Building strong brands – does it matter?

Abstract

Brand equity has proven, through several decades of research, to be a primary source of competitive advantage and future earnings (Yoo & Donthu, 2001). Building strong brands has therefore become a priority for many organizations, with the presumption that building strong brands yields these advantages (Yasin et al., 2007). A quantitative survey was conducted at Sunnmøre in Norway in order to answer the two developed research questions. - Does the brand equity dimensions; brand associations, brand awareness, perceived quality and brand loyalty, have a significant positive effect on the brand equity for the brand Dybvik, and does brand equity have a significant positive effect on price premium? - Does country-of-origin image have a significant positive effect on the brand equity dimensions for the brand Dybvik? The first research question (research model 1) builds on Aaker’s (1991) brand equity model, where he argues that brand associations, brand awareness, perceived quality, and brand loyalty have a significant positive effect on based brand equity. In addition to investigate Aaker’s (1991) conceptual framework of brand equity, the relationship between brand equity and price premium were investigated, as brand associations, brand awareness, perceived quality and brand loyalty all have the potential to provide a brand with a price premium (Aaker, 1991). The sample was split based on whether the respondents had tasted Dybvik clip fish previously (group 0), or if they had not, or did not know if they have tasted Dybvik clip fish previously (group 1). The results indicated, that for group 0, brand loyalty and brand associations had a significant positive effect on brand equity, and for group 1, only brand loyalty had a significant positive effect on brand equity. In addition, results showed a significant positive relationship between brand equity and price premium, indicating that when brand equity increases, so does the willingness to pay a price premium. The second research question (research model 2) aims to explore the relationship between country-of-origin image and brand equity dimensions to extend existing brand equity research (e.g. Aaker, 1991; Keller, 1993; Yoo & Donthu, 2001). Results showed significant positive relationships between country-of-origin image and the brand equity dimensions included in this thesis (brand associations, brand awareness, perceived quality and brand loyalty) for group 0, whereas for group 1, country-of-origin image was found to have a significant positive effect on brand associations, brand awareness and perceived quality.