A model for brand equity determination using structural equations modeling

Abstract

A variety of methods for different purposes have been used to express the concept of brand equity. It is a noticeable value of brand, which makes the customer pay higher for the product with a brand comparing with identical product without that brand. Financially speaking, brand equity is an asset for the organization as it generates cash flow and profit in the future. The factors in brand equity must, therefore, be identified within financial and non-financial framework. By indicating the variables and the indices and consulting with the academic experts in marketing, brand, and accounting the results of structural equations modeling (SEM) revealed that significance level between brand equity and financial variables was 4.82 (>1.96). That is, the relationship between brand equity and financial variable were significant at %99. Regarding the relationship between brand equity and marketing variables, the significant level was 4.25 (>1.96) and thus the relationship was significant at %99. The results can be used as practical guideline for the stakeholders and owners of brands and also helpful for successful management of brand value.