Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter November 23, 2019

Brand Image and its Determinants: A Stochastic Frontier Approach Analysis

  • Vinay Goyal EMAIL logo

Abstract

This paper addresses an important issue to find relationship between the brand image and its determinants. Based on a data set of 136 brand characteristics measured for 700 top American national brands obtained from a survey of 4769 respondents as well as secondary sources (Lovett, Peres, and Shachar. 2014. “A Data Set of Brands and Their Characteristics.” Marketing Science 33 (4): 609–17), this study adopted an established econometrics approach (Stochastic frontier analysis) that has not been extensively applied in the marketing literature. The approach discussed in this paper can be used as an analysis framework where the concept of efficiency is brought into the picture in analyzing the relationship between the brand image with its associates. It is found that competency and familiarity are two main features that increase brand equity, whereas perceived risk and excitement decreases it.

References

Aaker, D. A. 1991. Managing Brand Equity: Capitalizing on the Value of a Brand Name. New York: Free Press.Search in Google Scholar

Aaker, D. A. 1992. “The Value of Brand Equity.” Journal of Business Strategy 13 (4): 27–32.10.1108/eb039503Search in Google Scholar

Aaker, D. A. 1996. “Measuring Brand Equity Across Products and Markets.” California Management Review 38 (3).10.2307/41165845Search in Google Scholar

Aaker, D. A., and K. L. Keller. 1993. “Interpreting Cross-cultural Replications of Brand Extension Research.” International Journal of Research in Marketing 10 (1): 55–59.10.1016/0167-8116(93)90033-USearch in Google Scholar

Aaker, J. L. 1997. “Dimensions of Brand Personality.” Journal of Marketing Research 34 (3): 347–56.10.1177/002224379703400304Search in Google Scholar

Aigner, D., C. A. K. Lovell, and P. Schmidt. 1977. “Formulation and Estimation of Stochastic Frontier Production Function Models.” Journal of Econometrics 6 (1): 21–37.10.1016/0304-4076(77)90052-5Search in Google Scholar

Ailawadi, K. L., D. R. Lehmann, and S. A. Neslin. 2003. “Revenue Premium as an Outcome Measure of Brand Equity.” Journal of Marketing 67 (4): 1–17.10.1509/jmkg.67.4.1.18688Search in Google Scholar

Battese, G. E., and T.J. Coelli. 1993. A Stochastic Frontier Production Function Incorporating A Model for Technical Inefficiency Effects. Working Papers in Econometrics and Applied Statistics No 69, Armidale: Department of Econometrics. University of New England.Search in Google Scholar

Battese, G. E., and T. J. Coelli. 1995. “A Model for Technical Inefficiency Effects in A Stochastic Frontier Production Function for Panel Data.” Empirical Economics 20 (2): 325–32.10.1007/BF01205442Search in Google Scholar

Biel, A. L. 1992. “How Brand Image Drives Brand Equity.” Journal of Advertising Research 32 (6): 6–12.Search in Google Scholar

Brodie, R. J., M. S. Glynn, and V. Little. 2006. “The Service Brand and the Service-dominant Logic: Missing Fundamental Premise or the Need for Stronger Theory?” Marketing Theory 6 (3): 363–79.10.1177/1470593106066797Search in Google Scholar

Cao, Zixia, and Alina Sorescu. 2013. “Wedded Bliss or Tainted Love? Stock Market Reactions to the Introduction of Cobranded Products.” (December 4, 2013). Marketing Science, 32 (6): 939–59. DOI: 10.1287/mksc.2013.0806. Available at SSRN: https://ssrn.com/abstract=2358778.Search in Google Scholar

Charnes, A., W. W. Cooper, and E. Rhodes. 1978. “Measuring the Efficiency of Decision-making Units.” European Journal of Operational Research 2 (6): 429–44.10.1016/0377-2217(78)90138-8Search in Google Scholar

Cheng-Hsui Chen, A. 2001. “Using Free Association to Examine the Relationship between the Characteristics of Brand Associations and Brand Equity.” Journal of Product & Brand Management 10 (7): 439–51.10.1108/10610420110410559Search in Google Scholar

Costa, R., and S. Evangelista. 2008. “An AHP Approach to Assess Brand Intangible Assets.” Measuring Business Excellence 12 (2): 68–78.10.1108/13683040810881207Search in Google Scholar

Diaz, M. A., and R. Sánchez. 2008. “Firm Size and Productivity in Spain: a Stochastic Frontier Analysis.” Small Business Economics 30 (3): 315–23.10.1007/s11187-007-9058-xSearch in Google Scholar

Dong, X. Y., and L. Putterman. 1997. “Productivity and Organization in China’s Rural Industries: a Stochastic Frontier Analysis.” Journal of Comparative Economics 24 (2): 181–201.10.1006/jcec.1997.1415Search in Google Scholar

Dutta, S., O. Narasimhan, and S. Rajiv. 1999. “Success in High-technology Markets: Is Marketing Capability Critical?” Marketing Science 18 (4): 547–68.10.1287/mksc.18.4.547Search in Google Scholar

Dutta, S., O. M. Narasimhan, and S. Rajiv. 2005. “Conceptualizing and Measuring Capabilities: Methodology and Empirical Application.” Strategic Management Journal 26 (3): 277–85.10.1002/smj.442Search in Google Scholar

East, R., K. Hammond, and W. Lomax. 2008. “Measuring The Impact of Positive and Negative Word of Mouth on Brand Purchase Probability.” International Journal of Research in Marketing 25 (3): 215–24.10.1016/j.ijresmar.2008.04.001Search in Google Scholar

Fall, F., A. M. Akim, and H. Wassongma. 2018. “DEA and SFA Research on the Efficiency of Microfinance Institutions: A Meta-Analysis.” World Development 107: 176–88.10.1016/j.worlddev.2018.02.032Search in Google Scholar

Farquhar, P. H., and P. M. Herr. 1993. The Dual Structure of Brand Associations, 263–77. Hillsdale, NJ: Lawrence Erlbaum Associates.Search in Google Scholar

Feldwick, P. 1996. “Do We Really Need ‘Brand Equity’?” Journal of Brand Management 4 (1): 9–28.10.1057/bm.1996.23Search in Google Scholar

Feng, H., N. A. Morgan, and L. L. Rego. 2015. “Marketing Department Power and Firm Performance.” Journal of Marketing 79 (5): 1–20.10.1509/jm.13.0522Search in Google Scholar

Feng, H., N. A. Morgan, and L. L. Rego. 2017. “Firm Capabilities and Growth: the Moderating Role of Market Conditions.” Journal of the Academy of Marketing Science 45 (1): 76–92.10.1007/s11747-016-0472-ySearch in Google Scholar

Fenn, P., D. Vencappa, S. Diacon, P. Klumpes, and C. O’Brien. 2008. “Market Structure and the Efficiency of European Insurance Companies: A Stochastic Frontier Analysis.” Journal of Banking & Finance 32 (1): 86–100.10.1016/j.jbankfin.2007.09.005Search in Google Scholar

Fournier, S. 1998. “Consumers and Their Brands: Developing Relationship Theory in Consumer Research.” Journal of Consumer Research 24 (4): 343–73.10.1086/209515Search in Google Scholar

Gerdtham, U. G., M. Löthgren, M. Tambour, and C. Rehnberg. 1999. “Internal Markets and Health Care Efficiency: a Multiple-output Stochastic Frontier Analysis.” Health Economics 8 (2): 151–64.10.1002/(SICI)1099-1050(199903)8:2<151::AID-HEC411>3.0.CO;2-QSearch in Google Scholar

Greene, W. 2003. “The Economic Approach to Efficiency Analysis.” In The Measurement of Productive Efficiency and Productivity Growth, edited by H. Fried, C. Lovell, and S. Schmidt, 92–250. New York, NY: Oxford University Press.10.1093/acprof:oso/9780195183528.003.0002Search in Google Scholar

Greene, W. H. 1983. “Simultaneous Estimation of Factor Substitution, Economies of Scale, Productivity, and Non-Neutral Technical Change.” In Developments in Econometric Analyses of Productivity, 121–44. Dordrecht: Springer.10.1007/978-94-009-7406-7_6Search in Google Scholar

Hattori, T. 2002. “Relative Performance of US and Japanese Electricity Distribution: an Application of Stochastic Frontier Analysis.” Journal of Productivity Analysis 18 (3): 269–84.10.1023/A:1020695709797Search in Google Scholar

Hoeffler, S., and K. L. Keller. 2003. “The Marketing Advantages of Strong Brands.” Journal of Brand Management 10 (6): 421–45.10.1057/palgrave.bm.2540139Search in Google Scholar

Hsieh, M. H. 2004. “Measuring Global Brand Equity Using Cross-National Survey Data.” Journal of International Marketing 12 (2): 28–57.10.1509/jimk.12.2.28.32897Search in Google Scholar

Hulland, J., H. S. Todiño Jr., and D. J. Lecraw. 1996. “Country-of-Origin Effects on Sellers’ Price Premiums in Competitive Philippine Markets.” Journal of International Marketing 4 (1): 57–79.10.1177/1069031X9600400105Search in Google Scholar

Kamakura, W. A., and G. J. Russell. 1993. “Measuring Brand Value with Scanner Data.” International Journal of Research in Marketing 10 (1): 9–22.10.1016/0167-8116(93)90030-3Search in Google Scholar

Kapferer, J. N. 2006. “The Two Business Cultures of Luxury Brands.” In Brand Culture, 75–83. Routledge.10.4324/9780203002445-13Search in Google Scholar

Kathuria, V. 2001. “Foreign Firms, Technology Transfer and Knowledge Spillovers to Indian Manufacturing Firms: a Stochastic Frontier Analysis.” Applied Economics 33 (5): 625–42.10.1080/00036840121940Search in Google Scholar

Keaveney, S. M. 1995. “Customer Switching Behavior in Service Industries: An Exploratory Study.” Journal of Marketing 59 (2): 71–82.10.1177/002224299505900206Search in Google Scholar

Keller, K. L. 1993. “Conceptualizing, Measuring, and Managing Customer-based Brand Equity.” The Journal of Marketing 57: 1–22.10.1177/002224299305700101Search in Google Scholar

Keller, K. L. 2001. Building Customer-Based Brand Equity: A Blueprint for Creating Strong Brands, 3–27. Cambridge, MA: Marketing Science Institute.Search in Google Scholar

Keller, K. L., T. Apéria, and M. Georgson. 2008. Strategic Brand Management: A European Perspective. Pearson Education.Search in Google Scholar

Keller, K. L., M. G. Parameswaran, and I. Jacob. 2011. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. Pearson Education India.Search in Google Scholar

Krishnan, H. S. 1996. “Characteristics of Memory Associations: A Consumer-based Brand Equity Perspective.” International Journal of Research in Marketing 13 (4): 389–405.10.1016/S0167-8116(96)00021-3Search in Google Scholar

Kumbhakar, S. C. 1990. “Production Frontiers, Panel Data, and Time-varying Technical Inefficiency.” Journal of Econometrics 46 (1): 201–11.10.1016/0304-4076(90)90055-XSearch in Google Scholar

Kumbhakar, S C., and C.A.K. Lovell. 2000. Stochastic Frontier Analysis. Cambridge: Cambridge University Press.10.1017/CBO9781139174411Search in Google Scholar

Lehmann, D. R., K. L. Keller, and J. U. Farley. 2008. “The Structure of Survey-Based Brand Metrics.” Journal of International Marketing 16 (4): 29–56.10.1509/jimk.16.4.29Search in Google Scholar

Libai, B., E. Muller, and R. Peres. 2009. “The Social Value of Word-of-mouth Programs: Acceleration versus Acquisition.” Marketing Science 11.Search in Google Scholar

Libai, B., E. Muller, and R. Peres. 2013. “Decomposing the Value of Word-of-mouth Seeding Programs: Acceleration versus Expansion.” Journal of Marketing Research 50 (2): 161–76.10.1509/jmr.11.0305Search in Google Scholar

Louviere, J. J., and R. D. Johnson. 1990. “Reliability and Validity of the Brand-anchored Conjoint Approach to Measuring Retailer Images.” Journal of Retailing 66 (4): 359–83.Search in Google Scholar

Lovett, M., R. Peres, and R. Shachar. 2014. “A Data Set of Brands and Their Characteristics.” Marketing Science 33 (4): 609–17.10.1287/mksc.2014.0861Search in Google Scholar

Lovett, M. J., R. Peres, and R. Shachar. 2013. “On Brands and Word of Mouth.” Journal of Marketing Research 50 (4): 427–44.10.1509/jmr.11.0458Search in Google Scholar

MacLachlan, D. L., and M. G. Mulhern. 1991. Measuring Brand Equity with Conjoint Analysis. In Proceedings of the Sawtooth Software Conference, 113–26.Search in Google Scholar

Meeusen, W., and J.V. Broeck. 1977. “Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error.” International Economic Review 18 (2): 435–44.10.2307/2525757Search in Google Scholar

Mizik, N., and R. Jacobson. 2008. “The Financial Value Impact of Perceptual Brand Attributes.” Journal of Marketing Research 45 (1): 15–32.10.1509/jmkr.45.1.15Search in Google Scholar

Moore, G. C., and I. Benbasat. 1991. “Development of an Instrument to Measure the Perceptions of Adopting an Information Technology Innovation.” Information Systems Research 2 (3): 192–222.10.1287/isre.2.3.192Search in Google Scholar

Myers, C. A. 2003. “Managing Brand Equity: A Look at the Impact of Attributes.” Journal of Product & Brand Management 12 (1): 39–51.10.1108/10610420310463126Search in Google Scholar

Ostlund, L. E. 1974. “Perceived Innovation Attributes as Predictors of Innovativeness.” Journal of Consumer Research 1: 23–29.10.1086/208587Search in Google Scholar

Ourusoff, A., M. Ozanian, P. B. Brown, and J. Starr. 1992. “What’s in a Name? What the World’s Top Brands are Worth.” Financial World 161 (17): 32–49.Search in Google Scholar

Page, G., and H. Fearn. 2005. “Corporate Reputation: What Do Consumers Really Care About?” Journal of Advertising Research 45 (3): 305–13.10.1017/S0021849905050361Search in Google Scholar

Park, C. S., and V. Srinivasan. 1994. “A Survey-based Method for Measuring and Understanding Brand Equity and Its Extendibility.” Journal of Marketing Research 31 (2): 271–88.10.1177/002224379403100210Search in Google Scholar

Pavlyuk, D. 2011. “Application of the Spatial Stochastic Frontier Model for Analysis of a Regional Tourism Sector.” Transport and Telecommunications 12 (2): 28–38.Search in Google Scholar

Peppers, D., and M. Rogers. 1995. “A New Marketing Paradigm: Share of Customer, Not Market Share.” Managing Service Quality: An International Journal 5 (3): 48–51.10.1108/eb054500Search in Google Scholar

Ratchford, B. T., and R. Vaughn. 1989. “On the Relationship between Motives and Purchase Decisions: Some Empirical Approaches.” Advances in Consumer Research 16 (1): 293–99.Search in Google Scholar

Richins, M. L. 1983. “Negative Word-of-mouth by Dissatisfied Consumers: A Pilot Study.” J. Marketing 47 (1): 68–78.10.1177/002224298304700107Search in Google Scholar

Ritter, C., and L. Simar. 1997. “Pitfalls of Normal-gamma Stochastic Frontier Models.” Journal of Productivity Analysis 8 (2): 167–82.10.1023/A:1007751524050Search in Google Scholar

Rosko, M. D., and R. L. Mutter. 2008. “Stochastic Frontier Analysis of Hospital Inefficiency A Review of Empirical Issues and an Assessment of Robustness.” Medical Care Research and Review 65 (2): 131–66.10.1177/1077558707307580Search in Google Scholar

Shachar, R., T. Erdem, K. M. Cutright, and G. J. Fitzsimons. 2011. “Brands: the Opiate of the Nonreligious Masses?” Marketing Science 30 (1): 92–110.10.1287/mksc.1100.0591Search in Google Scholar

Sharkey, B. 1989. “The People’s Choice.” Adweek’s Marketing Week 30 (November 27): 6–10.Search in Google Scholar

Simon, C. J., and M. W. Sullivan. 1993. “The Measurement and Determinants of Brand Equity: A Financial Approach.” Marketing Science 12 (1): 28–52.10.1287/mksc.12.1.28Search in Google Scholar

Srinivasan, V. 1979. “Network Models for Estimating Brand-Specific Effects in Multi-attribute Marketing Models.” Management Science 25 (1): 11–21.10.1287/mnsc.25.1.11Search in Google Scholar

Stahl, F., M. Heitmann, D. R. Lehmann, and S. A. Neslin. 2012. “The Impact of Brand Equity on Customer Acquisition, Retention, and Profit Margin.” Journal of Marketing 76 (4): 44–63.10.1509/jm.10.0522Search in Google Scholar

Steenkamp, Jan-Benedict, and Inge Geyskens. 2014. “Manufacturer and Retailer Strategies to Impact Store Brand Share: Global Integration, Local Adaptation, and Worldwide Learning.” Marketing Science 33: 6–26. 10.1287/mksc.2013.0801.Search in Google Scholar

Stevens, P. A. 2005. “A Stochastic Frontier Analysis of English and Welsh Universities.” Education Economics 13 (4): 355–74.10.1080/09645290500251581Search in Google Scholar

Swait, J., T. Erdem, J. Louviere, and C. Dubelaar. 1993. “The Equalization Price: A Measure of Consumer-perceived Brand Equity.” International Journal of Research in Marketing 10 (1): 23–45.10.1016/0167-8116(93)90031-SSearch in Google Scholar

Till, B. D., D. Baack, and B. Waterman. 2011. “Strategic Brand Association Maps: Developing Brand Insight.” Journal of Product & Brand Management 20 (2): 92–100.10.1108/10610421111121080Search in Google Scholar

Uggla, H. 2004. “The Brand Association Base: A Conceptual Model for Strategically Leveraging Partner Brand Equity.” Journal of Brand Management 12 (2): 105–23.10.1057/palgrave.bm.2540208Search in Google Scholar

Wang, C. H. 2015. “Integrating Kansei Engineering with Conjoint Analysis to Fulfil Market Segmentation and Product Customization for Digital Cameras.” International Journal of Production Research 53 (8): 2427–38.10.1080/00207543.2014.974840Search in Google Scholar

Wang, H. J. 2003. “A Stochastic Frontier Analysis of Financing Constraints on Investment: the Case of Financial Liberalization in Taiwan.” Journal of Business & Economic Statistics 21 (3): 406–19.10.1198/073500103288619016Search in Google Scholar

Wang, Z., and H. G. Kim. 2017. “Can Social Media Marketing Improve Customer Relationship Capabilities and Firm Performance? Dynamic Capability Perspective.” Journal of Interactive Marketing 39: 15–26.10.1016/j.intmar.2017.02.004Search in Google Scholar

Wood, L. 2000. “Brands and Brand Equity: Definition and Management.” Management Decision 38 (9): 662–69.10.1108/00251740010379100Search in Google Scholar

Xiong, G., and S. Bharadwaj. 2011. “Social Capital of Young Technology Firms and Their IPO Values: the Complementary Role of Relevant Absorptive Capacity.” Journal of Marketing 75 (6): 87–104.10.1509/jm.09.0202Search in Google Scholar

Xiong, G., and S. Bharadwaj. 2013. “Asymmetric Roles of Advertising and Marketing Capability in Financial Returns to News: Turning Bad into Good and Good into Great.” Journal of Marketing Research 50 (6): 706–24.10.1509/jmr.12.0278Search in Google Scholar

Yoo, B., N. Donthu, and S. Lee. 2000. “An Examination of Selected Marketing Mix Elements and Brand Equity.” Journal of the Academy of Marketing Science 28 (2): 195–211.10.1177/0092070300282002Search in Google Scholar

Yovovich, B. G. 1988. “What Is Your Brand Really Worth?” Adweek’s Marketing Week August 8: 18–24.Search in Google Scholar

Published Online: 2019-11-23
Published in Print: 2019-11-18

© 2019 Walter de Gruyter GmbH, Berlin/Boston

Downloaded on 5.2.2023 from https://www.degruyter.com/document/doi/10.1515/roms-2019-0037/html
Scroll Up Arrow