Building Hisense Brand Equity through Selected Marketing Programmes - Thesis Example

The Structural Equation Modelling (SEM) and the multiple regression statistical method with the Statistical Package for Social Science (SPSS 11.0) are used to analyze the data.

Research results indicate that the structural research framework has an acceptable level of fit to the empirical data.

Finally, the implications of the research results for the theory and practice of brand management are analyzed and discussed.

The concept of brand equity has received significant attention from both scientists and marketing practice, which resulted in a large number of articles and books on the subject (e.g. Aaker, 1991 and 1996; Aaker and Keller, 1990; Farquhar1990; Aaker and Biel, 1993; Keller, 1993; Agarwal and Rao, 1996; Yoo et al., 2000; Morgan, 2000; Rio, et al., 2001; Datta, 2003, Moore et al., 2002; Keller, 2003). The importance of brand equity consists of numerous benefits for companies that own brands. One of the benefits provided by high brand equity is the possibility of brand extension to other product categories. Generally, brand extension is defined as the use of an existing brand name for entry into a new product category (Aaker and Keller, 1990). When compared to new brand names, brand extensions have lower advertising costs and higher sales (Smith and Park, 1992). Successful brand extensions contribute to the higher brand equity of the original brand (Dacin and Smith, 1994; Keller and Aaker, 1992); However, unsuccessful extensions may reduce the brand equity of the parent brand (Aaker, 1993; Loken and John, 1993). Aaker and Keller (1990) developed a model for consumer evaluation of brand extensions and several authors worked on a generalization of this model (Barrett et al., 1999; Bottomley and Doyle, 1996; Sunde and Brodie, 1993).

In addition, brand equity increases (1) the willingness of consumers to pay premium prices, (2) the possibility of brand licensing, (3) the efficiency of marketing communication, (4) the willingness of stores to collaborate and provide support, (5) elasticity of consumers to price reductions, and (6) inelasticity of consumers to prices increases, and reduces the company’s vulnerability to marketing activities of the competition and their vulnerability to crises.