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The evolving brand logic: A service-dominant logic perspective

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The meanings of brand and branding have been evolving over the past several decades. This evolution is converging on a new conceptual logic, which views brand in terms of collaborative, value co-creation activities of firms and all of their stakeholders and brand value in terms of the stakeholders’ collectively perceived value-in-use. The authors argue that this new logic parallels and reflects the related, evolving service-dominant (S-D) logic in marketing. They provide an historical account of the branding literature, organize it into eras, and connect it to the evolution in marketing as captured by S-D logic. The analysis provides further support for the S-D logic of marketing and suggests a related research agenda for furthering the understanding of brand and branding. It also suggests that marketing managers might benefit from investing resources in building strong brand relationships with all of their stakeholders and a service-dominant firm philosophy built around brand value co-creation.
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CONCEPTUAL/THEORETICAL PAPER
The evolving brand logic: a service-dominant
logic perspective
Michael A. Merz &Yi He &Stephen L. Vargo
Received: 24 July 2008 / Accepted: 30 March 2009
#Academy of Marketing Science 2009
Abstract The meanings of brand and branding have been
evolving over the past several decades. This evolution is
converging on a new conceptual logic, which views brand
in terms of collaborative, value co-creation activities of
firms and all of their stakeholders and brand value in terms
of the stakeholderscollectively perceived value-in-use.
The authors argue that this new logic parallels and reflects
the related, evolving service-dominant (S-D) logic in mar-
keting. They provide an historical account of the branding
literature, organize it into eras, and connect it to the evolu-
tion in marketing as captured by S-D logic. The analysis
provides further support for the S-D logic of marketing and
suggests a related research agenda for furthering the
understanding of brand and branding. It also suggests that
marketing managers might benefit from investing resources
in building strong brand relationships with all of their
stakeholders and a service-dominant firm philosophy built
around brand value co-creation.
Keywords Service-dominant logic .Goods-dominant logic .
Branding .Brand creation .Brand evolution .Brand value .
Brand logic .Co-creation of brands .Co-creation of value
Firms are increasingly recognizing that brands are among
their most valuable assets (Madden et al. 2006; Simon and
Sullivan 1993) and are, therefore, intensifying the level of
resources directed toward building them. At least partially
in response, academics are also intensifying the attention
directed toward understanding the meaning and value of
brands and the process of branding (e.g., Berry 2000; Keller
1993; Schouten et al. 2007). This development in the
branding literature, together with a more general evolution
in academic marketing thought, is causing marketing
scholars to rethink the logic of brand and branding.
Var g o a nd L u sc h ( 2004a) posit that marketing is
evolving toward a new logic, which they identify as
service-dominant (S-D) logic. This logic (1) considers
service to be the common denominator of exchange, (2)
embraces a process orientation (service), rather than an
output orientation (goods and services), and (3) makes
the customer endogenous to value creation by arguing that
value is always co-created with customers (and others),
rather than unilaterally created by the firm and then
distributed. From this perspective, goods remain important,
but are identified as vehicles for service provision.
This evolution in the logic of marketing in general is
paralleled by and reflected in the branding literature and,
therefore, we believe that S-D logic and the brand literature
can reinforce and inform each other. That is, the logic of
brand and branding is also evolving and has shifted from
the conceptualization of brand as a firm-provided property
J. of the Acad. Mark. Sci.
DOI 10.1007/s11747-009-0143-3
M. A. Merz (*)
Department of Marketing and Decision Sciences,
College of Business, San José State University,
One Washington Square,
San Jose, CA 95192, USA
e-mail: merz_m@cob.sjsu.edu
Y. H e
Department of Marketing and Entrepreneurship,
College of Business and Economics,
California State University, East Bay,
25800 Carlos Bee Boulevard,
Hayward, CA 94542, USA
e-mail: yi.he@csueastbay.edu
S. L. Vargo
Shidler College of Business, University of Hawai`i,
2404 Maile Way,
Honolulu, HI 96822, USA
e-mail: svargo@hawaii.edu
of goods to brand as a collaborative, value co-creation
activity of firms and all of their stakeholders. This shift in
brand logic brings with it a new understanding of brand
value, which we define in terms of the perceived use value
determined collectively by all stakeholders.
The purposes of this article are threefold. The first is to
map the evolution of the branding literature and organize it
into brand eras to delineate the various conceptualizations
of brand. We investigate the evolving brand logic from a
theoretical (i.e., academic), rather than managerial (i.e.,
firm), perspective and identify four eras: Individual Goods-
Focus Brand Era (1900s1930s), Value-Focus Brand Era
(1930s1990s), Relationship-Focus Brand Era (1990s
2000), and, most recently, Stakeholder-Focus Brand Era
(2000 and Forward). These eras overlap because, as Vargo
and Lusch (2004a, p. 2) note, changing logics more or less
seep into the individual and collective mind-set of scientists
in a discipline,rather than abruptly stopping and starting.
A second purpose is to connect the evolution of the
branding literature to the evolution in marketing as captured
by the S-D logic of marketing. Doing so provides
additional support for S-D logic and reveals the collabora-
tive, value co-creation nature of the evolving brand logic.
A third purpose is to suggest a research agenda for future
branding research based on our analysis of the branding
literature. Specifically, we suggest using S-D logic as a
foundation on which to build future branding research.
To accomplish these purposes, we first review the evolu-
tion in marketing thought towards S-D logic. Next, we
provide a historical account of the branding literature and
link the eras to the S-D logic of marketing. Finally, we dis-
cuss future research directions and managerial implications.
The evolving service-dominant logic
Formal academic marketing inherited its foundation from
neo-classical economic theory at its conception at the
beginning of the twentieth century (Vargo and Morgan
2005). Accordingly, it was built on the then-dominant,
goods-centered model of economic exchange, which
viewed units of output, embedded with value in the
production process, as the central components of exchange.
With the emergence of the subdiscipline of services
marketing in the mid-to-late 1900s, marketing broadened
its perspective to include the exchange of more than
manufactured goods (Fisk et al. 1993). From the goods-
dominant perspective, serviceswere conceptualized as
something like tangible goods, except for being character-
ized by intangibility (lack a tactile quality of goods),
inseparability (simultaneously produced and consumed),
heterogeneity (cannot be standardized), and perishability
(cannot be produced ahead of demand and inventoried)
(Zeithaml et al. 1985), qualities that made them somewhat
less desirable than tangible goods and required that they be
marketed somewhat differently.
VargoandLusch(2004b) argued that, rather than
differentiating services from goods, these four character-
istics suggest that the service marketing subdiscipline is
built on the same goods- and manufacturing-based model as
the marketing of goods and called this perspective goods-
dominant(G-D) logic (Vargo and Lusch 2004a). G-D
logic suggests that the firm producesvalue and that
customers (consumers) are exogenous to value creation
and, as such, constitute operand resourcesresources on
which an operation or act is performed to produce benefit
(in this case, for the producing firm). Operand resources
can be contrasted with operant resourcesresources capa-
ble of causing benefit by directly acting on other resources,
either operand or operant, to create benefit (Constantin and
Lusch 1994).
Several scholars (e.g., Grönroos 1994; Gummesson
1998; Shostack 1977) have intimated that G-D logic is
limiting, if not flawed, and have called for a more
encompassing and solid paradigmatic foundation. Some
have developed theories and research streams that seem to
imply and converge on an alternative logic. For example,
resource-advantage theory examines the link between firm
resources (e.g., competences) and sustained competitive
advantage (Hunt and Morgan 1995; Hunt 2000). Similarly,
core competency theory suggests that the key of business
success lies in core competency or the collective knowledge
available to the extended enterprise, including suppliers and
customers (Prahalad and Ramaswamy 2000). Moreover,
relationship-based and network-based perspectives opened
up new possibilities in constructing marketing theories and
guiding marketing practice (e.g., Achrol and Kotler 1999;
Gummesson 1998; Grönroos 2000). More generally, Vargo
and Lusch (2008b) have suggested that the subdisciplines
(e.g., service marketing and business marketing) of mar-
keting have provided skunkworksfor the stealthy
rebuilding of marketing theory because of the inadequacy
of G-D logic.
Grounded in the convergence of these recent theoretical
developments, Vargo and Lusch (2004a;2008a) suggested
that marketing is evolving toward a service-based model of
all exchange, which has now become known as service-
dominant (S-D) logic.This evolving S-D logic highlights
co-creation of value, process orientation, and relationships.
In it, customers are endogenous to value creation and, as
such, constitute operant resources.
S-D logic is captured in ten foundational premises (FPs;
Vargo and Lusch 2004a;2008a). The most central FP (FP1)
indicates that service (rather than goods) is the fundamental
basis of exchange. Service,as used by S-D logic, is
defined as the application of competences (knowledge and
J. of the Acad. Mark. Sci.
skills) for the benefit of another entity (or the entity itself).
Thus, S-D logic shifts the focus from operandresources to
operantresources. It highlights that people exchange to
acquire the benefits of applied specialized operant resources
and, as such, exchange service for service. Tangible goods
are seen as the distribution mechanism for service provision
(FP3).
Whereas G-D logic views the produceras the creator
of value and the consumeras a user (and destroyer) of
value, S-D logic views both as resource integrators(FP9)
that co-create value (FP6). The customer is an operant
resource, rather than an operand resource (i.e., target).
Thus, S-D logic embraces a process-oriented logic (mar-
keting with), which emphasizes value-in-use, in contrast to
the traditional output-oriented models (marketing to), which
see value in terms of value-in-exchange.Therefore, S-D
logic acknowledges that value is always uniquely and
phenomenologically determined by the beneficiary (FP10)
as it uniquely integrates resources (FP9) of the provider
with other market-facing, public, and private resources
thus, what might be considered value-in-context(Vargo
et al. 2009) . This implies that exchange is relational (FP8;
Grönroos 1994; Gummesson 1998) and that firms cannot
deliver value but only make value propositions (FP7).
Taken together, these FPs imply that value must be
understood in the context of complex networks that are
part of dynamic service ecosystems, comprising not only
firms and customers but their contextual communities and
other stakeholders.
The evolving brand logic
Much as Vargo and Lusch (2004a) have argued that
marketing is evolving from G-D logic to S-D logic, we
argue that branding is also evolving. We believe that this
emerging brand logic is reflected in S-D logic. That is, this
new brand logic acknowledges that brand value is co-
created between the firm and its stakeholders. As such, it is
process-oriented and views all stakeholders as endogenous
to the brand value-creation process.
To demonstrate that the branding literature is evolving
toward a new logic, we identify four eras, which differ from
each other in terms of how brands were viewed and the
primary focus of a brands value (see Table 1and Fig. 1):
Individual Goods-Focus Brand Era (1900s1930s), Value-
Focus Brand Era (1930s1990s), Relationship-Focus Brand
Era (1990s2000), and Stakeholder-Focus Brand Era (2000
and forward). In the following, we discuss these brand eras,
highlight how they changed the dominant thinking about
brand and branding, and connect them to the evolving S-D
logic of marketing. As noted, there is overlap between the
eras.
Individual goods-focus brand era: 1900s 1930s
The concept of brand was introduced into the marketing
literature in the early 1900s (Room 1998; Stern 2006). The
central notion was that brands constituted a way for
customers to identify and recognize goods (and their
manufacturer). According to Low and Fullerton (1994,p.
176), manufacturer-branded products had clear and dis-
tinct identities. Their distinctive packaging made them
clearly identifiable on sight.As identifiers, brands allowed
replication of purchase decisions.
In support of this view, several case studies in the
Harvard Business Review (1929) reported that, after World
War I, the U.S. textile industry began to make its market
offerings clearly identifiable with the help of brand names
and that this new marketing approach proved successful in
many cases. Furthermore, one case study (Harvard Busi-
ness Review 1929, p. 109) features a cheese-cloth and
gauze manufacturer and describes the efforts of the firm to
use a special display for its cheese cloths to make them
more identifiable. A few years earlier, Smith (1915) argued
that people may be afraid to buy standardized packages of
fruit and vegetables without recognizing the manufacturer
by the means of a brand name.
Similarly, in his study of the wholesale distribution
system, Copeland (1923) found that branded goods are
more easily recognized by consumers, thereby generating
higher demand and increasing the bargaining power of
manufacturers in the distribution system. In general,
Copeland (1923, p. 286) noted that a brand is a means
of identifying the product of an individual manufacturer or
the merchandise purveyed by an individual wholesaler or
retailer.Similarly, he (p. 287) argued that when a brand
has any significance at all, it serves primarily as a cause for
recognition.
Thus, during the early 1900s, the marketing literature
viewed brands as identifiers. Investigations on branding
suggest that firms used brands to show ownership and take
responsibility for their goods. This in turn helped customers
identify and recognize a firms goods on sight (Strasser
1989). Given this view of brands, it is not surprising that
the limited academic research on brand and branding during
this time focused primarily on examining the role of
branded versus unbranded goods on customer choice (e.g.,
Copeland 1923). Brands were targeted toward potential
customers who remained passive in the brand value
creation process (operand resources).
Moreover, the focus of brand value creation was on the
individual goods because brand value was seen as being
embedded in the physical goods (operand resources) and as
being created predominantly when the goods are sold
through a discrete transaction (output orientation). Prod-
ucts, embedded with brand value, were the fundamental
J. of the Acad. Mark. Sci.
unit of exchange. Thus, brands reflected a G-D logic
perspective, with brand value determined through value-in-
exchange (see Table 1and Fig. 1).
Value-focus brand era: 1930s1990s
The literature on branding started to burgeon from the
1930s onwards. Increased attention to branding brought
with it a departure from viewing brands as merely
identifiers to viewing them also in terms of images
(Gardner and Levy 1955; Oxenfeldt and Swann 1964;
White 1959). These images were seen as perceptions that
firms create (Park et al. 1986) to enhance their competitive
advantage and their standing in their community (Welcker
1949). Communicating a clearly defined brand image was
believed to enable customers to both differentiate a brand
from its competitors (DiMingo 1988; Reynolds and Gutman
1984) and identify the needs that a brand promises to
satisfy (Roth 1995). The focus of brand value creation was
on the creation of this brand image.
More specifically, brand academics began to examine the
effects of a brands functional and symbolic benefit
Table 1 Brand eras, relevant literature, and fundamental ideas or propositions
Timeline and relevant literature Fundamental ideas or propositions
1900s-1930s: Individual Goods-Focus Brand Era Brands as Identifiers: Brands constituted a way for customers
to identify and recognize goods on sight. Brand value was
embedded in the physical goods and created when goods are
sold (output orientation). Brands, therefore, were operand
resources and had value-in-exchange. Individual goods were
branded to potential customers who remained passive in the
brand value creation process (operandresources).
Copeland (1923), Low and Fullerton (1994),
Strasser (1989)
1930s-1990s: Value-Focus Brand Era
Functional Value-Focus Branding (Brown 1950;
Jacoby and colleagues 1971,1977; Park et al. 1986)
Brands as Functional Images: Creating unique brand images
became key in an increasingly competitive environment.
Customers selected brands to solve externally generated
consumption needs. Brands were part of the market offering.
They constituted operandresources and had value-in-exchange
(output orientation). The customers remained passive in the
brand value creation process (operandresources).
Symbolic Value-Focus Branding (Gardner and
Levy 1955; Goffman 1959; Levy 1959)
Brands as Symbolic Images: Goods were seen as increasingly
similar in terms of their utilitarian attributes. Consequently,
brands were selected to solve internally generated consumption
needs. Brands were independent of the actual market offering
and had become viewed as operantresources. Brand value
was created when the goods were sold (output orientation).
Thus, brands had value-in-exchange. The customers remained
passive in the brand value creation process (operandresources).
1990s-2000: Relationship-Focus Brand Era
Customer-Firm Relationship Focus
(Aaker 1991; Blattberg and Deighton 1996;
Kapferer 1992; Keller 1993)
Brands as Knowledge: This focus highlighted that customers
constitute operantresources and thus active co-creators of
brand value. It also highlighted that brand value is the
perception of a brands value-in-use to the customers.
Customer-Brand Relationship Focus
(Aaker 1997; Fournier 1998; Gobe 2001)
Brands as Relationship Partners: This focus highlighted that
brands have personality that makes customers form dyadic
relationships with them. Thus, brand scholars acknowledged
that the brand value co-creation process is relational and thus
requires a process orientation.
Firm-Brand Relationship Focus
(Berry 2000; de Chernatony 1999; Gilly and
Wolfinbarger 1998; King 1991)
Brands as Promise: This focus identified internal customers
(employees) as important brand value co-creators and
operantresources.
2000 and Forward: Stakeholder-Focus Brand Era Brands as Dynamic and Social Processes: This most recent
era highlighted that not only individual customers but also
brand communities and other stakeholders (all stakeholders)
constitute operantresources. Thus, it highlighted that the brand
value co-creation process is a continuous, social, and highly
dynamic and interactive process between the firm, the brand,
and all stakeholders.
McAlexander et al. (2002), Muniz et al. (2001),
Muniz et al. (2005), Ballantyne and Aitken (2007),
Ind and Bjerke (2007), Jones (2005)
J. of the Acad. Mark. Sci.
associations on customerspurchase decisions. Functional-
benefit associations refer to customer perceptions about
whether the brand satisfies their utilitarian needs. Symbolic-
benefit associations refer to customer perceptions about
whether the brand satisfies their symbolic needs (Park et al.
1986; Roth 1995).
By first focusing on brandsfunctional and later on
brandssymbolic benefit associations, brand scholars in this
era increasingly began to view brands as an extension of a
firms goods with the potential not only to significantly
enhance the goodsattractiveness but also to stand on their
own (e.g., Gardner and Levy 1955). Hence, brand academ-
ics began to understand and conceptualize brands more as
operant (e.g., Symbolic Value-Focus Branding), rather than
operand (e.g., Functional Value-Focus Branding) resources.
In contrast, customers were still seen as operand resources
that were buying brands because they had formed brand
associations (driven by advertising) that promised to satisfy
their (utilitarian/symbolic) needs. That is, customers were
seen as targets to which marketers promoted their brands. In
general, brand academics broke away from the Individual
Goods-Focus Brand Era by investigating in greater detail
the effects of a brands (1) functional and (2) symbolic
benefit associations on customerschoice. These sub-eras
are discussed in the following (see also Table 1and Fig. 1).
Functional value-focus branding: brand
as functional image
During this period, academics proposed that brands add
value to a market offering by promising potential customers
certain benefits. The focus was first on functional benefits,
that is, promises to satisfy customersutilitarian needs. The
associated literature suggests that customers selected certain
brands to solve externally generated consumption needs,
due to firmspositioning of their brands in terms of solving
or avoiding current and anticipated problems for customers
(Fennell 1978).
For example, de Chernatony and McWilliam (1989)
suggest that customers select a brand because its functional
image associations align with their externally generated
consumption needs and wants. Jacoby and colleagues
(1971;1977) found that brand names constitute the most
useful information source for customers when making
decisions, thanks to their functional benefit associations.
Similarly, Brown (1950) examined reasons why customers
Evolving Toward a New Dominant Logic for Branding
Individual Goods-Focus
Brand Era
Value-Focus
Brand Era
Relationship-Focus
Brand Era
Stakeholder-Focus
Brand Era
Brand as Identifier Brand as Functional/ Symbolic Image Brand as Knowledge, Relationship
Partner and Promise
Brand as Dynamic and Social Process
Output Orientation Output Orientation Process Orientation Process Orientation
Customers as Operand Resources Customers as Operand Resources External and Internal (Employees)
Customers as Operant Resources
All Stakeholders as Operant
Resources
Brands are Operand Resources Brands are Operand/t Resources Brands are Operant Resources Brands are Operant Resources
Brand Value through Value-in-
Exchange
Brand Value through Value-in-
Exchange
Brand Value through Value-in-Use Brand Value through Value-in-Use
Goods-
Focus
Functional
Value-Focus
Symbolic
Value-Focus
Dyadic ->
Network
Individual ->
Dynamic
Internal ->
Social
Customer-
Firm Focus
Customer-
Brand Focus
Firm-Brand
Focus
Stakeholder-
Focus
Figure 1 Evolving toward a new dominant logic for branding.
J. of the Acad. Mark. Sci.
buy one brand rather than another. He found that such
utilitarian factors as the physical characteristics of the
brand, the packaging, price, and warrantees affect customers
choiceattributes that help them solve externally generated
consumption needs.
Gardner and Levy (1955) pointed out that brand academics
prior to the mid-1950s focused on examining such questions
as How many people use a certain brand?,What are main
reasons for their use?,andWhat are advantages and
disadvantages of using certain brands?They argued that
the focus was on finding out about strongly rationalized
reasons that are related to the brandsmost obvious benefits.
The focus was on making sure that potential customers
perceived the brands to be effective thereby helping
customers satisfy their very utilitarian needs: getting clothes
clean, grooming the hair, quenching thirst, preventing tooth
decay, tasting good etc. (Gardner and Levy 1955).
Like brand scholars in the previous era, scholars examining
abrands functional-benefit associations in this era viewed
brands as part of the market offering (i.e., value adding). As
such, brands constituted operand resources, which were pro-
duced by the firm to enhance the goodsperceived functional
benefits in the marketplace. The focus of brand value creation
was on the creation of a functional brand image. Brands
were targeted towards potential customers who remained
passive in the brand value creation process (i.e., operand
resources). While brand value was still seen as being
embedded in the physical goods (output orientation), brand
scholars started to acknowledge that customersperception
of a brands functional value affect their brand choice. This
insight is consistent with the Foundational Premise 7 (FP7)
of S-D logic, which states that the enterprise cannot deliver
value, but only offer value propositions (see Table 3).
Symbolic value-focus branding: brand as symbolic image
Scholarly efforts on branding in the mid-1950s suggest that
customers were becoming less often able to differentiate
between market offerings based on their functional benefit
associations alone because goods were increasingly becom-
ing similar in terms of their functionality. Consequently,
brand researchers argued that firms could gain a competitive
advantage by also promising to satisfy customerssymbolic
needs, that is, their desire for market offerings that fulfill
internally generated needs for self-enhancement, social
position, group membership, or ego-identification (Park et
al. 1986). Academics realized that customers not only looked
for functional benefits when buying a market offering, but
also for the possibility to associate themselves with a desired
group, role, or self-image, hence, for symbolic benefits.
Beginning around the mid-1950s, marketing academics
increasingly examined the relationship between symbolic
needs and customer choice, which is reflected in the works
on symbolic consumer behavior(Martineau 1958; Sirgy
1982; Solomon 1983) and the sociology of consumption
(Nicosia and Mayer 1976; Wallendorf and Reilly1983).
This interest in examining the relationships between
symbolic needs and consumption provides evidence of the
evolution of the branding literature during this era. In
particular, it was Gardner and Levys(1955, p. 34/35) call
for a greater awareness of the social and psychological
nature of products’—whether brands, media, companies,
institutional figures, services, industries, or ideas,thatdraw
brand academicsattention to examine a brandssymbolic
benefit associations, in addition to its functional benefit
associations. Gardner and Levy highlighted that the net
result is a public image, a character or personality that may
be more important for the over-all status (and sales) of the
brand than many technical facts about the product.
Whereas Gardner and Levy (1955) established the
relationship between the product and the brand, it was
Levy (1959, p. 124) who later redirected attention toward
the ways products turn peoples thoughts and feelings
toward symbolic implications.By doing so, he (p. 118)
acknowledged that people buy things not only for what
they can do, but also for what they mean.It had become
clear that people were buying more than the functional
benefits of a market offering; they were also buying its
symbolic benefits. In support of this argument, Goffman
(1959) suggested that the image of a brand had become
strong enough to stand on its own in signifying values. To
illustrate, Rolls Royce has become associated with luxury,
quality, and status, such that the term Rolls Royceby
itself may be used to describe other market offerings in
other product categories that are at the top of their class
(e.g., Godiva Chocolates may be described as the Rolls
Royce of chocolates; McEnally and de Chernatony 1999).
With this realization, brand scholars began to break away
from prior brand thinking, which viewed brand value as
embedded in the physical product. Viewing brands inde-
pendent from the actual market offering intimated that
brands now constituted something closer to operant
resources, which is consistent with the FP4 of S-D logic
(operant resources are the fundamental source of compet-
itive advantage). However, customers were still considered
operand resources. Therefore, brand value was still deter-
mined through value-in-exchange. Moreover, the acknowl-
edgment that customers choose brands based on their
perceptions of the brandssymbolic value again parallels
the FP7 of S-D logic (see Table 3). The focus of brand value
creation was on the creation of a symbolic brand image.
Relationship-focus brand era: 1990s 2000
Whereas scholars in the Value-Focus Brand Era increas-
ingly suggested that brands have similarities to operant
J. of the Acad. Mark. Sci.
resources, scholars in this brand era more specifically
examined the role of customers in the brand value creation
process. Therefore, around the 1990s, the general focus of
branding switched from the brand image as the primary
driver of brand value to the customer as a significant actor
in the brand value creation process. In particular, brand
scholars in this era acknowledged a more interactive and
relational co-creation process between the firm, its custom-
ers, and the brand. Furthermore, they highlighted the
importance of both internal and external customers as
brand value co-creators and thus as operant resources.
Finally, while brand scholars in the previous brand era
argued that brand value is determined through value-in-
exchange, they argued in this brand era that it is determined
through the customersperceived value-in-use.
In general, academics broke away from the Value-Focus
Brand Era by starting to investigate in greater detail the
customer-firm, customer-brand, and firm-brand relation-
ships. These three areas of study collectively shaped the
Relationship-Focus Brand Era. We will discuss them in
detail in the following (see Table 1and Fig. 1).
The customer-firm relationship focus: brand as knowledge
Brand scholars in the 1990s started to examine in greater
detail customer-firm relationships. The focus of interest was
on examining how customers internalize brand information
(Kapferer 1992; Keller 1993). The focus on customer-firm
relationships further contributed to an understanding that
brand value co-creation takes place in customersmind. In
contrast to the previous brand era, which argued that brand
value is embedded in the physical goods and thus
determined through value-in-exchange, the customer-firm
relationship focus highlighted that brand value is the
perception of a brands use-value to all customers. In
addition, instead of examining what types of value a brand
adds to a market offering and what types of associations
customers form about brands (e.g., functional versus
symbolic), the customer-firm relationship focus highlighted
in greater detail the process of how brand value is created.
In general, the emergence of many models of brand
equity during the 1990s highlights the increased importance
that brand, seen as an operant resource, plays in marketing
strategy. In addition, these models share certain basic
premises about brand equity, most notably that brand value
creation takes place in the minds of customers. For
example, Aaker (1996) defined brand equity as a set of
brand assets and liabilities (i.e., brand loyalty, brand
awareness, perceived quality, brand associations, and other
proprietary assets) linkedin customersmindsto a
brand, its name and symbol that add to or subtract from
the value provided by a market offering to a firm and/or to
that firms customers. Similarly, Kapferers(1992) six-facet
prism of brand identity highlights that the value of a brand to
customers isbased upon the extent to which a brand represents
the customersdesired social image and self-identity. Kapferer
(1992,2004) argued that brand identity is an important
concept for creating brand value and defined brand identity
as the unique set of brand associations that represent what
the brand stands for and promises to customers.
Moreover, Keller (1993) conceptualized brand equity
from the perspective of the individual customer and
provided a conceptual framework of what customers know
about brands and what such knowledge implies for a firms
branding strategies. According to Keller (p. 2), Customer-
based brand equity is defined as the differential effect of
brand knowledge on consumer response to the marketing of
the brand.Furthermore, brand knowledge consists of two
components, the first being brand awareness (brand recall
and recognition) and the second being brand image (set of
associations linked to the brand that customers hold in
memory). This conceptualization of customer-based brand
equity implies the joint efforts of customers and firms in co-
creating brand equity, and hence brand value.
In sum, the customer-firm relationship focus provides
evidence that the branding literature had evolved away
from viewing customers as exogenous to viewing them as
endogenousand thus as active brand value co-creatorsto
the brand value creation process. Instead of solely high-
lighting that customers form functional or symbolic value
associations about brands (i.e., associations that firms create
and communicate to customers), scholars investigating the
customer-firm relationship pointed out the complex mental
processes that customers go through when making their
brand selections (i.e., associations that customers co-create).
In addition to emphasizing the active role of the customers
in the brand value creation process, brand scholars examin-
ing the customer-firm relationship in this era acknowledged
that brand value is determined by customersvalue-in-use
perception, rather than through value-in-exchange. This shift
in thinking about brand value creation probably becomes
most apparent with the introduction of the customer equity
concept in the mid-1990s (Blattberg and Deighton 1996).
Rust et al. (2000) define customer equity as the total of the
discounted lifetime values summed over all of the firms
current and potential customers.
Specifically, Rust et al. (2000) suggested that customer
equity be superordinated to the more traditional, product-
focused brand equity term. According to their conceptual-
ization, customer equity is made up of three drivers: (1)
value equity: the customers objective assessment of the
brands utility, based on perceptions of what is given up for
what is received; (2) brand equity: the customers subjective
and intangible assessment of the brand, above and beyond its
objectively perceived value; and (3) retention equity (later
relationship equity; Rust et al. 2004): the customers
J. of the Acad. Mark. Sci.
tendency to stick with the brand, above and beyond his or
her objective and subjective assessments of the brand.
Brand scholars argued that the shift from product-centered
thinking to customer-centered thinking in the marketing
literature in general implies the need for a corresponding
shift from product-based strategy to customer-based strategy
(Kordupleski et al. 1993). In the branding context, a shift
from brand equity to customer equity reflected this thinking.
That is, the customer equity conceptualization constitutes a
more customer-centered approach to brand management. It
highlights that customer and brand equity are solely
determined by customers and hence through their perceived
value-in-use. Both Kapferers and Kellers brand conceptu-
alizations reflect this change in thinking.
As a result, brand scholars in the 1990s examined in
greater detail the customer-firm relationship. Brands were
seen as representing knowledge (Keller 1993). The focus of
brand value creation was on the customers. The focus on
the customer-firm relationship led to the insights that the
customers are co-creators of brand value and that brand value
is the customersperception of a brands value-in-use.
Viewing a firms customers as co-creators of brand value is
consistent with the FP6 of S-D logic, which states that the
customer is always a co-creator of value. Moreover, acknowl-
edging that brand value constitutes the customersperception
of a brands use value is consistent with the FP10 (which
states that value is always determined by the beneficiary), FP1
(which states that service is the fundamental basis of
exchange), and FP3 (which states that goods are a distribution
mechanism for service provision) of S-D logic (see Table 3).
The customer-brand relationship focus: brand
as a relationship partner
Whereas scholars in the 1990s focused on better under-
standing the customer-firm relationship, they focused on
examining the customer-brand relationship in the late 1990s
and early 2000s (Aaker 1997; Fournier 1998; Gobe 2001).
Specifically, scholars were interested in examining the role
of brands in customerslives and the relationship that
customers form with brands. This focus contributed to an
understanding that brand value co-creation is relational and
thus requires a process orientation, rather than an output
orientation, similar to S-D logic. Brands were seen as
relationship partners(Fournier 1998).
Specifically, brand researchers found that customers
form affect-laden relationships with brands that match their
personality, which provides a means to self-expression,
self-definition, and self-enhancement. Brand value, there-
fore, is co-created through affective relationships that
customers form with their brands and is determined through
direct (i.e., through usage or consumption) or indirect (i.e.,
through pure perception) contact with the brand.
For example, Aaker (1997) proposed a theoretical
framework of the brand personality construct. Her main
proposition is that brands, just like humans, have person-
ality characteristics and that people often imbue brands with
human personality traits. Moreover, Malhotra (1988; see
also Sirgy 1982) contends that customers showed greater
preference for a particular brand the greater the congruity
between the human characteristics that describe the cus-
tomers and those that describe the brand. As a result, the
relationship between brand and human personality may
drive consumer preference(Aaker 1997, p. 348) which in
turn drives brand value. Interestingly, Aakers framework
further suggests that customer perceptions of brand personality
can be formed and influenced by any direct (e.g., through
people associated with a brand; McCracken 1989)orindirect
(e.g., brand names, logos, advertising style, price, product
category associations; Aaker 1997; Batra et al. 1993) contact
that the customers may have with the brand (Aaker 1997;
Plummer 1985). To co-create brand value, therefore, people do
not necessarily have to consumeor use the market offering.
Fourniers(1998) brand relationship framework consti-
tuted a natural extension of Aakers brand personality
notion. She proposed that brands serve as viable relation-
ship partners and that consumer-brand relationships are
valid at the level of lived experience(p. 344). As such, she
highlighted that customer-brand relationships involve re-
ciprocal exchange between interdependent and active
relationship partners and that they evolve and change over
time and hence constitute process phenomena. Specifically,
she (p. 344) highlights: Comfort in thinking about the
brand not as a passive object of marketing transactions but
as an active, contributing member of the relationship dyad is
a matter more deserving of note.In total, Fourier explicitly
highlights that consumersexperience with brands are
often phenomenologically distinct from those assumed by
the managers(p. 367; c.f. FP10 of S-D logic). Given this,
she emphasized that brand value is co-created through
dyadic relationships between the firm and its customers.
Similar to the relationship-based brand conceptualiza-
tion, the concept of emotional branding suggests that
customers form strong bonds with brands that are mean-
ingful to them, captivate them, and compellingly enrich
their lives. As Gobe emphasized (2001, p. 56), consumers
today not only want to be romanced by the brands they
choose to bring into their lives, they absolutely want to
establish a multifaceted holistic relationship with that
brand, and this means they expect the brand to play a
positive, proactive role in their lives.Consequently,
academic research on emotional branding substantiates the
importance of dyadic relationships in the brand value
creation process.
As a result, academics in the late 1990s examined in
greater detail the customer-brand relationship. They argued
J. of the Acad. Mark. Sci.
that customers constitute active brand value co-creators and
that they form dyadic relationships with independent and
proactive brands. Therefore, customers and brands were
considered as operant resources, providing further support
for the FP6 and FP7 of S-D logic (see Table 3). In addition,
viewing not only brands (see the symbolic value-focus
branding research stream) but also customers as operant
resources is consistent with the FP4 of S-D logic (operant
resources are the fundamental source of competitive
advantage). Most importantly, the fact that customers form
dyadic relationships with brands that enrich their lives, that
is, that are perceived to have value-in-use, is consistent with
the FP10 of S-D logic (value is always determined by the
beneficiary) and parallels the FP8 of S-D logic, which states
that a service-centered view is inherently customer oriented
and relational (see Table 3).
The firm-brand relationship focus: brand as a promise
Finally, brand scholars in the 1990s and early 2000s also
examined the firm-brand relationship. They argued that not
only external customers but also a firms employees
(internal customers) co-create brand value. Consequently,
this focus has contributed to an understanding that external
and internal customers constitute operant resources.
To illustrate, King (1991, p. 6) argues that virtually
everything we buy is a combination of product and service
(Foxall 1985) and that, for a brand to be successful, the
service element is going to have to become more dominant
(Christopher 1985).consumerschoice of what they buy
will depend rather less on an evaluation of the functional
benefits to them of a product or service, rather more on their
assessment of the people in the company behind it, their skills,
attitudes, behaviourthe whole company culture, in fact.
Thus, King (1991) points out that employees are an important
component in the brand value co-creation process and that
theymayhelpfirmsachieveacompetitive advantage.
In a related manner, Gilly and Wolfinbargers(1998)
research suggests that internal customers (i.e., employees)
are involved in the brand value co-creation process. The
authors investigated the effect of advertising on internal
customers. Their findings suggest that the internal customers
and advertising decision makers differ from each other
regarding their values and views of advertising, an indication
that firms may underestimate the importance of the employ-
ee audience in their branding efforts.
Similarly, Berry (2000) with his service branding frame-
work argues that the firms employees, rather than the
product, play a greater role in determining customer value
because in labor-intensive service businesses, human per-
formance, rather than machine performance plays the most
critical role in building the brand(Berry 2000,p.130).Key
in Berrys(2000) service branding framework is the salient
role of customersexperience in the brand value creation
process. For example, he maintained that brand meaning for
customers who have actually experienced the service is the
experience. In contrast, brand meaning for customers who
have not directly experienced the service is likely to derive
from a companys external brand communications (e.g.,
word-of-mouth, word-of-keyboard, and publicity).
Therefore, internal customers (i.e., employees) shape and
represent the brand promises made to external customers. In
support of this view, de Chernatony (1999) suggested that
employees are crucial in the brand value creation process.
He argues that brands represent the vision and culture of the
firm and that this necessarily involves employees to shape
and represent a firms values. Thus, the focus of brand
value creation was on the (internal) customers.Brands
were seen as a promise.
As a result, brand scholars investigating the firm-brand
relationship highlighted that a firms employees (internal
customers) constitute important sources for creating brand
value. Through their direct and indirect dyadic interaction
with the firms customers, employees communicate a
certain brand image at any point of contact. By doing so,
employees provide a point of difference and a means to a
competitive advantage (de Chernatony 2001). Therefore,
the branding literature viewed internal customers as operant
resources and active brand value-co-creators (see Table 1
and Fig. 1). This change of thinking in the branding literature
extends the FP6 ofS-D logic, which states that the customer is
always a co-creator of value. In addition, it parallels the FP4 of
S-D logic, which states that operant resources are the
fundamental source of competitive advantage whereby
operant resources constitute not only brands and external
customers but also internal customers (see Table 3).
Taken together, the Relationship-Focus Brand Era
moved the customers into the center of the brand value
creation process and broke away from the thinking of
previous eras that highlighted that brand value is created by
firms and embedded in the physical goods. This shift in
brand logic can also be observed in the brand modeling
literature. Scholars originally measured brand value from a
pure goods-based perspective but soon realized the poten-
tial value to measure brand value from a customer-based
perspective (Keller and Lehmann 2006; Leone et al. 2006).
The goods-based perspective focuses on modeling brand
value in terms of cash flow, revenues, market share, stock
price, value in a sale, or similar measures (e.g., Lindenberg
and Ross 1981; Simon and Sullivan 1993;seealso
Ailawadi et al. 2003; Mahajan et al. 1994). In contrast,
the customer-based perspective focuses on modeling brand
value in terms of positive associations, awareness, loyalty,
perceived quality of the brand, the differential effect of
brand knowledge to the marketing of the firm, or the price
premium that customers are willing to pay for the brand (e.g.,
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Agrawal and Rao 1996; Ambler and Barwise 1998; Leone
et al. 2006;Srinivasanetal.2005). It is this latter
perspective that acknowledges that customers constitute
important brand value co-creators and, therefore, must be
taken into consideration when empirically measuring a
brands value (Leone et al. 2006; Srinivasan et al. 2005).
Stakeholder-focus brand era: 2000 and Forward
Brand scholars in the early 2000s started to examine the
collective and dynamic processes that underlie brand
consumption within society. Specifically, since the early
2000s they began to adopt a stakeholder perspective to
branding, which denotes that (1) brand value is co-created
within stakeholder-based ecosystems, (2) stakeholders form
network, rather than only dyadic, relationships with brands,
and (3) brand value is dynamically constructed through
social interactions among different stakeholders (see Table 1
and Fig. 1). Accordingly, a brand is viewed as a continuous
social process (e.g., Muniz et al. 2001) whereby brand
value is being co-created through stakeholder-based nego-
tiations (e.g., Brodie 2009; Brodie et al. 2009). Thus, the
focus of brand value creation is on the stakeholders. In
support of this view, Ballantyne and Aitken (2007) argued
that any brand is dynamically constructed through social
interactions and thus its value is located in the minds of its
customers and the wider group of opinion makers and
stakeholders. Table 2depicts the main differences between
the Relationship-Focus Brand Era and the Stakeholder-
Focus Brand Era with regard to the relationship between the
firm, brand, and customers.
During this era, the shift in thinking about the nature of
the brand value co-creation process was driven by the brand
community literature. To illustrate, Muniz et al. (2001,p.412)
defined brand community as a specialized, non-
geographically bound community, based on a structured set
of social relationships among admirers of a brand.Thus, a
brand community consists of a specific set of customers who
may or may not own the brand, but who are part of a
collective social unit centered on the brand and who adhere
to the markers of community: consciousness of kind
(intrinsic, felt connection among members), presence of
shared rituals and traditions, and sense of moral responsibil-
ity (see Muniz et al. 2001, p. 413). The phenomenon of
brand communities has recently attracted the attention of
numerous marketing scholars who have examined or referred
to such brand communities as the HOG (Harley-Davidson)
rally (McAlexander, Schouten et al. 2007), Car Club
Table 2 Relationship-focus brand era versus stakeholder-focus brand era
Relationship-Focus Brand Era
(1990s-2000)
Stakeholder-Focus Brand Era
(2000 and Forward)
Orientatio n Pro cess Orie nt at ion
Pro cess O rient atio n
Contribut ion Dyadic relationships with internal
and external customers
Network relationships with all
stakeholders
Social relationships among
customers (and other stakeholders)
Evolving Brand
Logic
External and Internal customers are
operant resources
All Stakeholders are operant
resources
Visual Depiction
Brand
= indivi dual customer
= employee
= differ ent stakehol ders
= brand community
Customers
Brand
Firm Stakeholders
Firm
J. of the Acad. Mark. Sci.
(Algesheimer et al. 2005), Apple Cult (Armstrong and Kotler
2006), Star Wars fans (Brown et al. 2003), Suns Java center
community (Williams and Cothrel 2000), Jeep fans (Schouten
etbal. 2007), and Apple Newton fans (Muniz et al. 2005).
Research on brand communities demonstrates that brand
value is co-created by community-based negotiations and
symbolic interpretations of brand-related information, as
well as personal narratives based on personal or impersonal
experiences with the brands (Muniz et al. 2001). Within a
brand community, members directly or indirectly share
consumption experiences and enhanced mutual apprecia-
tion for the product and the brand (McAlexander et al.
2002). These highly loyal brand communities become the
strongest advocates, believers, or even diehardsof the
brand (Gangemi 2006, p. 13). However, brand community
members do not need to own the market offering to admire
a brand and help co-create a brands value. Brand owners
and non-owners may admire a brand and interact with each
other in the form of brand communities. Thus, it is the
dynamic interaction of the customers within the boundaries
of the brand community that co-create brand value in these
brand communities. What the customers have in common is
that they admire the respective brand and perceive a brands
value on the basis of their perception of that brands use
value. Again, however, it is important to note that the
customers in the brand community framework are limited
to brand admirers (owners and non-owners) who are part of
a social unit and who adhere to the markers of community.
Whereas brand community researchers provided evi-
dence that brand value is co-created through highly
interactive and dynamic social processes between the firm
and the members of a brand community, brand academics
in the mid-2000s also began arguing that there are other,
non-customer and non-brand-community forces that dy-
namically interact with each other and create brand value.
For example, Jones (2005, p. 10) with his stakeholder
framework of brand equity emphasized the importance of
relationships between the firm and its various stakeholders
and the fact that brand value is not just created through a
dyadic relationship between the firm and its customers but
that it is a multifarious construct that is affected by, or the
sum of, a gamut of relationships.Thus, the stakeholder
framework emphasizes that process rather than output
orientation is important and that all stakeholders contribute
to a brands value, whether or not these stakeholders are part
of a social unit and adhere to the markers of community.
Similarly, Ind and Bjerke (2007) proposed the participa-
tory market orientation framework, which highlights that
brand value is created by involving employees, customers,
and other stakeholders in the development of a brand.
Creating brand value from the perspective of the participa-
tory market orientation framework is akin to a bazaar
approach to branding, which allows all stakeholders to take
a peek behind the scenes and have a say when decisions are
madeSmart brands will welcome the [stakeholders] role
as a natural partner in a collective process of product and
brand development(Ind and Bjerke (2007, p. 140).
Moreover, Gregory (2007) proposed a process describ-
ing the contribution that stakeholders can make based on
the concept of a negotiated brand. The author pointed out
that firms operate within a dynamic environment in which
stakeholders are both diverse and dynamic. The entire
network of a firm is part of the stakeholders. Halal (2000)
with his notion of corporate community encouraged firms
to recognize that stakeholders constitute partners who can
collaborate with them in problem-solving. Gregorys(2007)
notion of negotiated brand predicates a negotiated brand
based on a firm working with its various stakeholders
(internal and external), and being responsive to their input.
Through a process of dialogue and negotiation, brand value
and meaning develop over time.
As a result, this era has contributed to an understanding
that brand value is not only co-created through isolated,
dyadic relationships between firms and individual custom-
ers. Rather, it is also co-created through network relation-
ships and social interactions among the ecosystem of all the
stakeholders (Iansiti and Levien 2004). The literature on
component branding, which acknowledges that firms
operate in networks and that such networks play important
roles in branding through components, supports this
reasoning. A firms network is part of the stakeholders.
Brand value is viewed as the brands perceived use-value
and determined, collectively, by all stakeholders. These
most recent theoretical developments in the branding
literature are consistent with S-D logics conceptualization
of service ecosystems. Most importantly, brand academics
in this era highlighted that all stakeholdersthrough their
negotiation, dialogue and collaborationcan be viewed as
resource integrators that collectively function as an inter-
dependent ecosystem to mutually create value, as perceived
phenomenologically (i.e., in context). These notions reflect
and parallel FP9 and FP10 of S-D logic, which state that
value is always uniquely and phenomenologically deter-
mined by the beneficiary and that all economic and social
actors are resource integrators, respectively.
In sum, the preceding review of the branding literature of
the past several decades suggests that the branding literature
has evolved away from a brand logic that viewed brands as
identifiers and embedded in goods and brand value as
determined through value-in-exchange to a new brand logic
that views brands as dynamic and social processes and
brand value as a brands perceived value-in-used deter-
mined by all stakeholders. Moreover, the preceding
discussions demonstrate that the new evolving brand logic
parallels and reflects the new evolving service-dominant
logic in marketing. Table 3summarizes the evolution of the
J. of the Acad. Mark. Sci.
Table 3 Evolution of the branding literature and supported foundational premises (FPs) of the S-D logic
Brand Era Evolution of Branding Literature Explanation Supported FPs of S-D Logic
1900s1930s: Individual
Goods-Focus Brand Era
Customers and brands constitute operand
resources. Brand value is embedded in the
physical good and created when goods are sold
(output orientation). Brand value is determined
through value-in-exchange.
The Individual Goods-Focus Brand Era takes a
Goods-Dominant Logic perspective to branding.
1930s1990s: Value-Focus
Brand Era
Functional Value-Focus
Branding
Brands constitute operandresources. Brand value
is determined through value-in-exchange.
Brands add functional value to any market
offering when exchanged in the marketplace.
FP7: The enterprise cannot deliver value,
but only offer value propositions.
Symbolic Value-Focus
Branding
Brands begin to be viewed as operantresources,
but brand value is still being viewed as
determined through value-in-exchange.
Brands stand on their own. FP4 (brands): Operant resources are the
fundamental source of competitive advantage.
1990s2000s: Relationship-Focus
Brand Era
Customer-Firm
Relationship Focus
Brand value is determined through customers
perceived value-in-use.
Customers constitute co-creators of brand value. FP1: Service is the fundamental basis of exchange.
Brand value is the perception of a brands use
value collectively determined by all customers.
FP3: Goods are a distribution mechanism for
service provision.
FP6: The customer is always a co-creator of value.
FP10: Value is always uniquely and phenomenologically
determined by the beneficiary.
Customer-Brand
Relationships Focus
Brand value creation is relational
(process orientation).
Brand value is co-created through affective dyadic
relationships that customers form with their brands.
FP4 (external customers): See above.
FP8: A service-centered view is inherently customer
oriented and relational.
Firm-Brand Relationship
Focus
External and internal (employees) customers
constitute operantresources.
Internal customers provide a point of difference.
Through their direct and indirect interaction with
the external customers, they constitute co-creators
of brand value.
FP4 (internal customers): See above.
2005s and Forward:
Stakeholder-Focus
Brand Era
All stakeholders constitute operantresources. All stakeholders form network relationships with
brands and interact socially with other stakeholders.
All stakeholders co-create brand value.
FP9: All economic and social actors are
resource integrators.
FP = Foundational Premise; FPs are listed only in the brand era in which they were first supported and are inclusive in all proceeding brand eras.
J. of the Acad. Mark. Sci.
branding literature and the foundational premises (FPs) of
S-D logic that parallel the individual brand eras. The FPs
are listed only in the brand era in which they were first
supported and are inclusive in all proceeding brand eras.
Discussion and research directions
The present research traces the evolution of the branding
literature. We demonstrated that brand scholars have shifted
their focus over the past several decades from viewing a
brand as an identifier to viewing it as a dynamic and social
process. Thus, the branding literature shifted from an output
orientation (brand value is embedded in the physical goods
and determined through value-in-exchange) to a process
orientation (brand value is co-created with all stakeholders
and determined through all stakeholderscollectively
perceived value [in the context of their own lives]).
Furthermore, it shifted from viewing internal and external
customers as exogenous to the brand value creation process
to viewing them as endogenous. Finally, the branding
literature shifted from viewing brands as operand resources
and directly connected to the market offering to viewing
brands as operant resources that exist independently from
the market offering. This shift in the branding literature
seems to mirror the shift that has taken place in the
marketing literature in generalthe shift toward a more
service-dominant (S-D) logic.
We believe that the contribution of this insight lies not
only in providing a perspective to understanding the
existing branding literature, but also in providing a vision
that guides future theoretical contributions to the branding
literature. For example, it points towards an integrated
branding framework that focuses on the concept of brand
value co-creationa brand value co-creation (BVCC)
model. Central to such a BVCC model is the idea that a
brand constitutes a collaborative, value co-creation activity
involving all stakeholders and the firm. That is, all
stakeholders and the firm can be viewed as resource-
integrators that collectively co-create a brandsvalue.
Because the brand value co-creation process involves the
constant interaction among brands, firms, and all stake-
holders, a BVCC model would support Websters(2000)
viewpoint that a brands value is created not only in end-
consumer relationships but also within a network of
marketing relationships.
Overall, such an integrated BVCC model has the
potential to bring together apparently disparate research
streams within the branding literature (e.g., customer-based
versus goods-based perspectives). By integrating the col-
lective knowledge of existing brand conceptualizations,
such a BVCC framework might constitute a starting point
of a more cohesive and consistent branding literature.
Research along the lines of the BVCC framework might
examine how the proposed model will look like for non-
branded items. Non-branded products may be viewed as
products that do not contain a brand name or that only have
descriptive titles instead of names. It seems likely for non-
branded items that consumers and firms co-create meaning
value. If so, then what is the difference between such brand
(for branded items) and meaning (for non-branded items)
value co-creation models and are both models consistent
with S-D logic?
In a similar vein, whereas we discussed the importance
of brand communities in the brand value creation process,
further research is necessary to investigate how non-brand-
focused communities help co-created brand value. For
example, Kates (2004, 2002) explores ways that meanings
and brands are co-created in the gay community. According
to Kates, a gay community constitutes a non-brand-
focused community(Kates 2004,p.455),thatis,a
community that is not necessarily based on a structured
set of social relationships built around admirers of a brand.
He finds that shared ways of interpreting meanings within
social interaction provide the connection between the
community and its legitimate brands. Therefore, it would
be useful to explore the impact of such non-brand-focused
communities on such brand and meaning value co-creation
models. Moreover, future research might investigate how
research streams outside of branding link to and further
strengthen such a transcending BVCC model. For example,
it would be interesting to investigate how the self-concept
literature (Belk 1988; Belk et a1. 1982), the Consumer
Culture Theory school of thought (Arnould and Thompson
2005), literature on symbolic interactionism (Ligas and
Cotte 1999; Solomon 1983; Venkatesh et al. 2006), the co-
creation and co-production literatures (Bendapudi and
Leone 2003; Prahalad and Ramaswamy 2000), and the
literature on conspicuous self-presentation (e.g. in personal
Web spaces when the body is absent; Schau and Gilly 2003)
contribute to the understanding of a BVCC framework.
In addition, future research may further examine the
brand value co-creation process. One line of inquiry might
involve applying the concept of brand value co-creation to
different kinds of brands. For example, even though
branding in the industrial market is not a new phenomenon,
the majority of branding research has focused on firms
serving consumer markets (Martinez and de Chernatony
2004; Bengtsson and Servais 2005). An alternative line of
inquiry may investigate the intermediarys perspective in
the brand value co-creation process; an inquiry which is in
line with Leone et al.s(2006) call for more research that
helps intermediaries gauge a brands value (e.g., the value
of the brand to retailers). Maybe what is needed is a
taxonomy that describes different types of brand value co-
creation processes pertaining to different kinds of brands.
J. of the Acad. Mark. Sci.
Moreover, the relationships among the players in the brand
value co-creation process (i.e., firms, including intermediar-
ies, brands, and all stakeholders) warrant further exploration.
Another promising area for future research is the
development of brand value measures that capture the
essence of the brand value co-creation notion (i.e., process
orientation). As mentioned, the existing measures of brand
value have evolved from a generally firm/goods-based
perspective to a more customer-based perspective (Keller
and Lehmann 2006; Leone et al. 2006). However, these
scholarly studies are mostly output-oriented. The fact that
some customer-based mathematical studies have taken into
consideration brand loyaltyas one component of an
overall brand value measure signifies that relationships, and
hence process orientation, have been acknowledged to be
important. Further research, however, is needed that adopts
a purely process-oriented approach to assessing brand
value. Further research might also explore ways to
operationalize and capture the long-term value of a brand.
Managerial implications
The question of how brand value is created is important to
brand managers. It is not surprising, therefore, that prior
research has attempted to address this question (e.g., Holt et
al. 2004; Keller 1993; Quelch 1999). We have demonstrat-
ed that it is becoming apparent that properly addressing this
question requires a new understanding of the brand value
creation process, one that takes into consideration the
collective insights of existing brand conceptualizations
and the evolution in the branding literature toward a new
brand logic.
Our analysis suggests that managers might consider
focusing on building and maintaining strong relationships
with their stakeholders, broadly defined. Specifically, firms
might benefit from collaborating with their customers and
managing their customer network relationships (see Lusch
et al. 2007). Recent successful branding practices (e.g., Fire
Fox, Jones Soda, WD-40, Crispin Porter + Bogusky) have
pointed to the important role of customers in promoting the
identity, image, and value of a brand. Therefore, managers
might want to try to encourage customers to voluntarily
become involved in the brand value co-creation process,
and hence create brand value from the bottom up rather
than from the top down. Rethinking a brand as being
actively created and used by customers will go a long way
from the traditional branding practices, which focus on
influence and persuasion.
Managers might want to start by acknowledging that
customers are active brand value co-creatorsand as such
capable of imaging and judgingrather than solely passive
recipients of brand information. Peoplesmental experi-
ences might stand in the way of branding strategies that
focus on manipulating and persuading, but might become
invaluable resources for managers who advocate branding
strategies that emphasize value co-creation. Recognizing
customers as active players in the brand value co-creation
process might also create a useful way to distinguish
collaboration from deception in brand policy.
Brand value is also indirectly co-created with customers
that do not become brand buyers. To illustrate, children can
dream about Disneyland, sports fans can follow teams but
never purchase a ticket or piece of athletic apparel related to
their favorite team, or a college graduate can dream of an
Aston Martin. This observation suggests that managers
might want to expand their view and also develop and
maintain strong relationships with their firmsextended
customer base, beyond their actual customer base. This
implies that branding cannot be simply viewed as mana-
gerial efforts or dyadic relationships between customers and
firms. Instead, a better view of branding might be to view it
as a cultural phenomenon that is driven by the incongruities
and synergies among managers, employees, customers, and
other stakeholders. Any branding strategy that is isolated
from any stakeholder might be up against the influence of
social and cultural forces. Branding practices might be
better situated to reflect and influence the cultural and
ideological movement of the entire society, if managers
adopted a broader and more societal view of brand and
branding.
This research also suggests that managers might want to
be aware of the challenges involved in measuring brand
value. For example, it seems unlikely that one single
measure adequately reflects the value of a brand. Recent
branding research has pinpointed the pitfalls of applying
only one perspective to gauge brand value (Leone et al.
2006). In particular, traditional firm/goods-based approaches
(e.g., revenue premium; Ailawadi et al. 2003) do not provide
insights into customer-based sources of brand value.
Similarly, the more recent customer-based approaches to
measuring brand value do not sufficiently account for the
role of the brand communities, stakeholders, and dynamic
and social interactions among the different actors in the
brand value co-creation process. Given this, brand managers
might want to use multiple sources to gauge the success or
failure of a brand, until a more complete measurement of
brand value exists. Moreover, given the process-orientation
of the brand value co-creation process, managers might want
to track the health of their brands periodically to diagnose
potential problems resulting from the different actors in the
brand value co-creation process and guide marketing
decisions.
Finally, this research suggests that managers might
benefit from implementing a company philosophy that
emphasizes co-creation. Firms are not best characterized as
J. of the Acad. Mark. Sci.
either services firms or goods firms, but rather as service
(singular) firms, some of which use goods in their service
delivery. Thus, managers and employees might want to
acknowledge that service can be provided directly or
through goods and that all stakeholders actively participate
in the brand value creation process. This re-orientation of
managerial thinking, however, will require a new, service-
dominant company philosophy, which will need to be
ingrained in all employees.
Acknowledgment The authors would like to thank the editor, guest
editor, and reviewers for their very constructive comments on earlier
versions of this manuscript.
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... Instead of seeing brands as mere labels on a product, consumers started to be guided by brands and their symbolism (Gardner & Levy, 1955), especially after the 1950s, with the increase in competition and the decrease in differentiation (Bastos & Levy, 2012). This branding dichotomy between functional and symbolic aspects lasted at least until the 1990s (Merz et al., 2009), with some scholars exploring functional, symbolic, and experiential concepts in business models (C. W. Park et al., 1986). ...
... They also have a dynamic nature (Brodie et al., 2017;da Silveira et al., 2013) and intense emotional content (Carroll & Ahuvia, 2006;Gobé, 2001Gobé, , 2007Kapferer, 2008;Swimberghe et al., 2014), being symbolic devices that project self-image (Elliott & Wattanasuwan, 1998;Keller, 2013;Swaminathan et al., 2007). Still, brands have relationships with consumers (Blackston, 1993(Blackston, , 2000Fournier, 1994Fournier, , 1998Fournier & Alvarez, 2012), being co-created with diverse stakeholders (Csaba & Bengtsson, 2006;Hatch & Schultz, 2010;Merz et al., 2009;Payne et al., 2009). Lastly, they have a market orientation, a resource orientation (Urde, 1999), and an internal management perspective (Burmann, Zeplin, et al., 2009;Burmann & Zeplin, 2005). ...
... Scholars studied the evolution of brands, identifying an initial phase when they were used as identifiers (Merz et al., 2009), with a narrow focus on logistics and distribution (Bastos & Levy, 2012). This initial understanding of branding was in line with what was first expected from the marketing area. ...
Thesis
Full-text available
This master’s thesis presents a new brand identity model for consumer goods called Brand Identity Canvas (BIC), with the objective of helping academics and practitioners build more relevant and stronger brands. Our work updates the current and most influential brand identity models theorised mainly in the 1990s, including components and discussing interactions not previously addressed by scholars. We adopted the Design Science Research methodology, which is adequate for building artefacts and theoretical frameworks. The framework development was based on a literature review and 11 in-depth interviews with practitioners (marketing managers and directors) and academics (marketing and branding professors). The new model has two parts: the first is managerial, with a description of the intrinsic characteristics of the brand and its influences; the second is expressive, with a mood board that explores the brand’s visual aspects. The BIC presents academics and practitioners with an updated framework for defining and developing a brand identity for consumer goods, with dimensions, components, and relations representing an advance on the existing models.
... In the co-creation ecosystems, value is created in a shared relationship among brands, customers and stakeholders (Payne et al. 2009). Merz, He and Vargo (2009) argued that the discussion on value co-creation has expanded to branding. Brand value co-creation can be viewed from the perspective of the provider or customer. ...
... The paradigm shift from G-D logic to S-D logic has allowed the value co-creation concept to evolve into the brand management field (Merz et al. 2009;Payne et al. 2009;Prahalad and Ramaswamy 2004;Ramaswamy and Ozcan, 2016;Vargo and Lusch, 2004). Traditionally, firms that provided goods or services solely managed the brand image and brand meanings over time; however, this firm-controlled brand management approach should move to be more collaborative with its stakeholders including customers as the one of focal partners and empower market agents (Biraghi and Gambetti, 2017). ...
... Tajvidi et al. (2018), stated "brand co-creation is co-created value through engagement in specific experiences and activities related to a brand". Merz and Vargo (2009), and Vargo and Lusch (2016), considered the stakeholder perspective view of brand value cocreation "as the process of creating perceived use of value for a brand through network relationships and social interactions among the ecosystem of all actors. It comprises multi-dimensional concepts encompassing engagement, value co-creation, and brand intentions". ...
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The purpose of this paper is to expand on existing co-creation knowledge by exploring brand value co-creation in health care from the patient's perspective. In addition, a conceptual framework is proposed that can be empirically validated. A systematic literature review, concept analysis and synthesis from previous study were conducted to develop a conceptual framework. Therefore, customer brand co-creation theory is adapted to develop patient brand value co-creation conceptual framework. There are two key constructs as antecedents to brand value co-creation in the context of the patient-provider relationship, namely patient empowerment, and relationship quality. Two propositions and a patient brand value co-creation concept framework were constructed and proposed from patient empowerment and relationship quality to enrich research in the brand value co-creation domain. Health care service providers could benefit from this research since the proposed conceptual framework indicated the importance of supporting or empowering patients as well as maintaining good relationship quality to facilitate brand value co-creation. This study contributes to the brand value co-creation literature, especially in health care services.
... It may well be time to take another look at value, services and innovation. Among those in the vanguard of value driven services research are authors such as Chesbrough, Lucsh, Maglio, Spohrer and Vargo (Spohrer and Maglio, 2005;Chesbrough and Spohrer, 2006;Vargo, 2008;Vargo and Lusch, 2008;Michel et al, 2008;Merz et al. 2009). As early as 2004, researchers were revisiting Smith with a view to better understand the nature of value within a service-dominant context. ...
... It could be argued that Islamic banking offers such a partnership approach and can deliver 'co-created value', based on sustainable partnerships and meaningful service exchanges. This basic approach of relationship building and business partnership lies at the core of what many researchers would see as being an essential ingredient of business success (Leavy, 2004;Prahalad and Ramaswamy, 2004;Vargo and Lusch, 2004;Rust, 2006;Gentile et al. 2007;Lusch et al. 2007;Paton and McLaughlin, 2008;Vargo, 2008;Michel et al. 2008;Merz et al. 2009). For example, Leavy (2004: p. 10) argues that "value will be interactively co-created by companies and consumers, rather than merely exchanged between them. ...
... Initial research suggests that SharÊÑah-inspired Islamic banking may be regarded as an exponent of 'service dominant logic and cocreated value' (Vargo, 2008; Michel et al. 2008;Merz et al. 2009). If so, SharÊÑah business models could assist businesses facing the challenges of a credit downturn and socio-economic uncertainty. ...
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This paper argues that Shari'ah-compliant Islamic banking is essentially a value co-creation business model that illustrates attributes associated with the emerging service-dominant logic paradigm. The underpinning Shari'ah philosophy of minimising ‘usage’ of one party by another results in the sharing of profit, losses, risk and the promotion of interest-free principles. Islamic banks that follow Shar ah traditions endeavour to co-create value with their business and corporate customers in a manner that would resonate with the proponents of service-dominant logic. The authors argue that Shari'ah-compliant business models may be more appropriate for today’s volatile and socio-economic climate, evidencing their potential via business case examples. Shari'ah-compliant Islamic financing, such as sukuk (Islamic bonds), istisna' (construction finance), murabahah (commodity trade finance), mudarabah (finance trusteeship), musharakah (joint venture) and ijarah (Islamic leasing), is generally based on a business relationship and partnership approach. Such approaches are now gaining popularity and offer those engaged in service exchange the opportunity to co-create value or at least mutual benefit.
... In contrast, the scope of platform ecosystems may potentially neglect other actors participating in an ecosystem. It is because platform ecosystems centre on digital aspects, network partners, and business actors, while service ecosystems compromise not only firms and customers but also their social communities and other stakeholders (Merz et al., 2009;Fehrer, Woratschek, and Brodie, 2018). As a result, this study adopted the construct of service ecosystems rather than that of platform ecosystems. ...
... By communicating a clearly defined brand image, actors are able to maintain competitiveness (which refers to brand value creation) by enabling customers to differentiate them from their competitors. Actors considered the entry of first mover as an uncertainty since such a change in the market can disrupt customers' perceptions, which actors intentionally create to increase their competitive advantage and change the way customers perceive them (Merz, He, and Vargo, 2009). Merz, He, and Vargo (2009) identified that brands serve as operant resources for actors to achieve competitive advantage. ...
... Actors considered the entry of first mover as an uncertainty since such a change in the market can disrupt customers' perceptions, which actors intentionally create to increase their competitive advantage and change the way customers perceive them (Merz, He, and Vargo, 2009). Merz, He, and Vargo (2009) identified that brands serve as operant resources for actors to achieve competitive advantage. ...
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... In such ecosystems, value is cocreated through multiple interacting stakeholders (e.g., suppliers, service providers, commercial partners, technology, society, business associations, customers, etc.), thus extending beyond traditional dyadic (i.e., provider/customerbased) interactive processes Lusch, 2004, 2008). Stakeholders are, therefore, resource integrators that collectively cocreate ecosystem-based shared value (Merz, He, and Vargo, 2009). Each stakeholder plays a key role: As (s)he creates and receives value, this value is "uniquely experienced and determined by the beneficiary" (Greer, Lusch, & Vargo, 2016, p. 3). ...
... Section 3 presents the adopted case study method in this study, which draws on the Universal Expositions 2015, hosted in Milan, Italy, and 2020, hosted in Dubai, United Arab Emirates. These mega-events were selected given their complex social and economic interactions that characterize multi-stakeholder service ecosystems more generally (Merz et al., 2009;Vargo and Lusch, 2011). In these systems, stakeholders' engagement occurs through self-adjusting service-exchange relationships. ...
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... The idea of brand co-creation originates from service-dominant logic [49] and considers that the value of brands and brands themselves are co-created by firms and their consumers [50][51][52][53]. While this model of brand creation can be widely applied and could be said to be a part of the formation of a compound brand, there are nevertheless unique characteristics of compound brands which create clear lines of delineation. ...
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