Monitoring the Dynamics of Brand Equity Using Store-Level Data

Abstract

Management of brand equity has come to be viewed as critical to a brand's optimal long-term performance. The authors evaluate the usefulness of brand equity estimates obtained from store-level data for monitoring the health of a brand. They use a random coefficients logit demand model calibrated on store-level scanner data to track brand equity estimates over time in two consumer packaged goods categories that experienced several new product introductions during the period of the empirical investigation. Using these tracked measures, the authors also study the impact of marketing actions, such as advertising, sales promotions, and product innovations, on brand equity. They find that the brand equity estimates effectively capture the high equity of strongly positioned popular brands and brands that command a significant price premium in niche markets. Using an example, the authors illustrate how these brand equity estimates can be used to monitor changes in brand equity, which measures such as market share may fail to capture. The substantive results indicate that advertising has a positive effect on brand equity in both the product categories, whereas the effect of sales promotions is not significant in either category. Furthermore, the results reveal that new product innovations have a positive impact on brand equity and can explain a significant proportion of its variation. Overall, the analysis shows that a brand manager can track brand equity using store-level data, gain insights into the drivers of the brand's equity, and manage these drivers to achieve brand equity targets.

The impact of product innovation attributes on brand equity

“…In addition, innovation-as measured by new product introductions and degree of innovation-has been found to have an effect on brand equity (Sriram et al, 2007, Zhang et al, 2012. Therefore, we expect innovation attributes to influence brand equity.…”

“…Zhang et al (2012) find a positive effect of the degree of innovation (radical or incremental) on brand equity (i.e., the more radical an innovation is, the greater its effect is on brand equity). Similarly, Sriram et al (2007) reveal a positive impact of product innovation on brand equity. While Zhang et al's (2012) study focuses on innovation types, Sriram et al (2007) focus on new product introductions.…”

“…Similarly, Sriram et al (2007) reveal a positive impact of product innovation on brand equity. While Zhang et al's (2012) study focuses on innovation types, Sriram et al (2007) focus on new product introductions. However, other relevant innovation characteristics have not been considered in relation to their impact on brand equity, such as the attributes of newly introduced products.…”

Investigating the effects of product innovation and ingredient branding strategies on brand equity of food products

“…Despite the important of product innovations in 525 Brand equity of food products developing the brand, studies relating incremental innovation to brand equity are scarce. For instance, Sriram et al (2007) use Dominick's Finer Food data set to examine the effect of advertising, product innovation and sales promotion on brand equity. The authors show that new product formulations have a significant positive effect on brand equity in both short run and long run.…”

Moderating Effects of Nationality and Product Category on the Relationship between Innovation and Customer Equity in Korea and China

“…However, innovation management performance measures should not only be financial measures, but also nonfinancial measures (Hertenstein and Platt, ). A substantial body of literature on these topics already exists (e.g., Bhat and Bowonder, ; Gehani, ; Nasution and Mavondo, ; Sriram, Balachander, and Kalwani, ). However, several limitations in this literature can be identified.…”