to the value and strength of a brand that stems from consumers’ perceptions, experiences, and associations related to the brand. This concept encompasses both the tangible and intangible aspects that contribute to a brand’s market position and the loyalty it commands among its customer base. Brand equity is pivotal because it can influence a brand’s ability to command premium pricing, its competitiveness in the market, its overall market share, and its resilience to competitive pressures. The two most recognized models for understanding and building brand equity are Keller’s Brand Equity Model and the Aaker Brand Equity Model.
The two frameworks offer distinct approaches to how businesses can create and maintain brand strength. Keller’s model focuses on how consumers perceive and respond to a brand, while the Aaker model takes a broader approach and incorporates both customer perception and brand assets.
Keller’s Brand Equity Model Explained
Keller’s Brand Equity Model, sometimes also referred to as the Customer-Based Brand Equity (CBBE) model, focuses on how consumers interpret a brand at various stages of the consumer experience. The model is essentially structured around this idea that positive brand equity is achieved by shaping how consumers think and feel about the brand, which ultimately leads to loyalty and strong customer relationships.
There are several key steps/components of the Keller’s Brand Equity Model:
- Brand Identity: Ensuring that customers can recognize and recall your brand amongst competitors. This involves creating a distinct image for yourself and positioning. The goal is to answer the question, “Who are you?”.
- Brand Meaning: Create strong brand associations that communicate what your brand stands for to the audience. This includes product performance and brand imagery. The question you want to answer here is, “What are you?”.
- Brand Response: This stage focuses on how customers evaluate the brand. At this point in the consumer experience, brands want to shape customer’s judgements and emotional responses to their products or services. This is achieved through exceptional product quality, value, and customer satisfaction.
- Brand Relationships (or Resonance): The final step involves creating long-term, emotional connections. At this stage, the goal is to foster brand resonance, where customers don’t JUST purchase the brand regularly but also feel a personal connection to it.
Keller’s Brand Equity Model: in Action
Perhaps one of the best examples of this framework in action is Nike. The company has built a globally recognizable brand identity with its distinctive “swoosh” logo and iconic “Just Do It” messaging. By creating a strong emotional bond with its audience through campaigns, Nike has successfully cultivated brand meaning centered on the ideals of “performance” and “motivation“. Consumers associate Nike with personal success, allowing them to stand out in the long-term.
Aaker Brand Equity Model Defined
The Aaker Brand Equity Model is another widely recognized framework when it comes to outlining the key dimensions contributing to a brand’s equity. Developed by David Aaker, the model suggests that a brand’s value isn’t just about how it is perceived by consumers but also involves tangible brand assets.
The model can be broken down into 5 distinct components that give a comprehensive approach to building a strong, competitive brand:
- Brand Loyalty: this component reflects how likely a customer is to stick to your brand instead of using a competitor’s product. This is one of the most valuable assets for a company to have since it leads to repeat business and positive word-of-mouth marketing. Aaker emphasizes that fostering loyalty not only ensures consistent revenue but also reduces marketing costs by retaining that core customer base.
- Brand Awareness: High brand awareness means customers can easily recall the brand in different contexts. For companies, building awareness is critical since it often serves as the first step in consumer decision-making. Aaker says that without awareness, a brand can’t even begin to compete in the consideration set.
- Perceived Quality: This is the customer’s internal assessment of the physical excellence of a product compared to competitors alternatives. Aaker states that perceived quality can charge premium prices. It’s not just about the actual quality but how consumers PERCEIVE the brand’s offerings.
- Brand Associations: These are the mental connections customers make with a brand based on experiences, marketing efforts, and brand values, which can be emotional, symbolic, or functional.
- Other Brand Assets: Assets like patents, trademarks, and distribution channels provide a competitive advantage. Aaker’s model recognizes that these assets can prevent competitors from encroaching on market share and serve as a buffer against external threats. While not consumer-facing, these assets significantly contribute to brand strength.
Overall, the Aaker Brand Equity Model addresses both consumer behavior and business assets. Understanding this framework is helpful for businesses that want to enhance the areas of their efforts that have the greatest direct impact on the brand’s market position. The model offers flexibility and can be applied to various industries and markets, from tech companies to consumer goods.
Aaker Brand Equity Model In Action
One of the best examples of a company that uses the Aaker Brand Equity Model well is Coca-Cola. The brand has achieved remarkable brand loyalty through consistent marketing and emotional connections with consumers. Coca-Cola’s high brand awareness and strong brand associations—such as happiness and refreshment—further bolster its position in the market. Additionally, proprietary assets like trademarks ensure its dominance, making it one of the most valuable brands in the world.
Keller vs. Aaker: Who Wins?
Keller’s Brand Equity Model emphasizes a consumer-centric approach, revolving around building strong, positive brand associations in the customer’s mind that guide their purchasing decisions. In contrast, the Aaker Brand Equity Model provides a holistic view, accounting not only for consumer perceptions but also for tangible brand assets. Aaker’s model is comprehensive, considering both emotional and functional aspects of a brand’s equity.
Each model has different, distinct benefits. Keller’s model is especially great for building emotional bonds with consumers, making it ideal for brands seeking to enhance customer experience and loyalty. It helps brands foster deep, lasting connections. However, it might overlook tangible aspects like brand assets and trademarks that can be crucial for market expansion. Aaker’s model, on the other hand, is better suited for brands with diverse product lines and valuable proprietary assets, but it can be seen as less effective for capturing the emotional nuances that drive consumer behavior.
So who wins? The choice between Keller’s and Aaker’s models largely depends on your brand’s specific objectives. For businesses that rely on brand perception and customer experience, such as in luxury or lifestyle markets, Keller’s Brand Equity Model is great for building emotional resonance. However, if a brand is well-established with a diverse portfolio and wants to leverage tangible assets like trademarks and patents (e.g., tech or manufacturing sectors), Aaker’s model is a more suitable framework for evaluating brand equity from both consumer and business asset perspectives.
Importance of Brand Equity in Driving Business Growth
Why does brand equity even matter? Brand equity directly influences a company’s ability to achieve long-term profitability. According to Keller’s Brand Equity Model, when a brand builds a strong emotional connection with consumers, consumers are more likely to pay higher prices (for brands they trust and value). Similarly, the Aaker Brand Equity Model shows that increasing brand loyalty and perceived quality leads to repeat purchases and customer retention, which improves a brand’s market position and bottom line.
How Barbie® Rebuilt Brand Equity and Achieved Historic Success
Unless you live under a rock, you know about the iconic movie that smashed box office records in the summer of 2023. The transformation of Barbie® from a declining brand in the 2010s to a global cultural phenomenon in 2023 is a masterclass itself in brand equity building. By strategically applying both Keller’s Brand Equity Model and the Aaker Brand Equity Model, Criterion Global reignited the brand’s relevance and value through targeted media investments and innovative campaigns.
Keller’s Brand Equity Model emphasizes the importance of building strong emotional connections with consumers. Mattel and Criterion Global focused on reinforcing Barbie®’s brand identity by modernizing her image to align with contemporary values, while staying true to her legacy. This was achieved through the “I Can Be™” campaign, which empowered young girls by showcasing Barbie® in over 250 careers, fostering a deep sense of brand meaning. By focusing on brand responses—how consumers felt and reacted to Barbie®—Criterion Global used paid media to re-establish emotional connections with both children and their parents. The result was a renewed sense of brand relationships where Barbie® was not just seen as a toy but a cultural symbol of empowerment and aspiration. The campaign’s viral success, fueled by fan engagement and media attention, set the foundation for the Barbie® Movie’s later groundbreaking success.
The Aaker Brand Equity Model also played a critical role in Barbie®’s comeback by targeting both consumer perceptions and the tangible assets that made the brand valuable. Through brand awareness initiatives, including high-visibility OOH media campaigns in major cities like New York, Barbie® regained her cultural significance. The “I Can Be™” campaign became a hallmark of brand loyalty, winning over a new generation of consumers and rekindling nostalgia among parents who grew up with Barbie®. This broadened the perceived quality of Barbie® as a brand that stood for more than just fashion—it stood for empowerment and diversity. These strategies boosted the overall brand equity, aligning with Aaker’s focus on building value through both emotional and tangible factors.
The culmination of these efforts was the 2023 release of the Barbie® movie, which became a cultural and financial phenomenon. Criterion Global’s long-term strategy of investing in brand equity paid off with a massive 488x ROI, turning a $240M investment into $1.44B in box office revenue. The movie capitalized on brand loyalty, with multiple generations flocking to theaters, and built on the existing brand associations of Barbie® as a symbol of empowerment. By blending Keller’s consumer-centric approach with Aaker’s focus on brand assets, Mattel and Criterion Global were able to rebuild Barbie®’s value, turning her into one of the most profitable and culturally relevant brands in the world. This case study, which you can read more about here, highlights the importance of strategic media investments, consistent brand messaging, and adapting a brand’s identity to align with evolving consumer expectations.
Why Brand Equity Matters? The Takeaway
Conventional marketing wisdom and quantitative business intelligence all collectively underline the critical importance of nurturing brand equity through consistent marketing efforts, customer relationship management, and investment in brand innovation. They demonstrate a clear link between a strong brand equity foundation and a company’s ability to achieve superior market performance, suggesting that brand equity is not just a marketing asset but a strategic business asset contributing to long-term success.
Brand equity improves other – even seemingly unrelated – business outcomes. How do brands build brand equity? The first step is planning. Criterion Global specializes in strategic media buying and international advertising, leveraging their expertise to maximize your brand’s visibility across global markets. This comprehensive understanding of diverse consumer landscapes creates actionable impact that ensures brand messages are not just seen, but felt by their intended audience. Moreover, their data-driven approach to strategy formulation ensures that every advertising dollar is spent efficiently, optimizing return on brand equity investment. If you’re a brand looking to make a lasting impact in their industry, contact Criterion Global today to gain access to measurable gains in brand equity.
Recommended Reading:
- How to Build Brand Equity [Barbie® Case Study]
- Linking customer‐based brand equity with brand market performance: a managerial approach. Tolba, A.H., Hassan, S.S., Journal of Product & Brand Management, on Emerald Insight.
- Elsayed, R.A. The effect of investment in the brand value chain on profitability and market value of the firm: lesson of success taken from Amazon. Futur Bus J 9, 19 (2023).
- How Amazon Budgets for Brand Investment [Criterion Global Case Study]