Critical Review of Literature on Brand Equity and Customer Loyalty

Abstract

Brand equity is recognized as the driving force of customer loyalty in the competitive firms operating in the changing business environment. The culture of attracting and retaining customers is dependent on which organization can enhance the value of their products to conform and exceed customer needs. By extension, brand equity is regarded as a multi-dimensional facet that comprise of brand loyalty, brand awareness, brand association, perceived quality, brand association and proprietary assets. Theories and models which have been discussed extensively and inform the basis of arguments of this study include; brand equity theory, consumer utility theory, customer based brand equity model, service branding dominant logic model and brand evolution model. Despite conflicting ideologies and evolving nature of brand equity based on psychological aspects of consumers like attitudes and perceptions, it is noted that that there is a positive correlation between brand equity and customer loyalty. Based on the existing literature, it can be concluded that brand equity is the only strategic marketing initiative companies can enhance customer relations and sustainability. Therefore, it is recommended that companies should always strive to enhance their image in the mind of consumers by repositioning their brands in the market. Contribution/Originality:This study contributes to existing literature by developing the link between brand equity, company attributes, customer attributes and customer loyalty. INTRODUCTIONIn a world of global competition and changing consumer needs, brands have continued to remain strategic drivers among competitive firms operating in the global and local marketplaces (Kapferer, 2008). Organizations are using brand management strategies to achieve their goals in the changing business environment (Kotler & Keller, 2009). Increased competition in multiple industries has resulted to enhanced brand management techniques which focus on enhancing customer loyalty (Martens & Hilbert, 2011). With changing customer needs and wants, brand management has continued to evolve since 1980s. Companies operating in the 21 st century have continued to invest in brand management in order to increase their productivity. Calvo and Calvo (2012) suggest that a brand is understood by customers based on different perspectives that range from psychological aspects and organizational attributes. Product and services can receive a distinct identity in the mind of consumers by fulfilling the expectations of the consumer. Argues that consumers are likely to have a permanent memory stick of brands that exceed their expectations and vice versa. Internal and external stakeholders are likely to have a strong attachment

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