Measuring brand power: validating a model for optimizing brand equity

Abstract

Rather than taking the more traditional approach of measuring brand equity for accounting or strategic reasons, the approach taken here is concerned with optimizing brand equity through parsimonious manipulation of the marketing mix. To this end a macro‐model is first developed; this model is then operationalized and tested (in terms of predicted versus actual brand share) in three Korean markets. The contribution of the paper lies in the development of a methodology through which management can efficiently build brand power in their markets. The statistical methods (factor analysis and preference regression) are commonly used in commercial research and the research requirements to build such a model are quite modest – the proposed model makes a theoretical contribution but can also be used as a practical managerial tool.