The Beginning of Brand Management as a Study Discipline the 80s-90s Brand Equity Finally Defined

It is not clear who invented the expression of brand equity, but few uses of it have been traced before the mid-eighties (Ambler & Styles 1995). In the mid 80s academics such as Kevin Lane Keller, began studying the effects and importance of memory factors in advertising and its relation with consumer brand evaluations in the moment of purchase, “Memory Factors in Advertising: the effect of advertising Retrieval Cues on Brand Evaluations, 1987”. In this article Keller was already studying the importance of having memorable brand associations that could improve the performance of advertising, these were some of the early foundations of the concept of “brand equity”.

Soon the value of a brand image became more evident in the management world, as some of the most important events in the history of brand management occurred in 1988 with a series of brand acquisitions including when Philip Morris purchased Kraft for $12.6 billion – six times its book value. The price difference between balance sheet valuations and the price paid was attributed to the value of the word and images related to “Kraft”. This meant that for the first time a big monetary value had been assigned to something that had previously been abstract and unquantifiable: a brand name.

One year after this and other similar incidents, Abratt, R. presented a model aiming at integrating the external and internal marketing approaches in his article “A new approach to the corporate image management process, 1989”. In this article he argues that there must be a fit between the corporate brand identity, the employees’ view of the identity (the internal culture), the marketing communication, and stake-holders (the external environment).

In the early 90s David A. Aaker and Keller published articles such as “Consumer Evaluations of Brand Extensions” 1990; and Managing Brand Equity: The Impact of Multiple Extensions” 1990.

These two articles were followed by the now classic book Managing Brand Equity by David A. Aaker 1991.

In this book Aaker presented the concept of brand equity accompanied by various historical examples and cases. The model of brand equity was presented by Aaker following the need to manage brands strategically by creating, developing and exploiting each of the five assets that would create value; namely: Brand Loyalty, Brand Awareness, Perceived Quality, Brand Associations and other proprietary brand assets.

This model would finally come to clarify for managers exactly how brand equity contributes to value.

In the first page of his classic book, David Aaker quoted Larry Light, who was then described as a prominent advertising research professional; and who today is CEO of Arcature a brand management consultancy company and former McDonalds Chief Marketing Officer 2002-2005 (CMO, Im lovin’ it campaign).

“Larry was asked by the editor of the Journal of Advertising Research for his perspective on marketing three decades into the future. Light’s analysis was instructive: The marketing battle will be a battle of brands, a competition for brand dominance. Businesses and investors will recognize brands as the company’s most valuable assets. This is a critical concept. It is a vision about how to develop, strengthen, defend, and manage a business… It will be more important to own markets than to own factories. The only way to own markets is to own market dominant brands.”

Today we believe that Larry was right, in fact following the publication of the Aaker’s classic book managing brand equity, this concept became one of the most widely discussed topics both in the managerial and academic marketing world. In America, the Coalition for Brand Equity chaired by Larry Light was founded in 19913435. Following in 1992 Jean Noel Kapferer published another influential book “Strategic Brand Management – Creating and sustaining brand equity long term, where the concept of brand identity was first conceptualized.

Since then, there have been a numerous amount of publications on branding, definitions, approaches, models and strategies.

Some of the most influential perspectives, introduced throughout the 90s include brand as a legal instrument: Crainer (1995); differentiating device: Aaker (1991), Kotler et al (1996); Company/ Corporate: Diefenback (1992), Aaker (1996); Identity System: Kapferer (1992), Aaker (1996); Image: Keeble (1991); Relationship: Woodward (1991), Arnold (1992), Blackston (1992); Adding value: de Chernatony and McDonald (1994); Evolving entity: Goodyear (1996), etc.

Also in the mid nineties, in 1994, the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) broadened the legal definition of trademark to encompass “any sign…capable of distinguishing the goods or services of one undertaking from those of other undertakings”. This means that if a company can prove that its consumers are able to perceive a certain sign as a distinguishing factor for their offering, this can be legally protected. In the legal world of brands (trademarks), after an enhanced distinctiveness through use has been proven, in the US and Europe, today it is possible to register colors, holograms (picture sequence), shapes, sounds (e.g. MGM lion’s roar, Pentium Processor, McDonald’s 5 tone logo “Dabadabada” Im lovin’ it, etc) and even smell.

Academically speaking, today there are as many brand management books as there are brands and as many branding definitions as there are managers. In an effort to reduce confusion among executives and academics L. de Chernatony has categorized brands into thirteen main purposes: as logo (symbol/design/name), legal instrument, as company (corporate branding), as shorthand (simplifying decision making process by facilitating the processing of large amount of information), as risk reducer (decision based on least perceived risk), as positioning device (brand association with a particular category), as personality (functional and emotional values related to a person’s traits).


The Origin of Branding read here

Branding during the Industrial Economy read here

The Origin of Brand Advertising read here

The Origin of Brand Management read here

The Origin of the Marketing Concept read here

Marketing Communication, Positioning and Differentiation read here

The 80s-90s and Brand Equity read here

New Trends in the early 2000’s read here

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UrielThe Beginning of Brand Management as a Study Discipline the 80s-90s Brand Equity Finally Defined

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