Customer-Based Brand Equity for Global Brands: A Multinational Approach

Transcription

1 Journal of Euromarketing, 18: , 2009 Copyright c Taylor & Francis Group, LLC ISSN: print / online DOI: / Customer-Based Brand Equity for Global Brands: A Multinational Approach Eda Atilgan Serkan Akinci Safak Aksoy Erdener Kaynak ABSTRACT. Focusing on the dimensions and measurement, this study is based on the concept of brand equity for global brands with empirical evidence from three economically and culturally dissimilar countries USA, Turkey, and Russia. The brand equity for global brands can be measured under four basic dimensions: perceived quality, brand loyalty, brand associations, and brand trust. Emergence of brand trust as a new dimension instead of brand awareness complies well with recent literature on global branding, global consumption orientation, and corporate reputation. KEYWORDS. Branding and brand management, structural equation modeling, brand equity, global brands INTRODUCTION Brand equity has been an issue of increasing importance in recent years. It is defined as the difference in consumer choice between the focal branded product and an unbranded product given the same level of product features (Yoo & Donthu, 2001). In other words, it represents the utility difference in terms of a positive marketing outcome, which is created by a branded product compared to that of the generic version of the same product. In the marketing literature, this incremental utility or positive marketing outcome is viewed both from customer- and firm-based perspectives. The consumer-based perspective focuses on customer mind-set and is explained with such constructs as attitudes, awareness, associations, attachments, and loyalties (Keller & Lehmann, 2001). The firm-based perspective, however, uses product-market outcomes such as price premium, market share, relative price, and financial-market outcomes such as brand s purchase price and discounted cash flow of license fees and royalties (Ailawadi, Lehmann, & Neslin, 2003; Keller & Lehmann, 2001). The revenue premium measure developed recently by Ailawadi et al. and defined as the difference in revenue (Net Price Volume) Eda Atilgan is Assistant Professor of Marketing, Department of Business Administration, Akdeniz Unviersity, Antalya, Turkey. Serkan Akinci is Assistant Professor of Marketing, Department of Business Administration, Akdeniz University, Antalya, Turkey. Safak Aksoy is Professor of Marketing, Department of Business Administration, Akdeniz University, Antalya, Turkey. Erdener Kaynak, Editor-in-Chief of the Journal of Euromarketing, is Professor of Marketing and Chair of the Marketing Program at the School of Business Administration of the Pennsylvania State University at Harrisburg. Address correspondence to Eda Atilgan, Akdeniz University, Faculty of Economics and Administrative Sciences, Department of Business Administration, Antalya, Turkey. eatilgan@akdeniz.edu.tr 115

2 116 JOURNAL OF EUROMARKETING between a branded good and a corresponding private label can also be considered within the firm-based perspective. In sum, there are different approaches to the concept of brand equity depending on the actors, measures, and the final purpose of using it. Turning to customer-based brand equity, it is claimed that the conceptualization and operationalization of customer-based brand equity is somewhat elusive (Punj & Hillyer, 2004). Brand researchers have devoted considerable attention to develop and test such brand-related constructs as brand loyalty (e.g., Amine, 1998; Day, 1969; Jacoby & Chestnut, 1978; Yi & Jeon, 2003), awareness (e.g., Bird & Ehrenberg, 1966; Greenberg, 1958; Laurent, Kapferer, & Roussel, 1995; MacInnis, Shapiro, & Mani, 1999), associations (e.g., Uggla, 2004; Van Osselaer & Janiszewski, 2001), perceived quality (e.g., Erdem, Zhao, & Valenzuela, 2004; Teas & Agarwal, 2000), and trust (e.g., Chaudhuri & Holbrook, 2001; Delgado-Ballester, Munuera- Alemán, & Yagüe-Guillén, 2003; Fournier & Yao, 1997). These established constructs are also included in various customer-based brand equity models (e.g., Aaker, 1991, 1996; Agarwal & Rao, 1996; Keller, 1993; Yoo, Donthu, & Lee, 2000). Although it is apparent that customer-based brand equity has multiple dimensions, there is no general agreement in current marketing literature as to the nature and content of these dimensions. Previous research has proposed two (e.g., Faircloth, Capella, & Alford, 2001; Keller, 1993), three (e.g., Han & Collins, 2002; Netemeyer et al., 2004), four (e.g., Aaker, 1991; Yoo et al., 2000), five (e.g., Lassar, Mittal, & Sharma, 1995), and even eight (e.g., Vazquez, Del Rio, & Iglesias, 2002) dimensions. However, many of these brand equity dimensions have not been systematically measured or validated within a nomological framework (Netemeyer et al., 2004). For example, the existence and function of trust have not been fully investigated within the context of brand equity. On the globalization front, branding has received increasing attention from marketing academicians. The two prominent reasons for this are increased cross-border population mobility and electronic mobility, both of which contributed to faster transfer of ideas and a global convergence in consumer tastes and values (Quelch, 1999). Global brands, as defined by Aaker and Joachimsthaler (1999), are those brands whose positioning, advertising strategy, personality, look, and feel are in most respects the same from one country to another. Reviewing the top 10 global brands, Quelch identified seven common features: strength in home market (generating funds for a global rollout), geographical balance (certain level of awareness, recognition and sales all over the world), addressing similar consumer needs worldwide, consistent positioning, country of origin, product category focus, and corporate name. From consumers perspective, consumers perception is important that the brand is marketed in multiple countries and is generally recognized as global in these countries. According to Steenkamp, Batra, and Alden (2003), the appeal of global brands arises from three different but not mutually exclusive sources: higher perceived quality, higher prestige, and the psychological benefits of perceived brand globalness. From firms viewpoint, on the other hand, the drivers of global branding are economies of scale, growing consumer segments with similar needs and tastes, risks of time-consuming local modifications, and emerging consumer preference for brands with global image. Global branding, however, might also be a trap for managers if not handled carefully. In this context, Aaker and Joachimsthaler (1999) drew attention to three basic points. First, economies of scale may be elusive because of existing cultural differences between foreign markets. Second, top management may face difficulties in forming a successful global brand team. Third, global brands can not be imposed on all foreign markets in a standard way because of the image differences across these countries. Overall, global brands are powerful institutions because of their pervasiveness but require a nuanced approach when managed in different foreign markets. Given these accumulation of knowledge on brand equity and global branding briefly, it is apparent that the amount of empirical research integrating the two subjects is limited. By addressing the aforementioned gaps, we seek to clarify and validate the dimensions of customer-based

3 Atilgan et al. 117 brand equity for global brands in a multinational setting. The central premise of this research is to review the existing brand equity models for global brands by way of measuring several underlying constructs. Specifically, departing from the two well-known models of brand equity (Aaker, 1991; Keller, 1993), we first review a set of related underlying dimensions which are reported in the marketing literature. Second, we propose a brand equity model based on a new dimensionality and validate it for two global brands in three culturally dissimilar countries according to Hofstede and Hofstede s (2005) parameters. Our research is unique in three ways. First, we unify and complement previous works that have examined consumer-based brand equity with different approaches but not necessarily referring to global brands. Second, we integrate brand trust into the brand equity model and explain its linkages with other underlying constructs. Third, the proposed model for global brands is validated by culturally diverse countries. ALTERNATIVE CONCEPTUALIZATIONS OF EQUITY In recent brand equity literature, there are two prominent theoretical views that provide valuable insights into the body of customerbased brand equity (see Figure 1). Aaker (1991) defined four basic dimensions of customer-based brand equity: perceived quality, brand awareness, brand associations, and brand loyalty. These dimensions are reviewed in more detail in the following parts of this article. Another prominent theoretical conceptualization is Keller s (1993) customer-based brand equity model. The basic premise of Keller s (1993) customer-based brand equity model is that the power of a brand lies in what customers have learned, felt, seen, and heard about the brand as a result of their experiences over time (Keller, 2003, p. 59). His model is an insightful way to represent how brand knowledge is the key to creating brand equity. Keller (1993) viewed customer-based brand equity as the differential effect of brand knowledge on consumer response to the marketing of the brand (p. 2). He conceptualized the sources of brand knowledge as brand awareness and brand image. In brief, the customer-based brand equity dimensions of both Aaker s (1991) and Keller s (1993) models are strictly intersecting. What Keller (1993) left out from Aaker s framework in defining the customer-based brand equity is the brand loyalty dimension. Yoo et al. (2000) extend Aaker s (1991) model by placing brand equity as a separate construct between the dimensions of brand equity and FIGURE 1. Alternative Conceptualizations of Brand Equity A: Brand Equity Model (Aaker, 1991) B: Brand Equity Model (Keller, 1993) Brand Equity Brand Loyalty Brand Awareness Perceived Quality Brand Associations Brand Knowledge Brand Awareness Brand Image Other Proprietary Brand Assets

4 118 JOURNAL OF EUROMARKETING the value for the customer and the firm. They also add price, store image, distribution intensity, advertising spending, and price deals as antecedents of brand equity with their significant effects on the dimensions of brand equity. In their model, brand awareness and brand associations dimensions have emerged as a single dimension, whereas perceived quality and brand loyalty are retained as separate dimensions. Yoo and Donthu (2001) also developed and validated a cross-culturally invariant multidimensional consumer-based brand equity scale containing these dimensions. To sum up, the most commonly cited brand equity studies are briefly reviewed in Table 1. Although all these valuable models define the fundamental pillars of brand equity, there is still want for potential contributions with respect to the quantitative clarifications of the defined dimensions, their measurement, and their adequacy for global brands. PROPOSED FACTOR STRUCTURE FOR EQUITY We departed from two different consumerbased definitions of brand equity in the related literature. The first one is that of Yoo and Donthu (2001) as given at the beginning of this article: The difference in consumer choice between the focal branded product and an unbranded product given the same level of product features (p. 1). As explicated in Yoo and Donthu s model, which is briefly explained earlier, this definition refers to the major dimensions that account for the consumer choice. The second definition is that of the Brand Equity Board quoted by Keller (2003): Brands with equity provide an ownable, trustworthy, relevant, distinctive promise to consumers (p. 43). In our view, it complements and further strengthens the first definition with the inclusion of trust. Relying on the synergy of these two definitions and the review of past TABLE 1. Mostly Cited Brand Equity Studies Author Dimensions of Brand Equity Related Findings Keller (1993) Brand awareness, brand image When the consumer is familiar with the brand and holds some favorable, strong, and unique brand associations in the memory, then customer-based brand equity occurs. Park and Srinivasan (1994) Lane and Jacobson (1995) Cobb-Walgren, Ruble, and Donthu (1995) Aaker (1996) Yoo, Donthu, and Lee (2000 ) Berry (2000) Yoo and Donthu (2001) Brand associations (Attribute-based and non-attribute-based component of brand equity) Brand attitude, brand name familiarity Perceived quality, brand awareness, brand associations, advertising awareness Brand loyalty, perceived quality, brand awareness, brand associations Brand loyalty, perceived quality, brand awareness/associations Brand awareness, brand meaning (customer s dominant perceptions) Brand loyalty, perceived quality, brand awareness/associations The non-attribute-based component of brand equity appears to play a more dominant role in determining a brand s equity. The stock market participants responses to brand extension announcements depend on brand attitude and familiarity. The brand with greater advertising budget yielded substantially higher levels of brand equity. In turn, the brand with the higher equity generated significantly greater preference and purchase intentions. Four dimensions of brand equity represent customer perceptions of the brand and could be applied across markets and products. Brand equity is positively related to perceived quality, brand loyalty, and brand associations. The relationship of perceived quality and brand associations to brand equity is much weaker than the relationship of brand loyalty to brand equity. Positive service brand equity emerges from the synergy of brand awareness and brand meaning. A multidimensional brand equity scale is validated across Americans, Korean Americans and Koreans samples.

5 Atilgan et al. 119 FIGURE 2. The Proposed Brand Equity Model EQUITY PERCEIVED QUALITY LOYALTY ASSOCIATIONS AWARENESS TRUST research, we took perceived quality, brand loyalty, brand associations, brand awareness, and brand trust as the five basic consumer-related dimensions central to brand equity (see Figure 2). We expect them to be distinct but highly correlated. A more detailed discussion of these dimensions regarding their relationships with brand equity are presented next. Perceived Quality In the customer-based brand equity frameworks (Aaker, 1996; Dyson, Farr, & Hollis, 1996; Farquhar, 1989; Keller, 1993), perceived quality is considered a primary dimension. Performance and features are some of the product quality dimensions (Yoo et al., 2000). Service quality dimensions, on the other hand, reflect the characteristics of a service business such as reliability, responsiveness, and tangibles (Parasuraman, Zeithaml, & Berry, 1985). The main reason that perceived quality is a primary dimension in brand equity models is that it has a strategic effect on brand equity, by reducing the perceived risk (Aaker, 1991; Erdem et al., 2004; Keller, 1993). It also creates a basis for brand differentiation and extension (Aaker, 1991), and offers a price premium advantage for firms (Keller, 1993; Netemeyer et al., 2004). For global brands, the importance of perceived quality is also evident. For example, based on the results of a qualitative research in 41 countries, Holt, Quelch, and Taylor (2004) identified quality signal as a distinct dimension in consumers perception of global brands. They concluded that a company s global stature indicates whether it excels on quality. Thus, there is a general consensus that perceived quality is among the fundamental constructs of brand equity. Brand Loyalty Several meanings have been attributed to brand loyalty after the concept was first introduced by Copeland (1923). The concept is examined mainly from two broad aspects, which are behavioral (or purchase) loyalty (Agrawal, 1996; Chaudhuri & Holbrook, 2001; Huang & Yu, 1999) and attitudinal loyalty (Chaudhuri & Holbrook, 2001; Huang & Yu, 1999; Moreau, Lehmann, & Markman, 2001; Pritchard, Havitz, & Howard, 1999). Behavioral loyalty refers to repeat purchases and is related with how often and how much consumers purchase a brand (Aaker, 1991; Keller, 2003). It also encompasses the comparison of the brand with other brands offering similar benefits (Aaker, 1996). Fournier and Yao (1997) and Dekimpe, Steenkamp, Mellens, and Abeele (1997) suggested that an ideal measure of brand loyalty should incorporate both behavioral and attitudinal aspects. For instance, consumers with a great deal of attitudinal attachment to a brand may state that they love the brand (Keller, 2003, p. 93) or consider themselves loyal customer[s] (Yoo et al., 2000). Another distinguishing feature of brand loyalty is the sense of community (Keller, 2003). Identification with a brand community (such as friends or acquaintances) is a necessity

6 120 JOURNAL OF EUROMARKETING for active engagement with the brand (Keller, 2003, p. 93). However, brand loyalty, as one of the most important determinants of brand equity (Aaker, 1991; Yoo et al., 2000), has received relatively less attention in terms of cross cultural issues and empirical approaches (e.g., Yoo & Donthu, 2001). Brand Associations Brand associations are defined as anything linked in memory to a brand (Aaker, 1991, p. 109), such as product attributes (Yoo et al., 2000), brand name (Zinkhan & Prenshaw, 1994), and relative price (Aaker, 1996). Keller (1993) discussed this construct under brand image and classifies these associations into three major categories: attributes, benefits, and attitudes. According to Keller (1993), customer-based brand equity occurs when the consumer is aware of the brand and holds some favorable, strong, and unique brand associations in memory (p. 17). In the customer-based brand equity model of Netemeyer et al. (2004), brand uniqueness is taken as a primary brand equity dimension, whereas brand awareness, familiarity, popularity, organizational associations, and brand image consistency are taken as related brand equity dimensions. Aaker (1996), on the other hand, suggested using organizational associations as the core brand association/differentiation dimension, especially when brands have similar attributes or when a corporate brand is involved. These associations reflect the business philosophy of the organization that lies behind the brand. Aaker (1996), respectively, gave the example of McDonald s brand and some types of related brand associations such as being successful, being oriented toward the community, and striving for high quality (p. 113). For global brands, consumers preference may be attributed to the associations of higher prestige the brand holds (Kapferer, 1997). Similarly, Steenkamp et al. (2003) noted that perceived globalness of a brand, which is positively associated with its prestige, creates brand value. Brand Awareness Brand awareness relates to the likelihood that a brand name will come to mind and the ease with which it does so (Keller, 1993, p. 3). It is based on both brand recognition and recall (Aaker, 1991; Keller, 1993). The studies regarding brand awareness are mostly focused on its effect on brand choice. For example, Hoyer and Brown (1990) found that participants with no brand awareness tended to select the highquality brand on the final choice significantly more often than those with brand awareness. Holden (1993) probed the importance of brand awareness in brand choice, and his qualitative research indicates that brand awareness appears to be operating as a cue to brand retrieval. In the context of consumer-based brand equity, Agarwal and Rao (1996) measured brand awareness by unaided recall and familiarity. They found that the familiarity measure is highly consistent with other brand equity measures, but the recall measure is not convergent. Other issues related to brand awareness, such as the sources of brand awareness (Greenberg, 1958), its underlying structure (Laurent et al., 1995), and its effect on consumer purchase behavior, are also studied (Bird & Ehrenberg, 1966), but, as with other brand equity dimensions, its effect on overall brand equity is narrowly investigated in the literature. The studies of Yoo et al. (2000) and Yoo and Donthu (2001) incorporate this dimension into their empirical models but have not detected any direct effect on brand equity. Therefore, in their studies, it is simply combined with brand associations. Brand Trust Rotter (1967) defined the trust construct as a generalized expectancy held by an individual that the word of another can be relied upon. Although trust is a concept that has received notable attention in several different social sciences literatures (see Kramer & Tyler, 1996), brand trust is an unexplored dimension that appears to be important and worthy of investigation in terms of its effect on customer-based brand equity. Chaudhuri and Holbrook (2001) defined brand trust as the willingness of the average consumer to rely on the ability of the brand to perform its stated function (p. 82). In line with this definition, Delgado-Ballester et al. (2003) developed a brand trust scale. They

7 Atilgan et al. 121 found that brand trust is significantly correlated with measures of satisfaction and brand loyalty and further emphasized that it is the essence of the value that a strong brand provides for customers. Brand trust may also be evaluated as a consistency and credibility clue by customers. Erdem, Swait, and Valenzuela (2006) tested the effect of brand credibility on consumers brand choice. They stated that brand credibility requires that consumers perceive the brand as having (1) the ability (expertise) and (2) willingness (trustworthiness) to deliver continuously what has been promised (p. 35). In their signaling perspective, credibility is the primary determinant of customer-based brand equity, and it is the key element in brand equity formation and management (Erdem & Swait, 1998; Erdem et al., 2006). These two components of brand credibility are discussed under the dimensions of brand trust such as brand reliability (competence or technical ability), brand intentions, and brand predictability (see Delgado- Ballester, 2004; Lau & Lee, 1999). Although brand trust has been a component in different brand frameworks (e.g., Chaudhuri & Holbrook, 2001; Erdem & Swait, 1998; Erdem et al., 2006), we have little knowledge of its direct impact on brand equity. Because its effect on relationship commitment (Morgan & Hunt, 1994), product consideration and purchase (Erdem et al., 2006), satisfaction and loyalty (Lau & Lee, 1999), and brand performance (Chaudhuri & Holbrook, 2001) have so far been discussed in the literature, the missing point here remains that, with the other primary brand equity dimensions (e.g., perceived quality and brand associations), brand trust has not been directly involved in any brand equity framework yet. There are, however, strong references made, implicitly and explicitly, to the importance of consumer s trust not only in the brand equity literature but also in global branding and global consumption studies. We propose that brand trust should be considered as a distinct dimension in brand equity framework. The justification for this is as follows: First, Aaker (1991, p. 267) referred to the concept of reduced risk provided by local brands as opposed to global brands. We believe that this is a challenge for global firms to develop risk-reducing/trust building counterstrategies to improve the strength of their brands. Second, Aaker (1991, p. 270) illustrated in his model that providing value by enhancing customer s confidence is directly linked with the five brand equity dimensions, which eventually leads to brand equity. Third, building trust has direct benefits for global companies. In their recent study on global consumption orientation, Alden, Steenkamp, and Batra (2006) drew attention to this point. They underlined that a global brand may attempt to overcome opposition by performing actions that are locally valued. For example, in many developing countries Coca-Cola has invested in the infrastructure to produce clean water, benefiting both the company and the local population (Alden et al., 2006). We think that this incremental increase in trust will have a positive effect on brand equity. Fourth, trust can be a strategic tool in serving global consumer segments. Concentrating on global brands, Holt et al. (2004) reported that consumers ascribe certain characteristics to global brands and use those attributes as criteria while making purchase decisions. Thus, global firms are likely to benefit from creating appropriate identity-affirming myths that will cater to consumer s self identity. Based on this, Holt et al. suggested global companies to build credible myths for their potential customers. Giving the example of Microsoft s successful advertising tagline, Where do you want to go today? they point out the importance of earning credibility by addressing consumer s dream of self-empowerment. Fifth, trust is directly associated with the dimensions of global brands and corporate reputation. For example, social responsibility is noted to be as one of the key dimensions of global brands (Holt et al., 2004). Adding that social and environmental responsibility and reliable and financially strong company are among the key dimensions of customer-based corporate reputation, Walsh and Beatty (2007) also drew attention to the significant positive association detected between trust and these two dimensions. Overall, we propose that trust can be considered as a separate dimension in measuring brand equity particularly for global companies.

8 122 JOURNAL OF EUROMARKETING PROCEDURES AND MEASURES IN THE MAIN STUDY For empirical investigations, the McDonald s and Coca-Cola brands were selected because they represent their respective service and product categories well, based on Interbrand s most valuable global brand ranking list in 2004 (Interbrand, 2004). In the Interbrand s 2004 list, Coca-Cola ranked number one among product brands, whereas Disney came first in the service brands category. Because the Disney brand existed only in two countries (USA and France), the most valuable number two service brand, McDonald s, was selected instead. The items used in the constructs were adapted from the related literature. For instance, perceived quality statements were derived from the studies of Parasuraman et al. (1985), Aaker (1991, 1996), and Erdem and Swait (1998); brand loyalty statements were derived from the studies of Dekimpe et al. (1997), Yoo et al. (2000), and Keller (2003). Brand associations and awareness statements were adapted from the studies of Agarwal and Rao (1996), Aaker (1996), and Yoo et al. (2000). For brand awareness, we used separate statements referring to brand recall (recall the symbol or logo), top of mind awareness (first-named brand), and brand knowledge (knowing the product/food and beverage assortment). Brand trust statements were derived from the studies of Erdem and Swait (1998) and Delgado- Ballester et al. (2003). Here, we referred to brand reliability (the consumer s belief that the brand accomplishes its value promise), brand intentions (the consumer s belief that the brand would hold the consumer s interest when unexpected problems with the consumption arise), and credibility (truthfulness and dependability). For brand association/differentiation measures, we used Aaker s (1996) brand-as-product and brand-as-organization perspectives. The former focuses on the brand s value proposition, which involves a functional benefit (value for money and reasons to buy the brand over competitors). The latter plays an important role by showing that a brand represents more than products and services. Organizational associations are particularly helpful when brands are similar with respect to attributes, when the organization is visible, or when a corporate brand is involved. In determining the specific words in the brand association statements, we relied on the slogans used as well as the two brands general global performance. The first associative word, liveliness, was derived by the authors from McDonald s Food,fun, family and Coca-Cola s Life tastes good slogans ( Keller, 2003, p. 693). Success was chosen as the second associative word (organizational association), as both brands were among the most valuable global brands in product and service categories, respectively. As we aimed to perform the empirical investigations in three different countries (USA, Turkey, and Russia), the final questionnaire was judged by five marketing professors, including two from the USA, two from Turkey, and one from Russia, with backgrounds in both measurement and management. This resulted in the development of 36 items for the McDonald s brand and 34 items for the Coca-Cola brand, and retained a minimum of 4 and a maximum of 6 items per construct. We aimed for comparable samples of respondents in three different countries, which we intentionally chose because they differ in terms of fundamental cultural traits. In doing this, we followed the steps of Keillor, Hult, and Kandemir (2004) for selecting those countries that had (a) generalizability (i.e., those countries that broadly displayed an international dispersion) and (b) data availability. For international dispersion, we used four of the five cultural value indicators developed by Hofstede and Hofstede (2005): power distance (PDI), uncertainty avoidance (UAI), individualism (IDV), masculinity (MAS), and long-term orientation (LOT). The fifth dimension, LOT, had to be excluded from the present study as Hofstede and Hofstede (2005) measured it on 39 countries only, dropping off Turkey and Russia. According to the first four indices, the USA scored 40, 46, 91, and 62, respectively. Thus, the U.S. culture can be described as having a small distance to power, a low level of uncertainty avoidance, and high levels of individualism and masculinity. In contrast, Russia scored 93, 95, 39, and 36, respectively,

9 Atilgan et al. 123 on PDI, UAI, IDV, and MAS. These scores place Russia toward the other end of the scale compared to the USA. The third country, Turkey, scored 66, 85, 37, and 45 on PDI, UAI, IDV, and MAS, respectively, according to Hofstede and Hofstede s (2005) methodology. When the scores of these three countries are plotted in dual index combinations (i.e., C1: PDI vs. IDV; C2: UAI vs. IDV; C3: UAI vs. PDI; C4: PDI vs. MAS), it is clearly seen that the USA and Russia are placed near the two opposite extremes, whereas Turkey remains between them almost in all cases. Thus, we can claim that the three countries chosen for this study represent well three different cultures and enhance external validity. To collect consumer survey data, we first judgmentally selected the largest (i.e., availability of food courts including more than three globally known restaurants and several international and domestic retail stores) and centrally located shopping malls of Pennsylvania (USA), Moscow (Russia), and Antalya (Turkey). Then, we obtained official permission from the respective mall administrations for a certain period. Thus, our sampling frame consisted of those consumers visiting in the specified courts within the given period. Questionnaires were randomly delivered to the subjects while they were sitting in the food court area. Data were collected via a self-administered questionnaire, which required respondents to indicate their level of agreement/disagreement on a 9-point Likert-type scale. At the end of the data collection period, 1,542 usable questionnaires were obtained for two brands from three countries. Scale Purification The responses were analyzed via principal components and item analysis. For each brand equity dimension, if an item consistently had low (<0.50) or very high (>0.95) factor loadings (Bagozzi & Yi, 1988), consistently had low or very high item-to-total correlations, and was consistently highly correlated with another item within its construct (>0.80), it was considered for deletion (Netemeyer et al., 2004). Overall, these statistical heuristics and judgment procedures resulted in the retention of 18 items for each product and service brand equity scale (a minimum of 4 and a maximum of 6 per brand equity construct). During this procedure, the items related to the brand awareness dimension were totally eliminated. This finding was not surprising because Yoo et al. (2000) had designed awareness and association dimensions in a unified form. The final refined scales for both brands (see Figure 3), which consisted of a four-item measure of quality (PQ1-PQ4), a six-item measure of loyalty (BL1-BL6), a four-item measure of trust (BT1-BT4), and a four-item measure of association (BA1-BA4; see Appendix 1), were FIGURE 3. The Refined Brand Equity Model EQUITY PERCEIVED QUALITY LOYALTY ASSOCIATIONS TRUST PQ 1 PQ 2 PQ 3 PQ 4 BL 1 BL 2 BL 3 BL 4 BL 5 BL 6 BA 1 BA 2 BA 3 BA 4 BT 1 BT 2 BT 3 BT 4

10 124 JOURNAL OF EUROMARKETING FIGURE 4. Brand Equity: Four Basic Dimensions (McDonald s) φ 11=.80 φ 21=.68 φ 31=.67 φ 41=.64 φ 41=.58 φ 41=.75 PERCEIVED QUALITY LOYALTY ASSOCIATIONS TRUST λ 11=.92 λ 21=.93 λ 32=1.00 λ 42=.87 λ 53=.92 λ 63=.86 λ 74=.92 λ 84=.93 I 1 I 2 I 3 I 4 I 5 I 6 I 7 I 8 subjected to a confirmatory factor analysis for validation using LISREL VIII to assess psychometric properties (Burton, Lichtenstein, Netemeyer, & Garretson, 1998; Kohli, Jaworski, & Kumar, 1993). For confirmatory factor analysis, the partial disaggregation method was used (see Bagozzi & Heatherton, 1994; Dabholkar, Thorpe, & Rentz, 1996) because previous evidence by Dabholkar et al. (1996) showed that it allows meaningful research by combining items into composites to reduce higher levels of random error and yet it retains all the advantages of structural equations (p. 9). In this process, we randomly combined items for each construct to get two combined indicators (see Figures 4 and 5). Confirmatory factor analysis results, average variance extracted, and composite construct reliability were summarized in Table 2 for each brand in multiple countries. Variance extracted estimates of 0.50 and above indicate convergent validity among items in a given scale (Bagozzi & Yi, 1988; Fornell & Larcker, 1981). Regarding the scale reliability, the alpha meets the recommended levels (.70) in the literature (Nunnally, 1978). FIGURE 5. Brand Equity: Four Basic Dimensions (Coca-Cola) φ 11=.84 φ 21=.76 φ 31=.64 φ 41=.68 φ 41=.62 φ 41=.84 PERCEIVED QUALITY LOYALTY ASSOCIATIONS TRUST λ 11=.90 λ 21=.93 λ 32=.99 λ 42=.88 λ 53=.90 λ 63=.86 λ 74=.89 λ 84=.93 I 1 I 2 I 3 I 4 I 5 I 6 I 7 I 8

11 Atilgan et al. 125 TABLE 2. Summary Results of Confirmatory Factor Analysis for Multisample (MS) and Country Specific Results McDonald s Coca-Cola United United Sample MS States Russia Turkey MS States Russia Turkey n χ df RMSEA RMR GFI AGFI Perceived Quality ( I 1 + I 2 ) Composite Reliability Average Variance Extracted Brand Loyalty ( I 3 + I 4 ) Composite Reliability Average Variance Extracted Brand Associations ( I 5 + I 6 ) Composite Reliability Average Variance Extracted Brand Trust ( I 7 + I 8 ) Composite Reliability Average Variance Extracted Note. RMSEA = root mean square error of approximation; RMR = root mean square residual; GFI = goodness of fit; AGFI = adjusted goodness of fit. The tests of discriminant validity recommended in the literature were conducted (Anderson & Gerbing, 1988; Fornell & Larcker, 1981). First, the correlations between the four constructs (completely standardized phi estimates) for the four-factor model ranged from 0.60 to 0.88 (see Figure 4) for McDonald s for the three countries, and 0.59 to 0.92 (see Figure 5) for Coca-Cola for the three countries. All phi estimates were significantly less than 1. Second, the more rigorous test of discriminant validity assessed whether the square of the phi estimate between two constructs was less than the average extracted variance estimates for the two constructs. The average variances extracted were between 0.71 and 0.93 (McDonald s) and 0.65 and 0.89 (Coca-Cola) for the three countries (see Table 2). The square of the phi estimates ranged from 0.36 to 0.77 (McDonald s), and from 0.35 to 0.85 (Coca-Cola). In line with these results, all of the estimates were less than the average variance extracted for the corresponding construct pairs, except quality and trust for Coca-Cola in the Russian sample. In summary, discriminant validity was supported by all the tests. For assessing cross-national equivalence of measures, we followed the procedure of Steenkamp and Baumgartner (1998). To estimate configural invariance, we assumed the proposed factor model with four common factors and fixed the first elements in each latent variable to one in all three country groups and in two brand categories separately (Steenkamp & Baumgartner, 1998). For Coca-Cola brand, the estimated configural invariance model s global goodness of fit statistics were satisfactory (Table 3). Although the chi-square was significant, χ 2 (42) = , p<.001, it was disregarded owing to the statistic s well-known sensitivity to sample size (Cheung & Rensvold, 2000). To assess model fit, we used other fit indices, including Bentler s (1990) comparative fit index (CFI; 0.994), Steiger s (1990) root mean square error of approximation (RMSEA; 0.069), and Tucker and Lewis s (1973) Tucker Lewis

12 126 JOURNAL OF EUROMARKETING TABLE 3. Model Comparisons for Brand Equity Across Countries Data χ 2 df RMSEA CFI TLI McDonald s Equality of g and µ g n.a. n.a. Equality of g Equality of µ g n.a n.a. Configural invariance Metric invariance Partial metric invariance Coca-Cola Equality of g and µ g n.a. n.a. Equality of g Equality of µ g n.a. n.a. Configural invariance Metric invariance Partial metric invariance index (TLI; 0.988) that all indicated an acceptable fit. For McDonald s brand, the estimated configural invariance model s global goodness of fit statistics were also satisfactory, χ 2 (42) = , p<.001 (RMSEA = , CFI = 0.987, TLI = 0.993). In line with these indices, we concluded that the factorial structure of the proposed brand equity construct was similar across countries for both product and service categories (Steenkamp & Baumgartner, 1998). Further metric invariance was tested separately for Coca-Cola and McDonald s samples, respectively. Factor loadings were constrained to be invariant across the countries for this purpose. As shown in Table 3 for the Coca-Cola brand, the chi-square value of the full metric invariance model increased significantly, χ 2 (8) = , p<.001. According to the expected parameter change statistic in LISREL, the reason for significant increase in chi-square was the lack of invariance in two items across countries (L2 in USA and Russia and Q2 in Turkey). Also, in McDonald s brand, chi-square value of the full metric invariance model increased significantly, χ 2 (8) = , p<.001. The expected parameter change showed that L2 in Russia was the reason for the significant increase in McDonald s brand. These results exposed the need to test the partial metric invariance in both categories. To test the partial metric invariance, the determined parameters in loyalty and quality for Coca-Cola, and the parameter in loyalty for McDonald s in Russia, were sequentially relaxed. The chi-square value gathered from Coca-Cola s final partial metric invariance model was not significantly worse than the configural invariance model, χ 2 (6) = 9.996, p >.010. RMSEA, CFI, and TLI yielded similar results (Table 3). Similarly the chi-square value gathered from McDonald s was not significantly worse than that from the configural invariance model, χ 2 (7) = , p >.010. This test shows that the brand equity scale items difference scores can be meaningfully compared across countries. Assessing both configural and partial metric invariance tests successfully led us to say that proposed brand equity construct can be conceptualized in the same way across countries (Steenkamp & Baumgartner, 1998). DISCUSSION AND CONCLUSION Theoretical Contributions Since the 1990s, customer-based brand equity has been highly debated among both academics and practitioners. There are two major studies that are most cited on the conceptualization of brand equity. Aaker s (1991) model involves five basic dimensions in capturing brand equity. The other study, Keller s (1993) model, is similar to Aaker s (1991) model in terms of its content

13 Atilgan et al. 127 but defines the concept under two major dimensions that are further broken down into several attributes. Both perspectives highlight important aspects of brand equity and their contribution to the literature is undeniable. However, there are still potential contribution areas with respect to the dimensions, their justification with quantitative methodology, and cross cultural measurement issues in the global context. Departing from the definitions that the difference in consumer choice between the focal branded product and an unbranded product given the same level of product features (Yoo & Donthu, 2001) and brands with equity provide an ownable, trustworthy, relevant, distinctive promise to consumers (Brand Equity Board, as cited in Keller, 2003, p. 43), and from the past literature, this study provides sound empirical evidence for the validity of a unified conceptual model for global brands. Our model of brand equity consists of four dimensions: perceived quality, brand loyalty, brand associations, and brand trust. The paths in the research model are confirmed across three culturally different countries and two global brands. This finding indicates that each of the four dimensions is appropriately conceived as a determinant of brand equity. Our model reinforces the existence of some dimensions, such as perceived quality and brand loyalty, which were reported in the previous studies (Aaker, 1991; Yoo & Donthu, 2001; Yoo et al., 2000). Brand associations in our model have also emerged as a distinct dimension as originally conceptualized in Aaker s (1991) model, whereas it is combined with brand awareness into a single dimension in some other studies (Yoo & Donthu, 2001; Yoo et al., 2000). The main contribution of our model, however, comes from the inclusion of brand trust as a new dimension and elimination of brand awareness. This is not surprising because there are strong references made, implicitly and explicitly, to the existence and importance of trust not only in the brand equity literature but also in global branding and global consumption studies. One early indication is that of Aaker s (1991) model in which providing value by enhancing customer s confidence is a moderating step between the five brand equity dimensions and brand equity. However, the most important support to our findings is given by Holt et al. (2004). In their extensive study with 3,300 consumers in 41 countries on how consumers value global brands, they found that most people choose one global brand over another because of differences in the brand s global qualities (p. 7). This implies that consumers are aware of global brands but the brand s real value comes from its global qualities such as its quality and consumer trust. In fact, they more strongly emphasize this by pointing out to three fundamental dimensions with which consumers assess global brands: quality signal, global myth, and social responsibility. The last two dimensions are strongly related to brand trust as the authors recommend global companies to create credible global myths and take social responsibility initiatives. They concluded that people trust global companies that are seen to have sacrificed their interests for the good of the whole, and these companies will reap its benefits in the long run. Indeed, this point is further stressed in more recent studies. In the context of global consumption orientation, Alden et al. (2006) underlined that a global brand may attempt to overcome opposition by performing actions that are locally valued. Similarly, Walsh and Beatty (2007) asserted that customers tend to prefer to deal with companies that have proven reliable in the past. They further identified reliable and financially strong company and social and environmental responsibility to be among the determinants of corporate reputation, both of which are found to be highly correlated with the construct of trust. Based on our findings and recent literature, we therefore claim that brand trust surpasses brand awareness for global companies. As quoted several years ago by Maruca (1994) from Whirlpool s CEO, creating awareness by flag planting acquiring and establishing businesses all over the world is not enough to be truly global, the real challenge for global companies rests with having the best technologies and processes for designing, manufacturing, selling, and servicing the products which in some way addresses the merit of earning consumers trust. Thus, there seems to be two major reasons for the disappearance of the brand awareness dimension in quantitatively tested models. First, as our

14 128 JOURNAL OF EUROMARKETING model suggests particularly for the top global brands, it is surpassed by brand trust, which is a more advanced construct in the global context for brand equity. Second, as previously demonstrated by other researchers (Yoo & Donthu, 2001; Yoo et al., 2000), there is at least a partial convergence between brand awareness and brand associations dimensions which weakens the existence of brand awareness as a distinct dimension in brand equity. The present research has also three marginal contributions with view to its approach and data. First, although there is a dearth of studies on brand equity in marketing literature, only a small fraction of them are specifically designed for global brands. This study, therefore, aims to construct a linkage between the subjects of brand equity and global branding. Second, the present study shows that the proposed brand equity construct can be conceptualized and measured in the same way across countries. So far, however, there has been very limited empirical study (e.g., Erdem et al., 2006) devoted to the brand equity construct that is applied to culturally diverse customers with a global perspective. Third, as we used data collected in consumption sites from real consumers including the mature ones (compared to student samples), our findings are likely to capture older consumer s psychological attachments to brand names such as length of exposure to the brand, nostalgic associations with the brand, and information-processing abilities (Yoo & Donthu, 2001). Managerial Implications It is highly unlikely, if not impossible, for a single perspective of brand equity to satisfy all the characteristics of the ideal measure (Ailawadi et al., 2003). However, the customerbased perspective of brand equity offers attractive clues to managers. Instead of being solely confined to internal sources of the firm or concentrating on financial performance measures in the marketplace, managers can benefit from monitoring such brand equity dimensions as brand associations, perceived quality, brand loyalty, and brand trust. We believe that tailoring marketing strategies according to these variables is critical in designing global consumer solutions. For managers, brand trust in particular deserves special attention, not only because it is a major dimension of brand equity as demonstrated in this research but also it is directly related to several dimensions of global brands and company reputation. More specifically, managers should elaborate on trust-building aspects of the marketing mix with a view on social and environmental responsibility programs. Today, the revenues of some global corporations have begun to exceed the gross national product of many of the less developed countries where they do business (Potts & Matuszewski, 2004). This trend fuels an increasing pressure on global companies to take over some governmental functions and cater for the social well-being of the communities. By demonstrating their trustworthiness, global companies are more likely to contribute to their brand equity in the long run. Finally, managers should also notice the causal order among perceived quality, brand trust, and brand loyalty. Marketing programs should give the priority to perceived quality as it will drive consumers trust and loyalty. Research Limitations and Future Directions Our work has some limitations. First, although the study covers three dissimilar countries and two global brands, generalizability of the results bears risks, as our samples are not nationally representative. The relatively insufficient sample size of the Russian data for construct validity did not fulfill the conventional requirement of approximately five observations per scale item for conducting factor analysis (Hair, Ralph, Tatham, & Black, 1998; Stevens, 1996). Therefore, future research should be directed toward multiple country and multiple brand studies. Second, our approach does not cover product-market outcomes such as price premium, market share, relative price, and financial-market outcomes such as brand s purchase price and discounted cash flow of license fees and royalties (Ailawadi et al., 2003; Keller & Lehmann, 2001). Thus future research can be directed toward the integration of these perspectives. Third, our model does not predict the variation in brand equity with particular