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How Brand Awareness Relates to Market Outcome,
Brand Equity, and the Marketing Mix
Rong Huang, Shanghai University of Finance and Economics
Emine Sarigöllü, McGill University
Submission: June 2009
Revision: October 201o
Acceptance: February 2011
This research was supported by funds from McGill Institute of Marketing and by the
211 Project (Phase III) of Shanghai University of Finance and Economics. Send
correspondence to Rong Huang, Marketing, School of International Business
Administration, Shanghai University of Finance and Economics, 777 Guoding Road,
Shanghai, China, 200433. Tel: 86-21-6590-4699, Fax 86-21-6511-2354 (email:
email.huangrong@gmail.com). Emine Sarigöllü, Faculty of Management, McGill
University, 1001 Sherbrooke St. West, Montreal, Quebec, Canada, H3A 1G5. Tel: (514)
398-4662, Fax: (514) 398-3876 (e-mail: emine.sarigollu@mcgill.ca). The authors thank
Demetrios Vakratsas (Faculty of Management, McGill University), Georges Zaccour
(HEC Montréal), George Alex Whitmore (Faculty of Management, McGill University)
and Yoshio Takane (Department of Psychology, McGill University) for their insightful
Abstract
Combining survey data with real-market data, this research investigates brand
awareness from three perspectives. This study examines the relation between brand
awareness and market outcome and explores the relation between brand awareness and
brand equity. The study also investigates the effects of marketing mix elements on
brand awareness. Results reveal consumers’ brand usage experiences contribute to
brand awareness, implying experience precedes awareness in some contexts. The results
also confirm positive association between brand awareness and brand equity. Lastly, the
current work demonstrates the importance of distribution and price promotion in building
brand awareness in a consumer-packaged goods category.
Keywords: brand awareness, market outcome, brand equity, marketing mix elements
INTRODUCTION
Brand awareness refers to whether consumers can recall or recognize a brand, or
simply whether or not consumers know about a brand (Keller, 2008). Brand awareness
precedes building brand equity. The brand name provides the memory nodes in
consumers’ minds (Aaker, 1991). Consumers may link the related brand knowledge to the
brand name, which finally constitutes brand equity (Aaker, 1991; Keller, 1993). Hence,
brand awareness provides a kind of learning advantage for the brand (Keller, 2008).
Brand awareness affects consumer decision-making, especially for low-involvement
packaged goods. Brands that consumers know are more likely to be included in the
consumers’ consideration set (Hoyer & Brown, 1990; MacDonald & Sharp, 2000).
Consumers may use brand awareness as a purchase decision heuristic (Hoyer & Brown,
1990; MacDonald & Sharp, 2000). Therefore, brand awareness increases brand market
performance.
Surprisingly, research on brand awareness is scarce. For instance, prior research
explores brand awareness’s affect on decision-making only through lab experiments at the
individual consumer level (MacDonald & Sharp, 2000). Research linking brand
awareness to actual market outcome primarily appears in service industry research (Kim
& Kim, 2005; Kim, Kim & An, 2003) with the exception of one study in
consumer-packaged goods (Srinivasan, Vanhuele, & Pauwels, 2008). Furthermore,
causality’s direction between brand awareness and brand market outcome remains
unexplored. Finally, the literature only partially investigates the question of how to build
and enhance brand awareness. Past research typically focuses on the impact of either
advertising or distribution intensity on brand awareness; yet only two studies consider the
impact of price promotion on brand awareness but with inconsistent results (Srinivasan et
al., 2008; Yoo, Donthu, & Lee, 2000).
The current study contributes to research on brand awareness in three ways. First, this
study provides a comprehensive study of the relationship between brand awareness and
market outcome, thereby addressing marketing’s accountability issues (Webster, Malter,
& Ganesan, 2003). Specifically, the study relates brand awareness to various real market
outcomes, including sales and brand market share, using both correlational and causal
analysis. Second, this research links brand awareness to overall brand equity, considering
both customer mindset and product market outcome measures of brand equity (Keller &
Lehmann, 2003). Although previous research demonstrates a positive association between
brand awareness and customer mindset brand equity (Kim & Kum, 2004; Yoo & Donthu,
2001; Yoo et al., 2000), this result was confirmed on information from surveys only. In
contrast, the present study utilizes real market time-series data. In addition, this research
also explores the association between brand awareness and brand equity market outcome
measures, including revenue premium, share premium, and price premium. Finally, the
present study investigates the association between marketing mix elements and brand
awareness. Specifically, this study examines price promotion’s impact on brand
awareness, shedding light on inconsistent results in extant literature.
The next section reviews literature on brand awareness’s relationship with market
outcome, brand equity, and marketing mix elements. The latter sections propose research
hypotheses, methodology and results, as well as a discussion of implications and future
research directions.
LITERATURE REVIEW
Association between Brand Awareness and Market Outcome
Brand awareness significantly impacts consumer decision-making; consumers
generally use brand awareness as a decision heuristic. A known brand has a much better
chance of being chosen by consumers over an unknown brand (Hoyer & Brown, 1990).
This well-known brand likely performs better in the marketplace compared to a lesser
known brand. Table 1 provides a literature overview on the relationship between brand
awareness and market outcome. In general, the literature indicates a positive relationship
between the two. For instance, Kim et al. (2003) find brand awareness positively
associates with sales in the hotel industry. Silverman, Sprott and Pascal (1999) find a
weak correlation between brand awareness and market outcome (as measured by sales or
brand valuations by Financial World). This weak correlation could be due to sampling
error. The respondents (students) in the study, who are familiar with well-known
corporate brands such as, GE or Cisco, are not necessarily customers of those brands.
High corporate brand awareness does not necessarily translate directly into sales.
______________________________________________________________________
Table 1 here
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The literature linking brand awareness to market outcome is limited and lacks
external generalizability. Most studies are examining the service industry (Kim & Kim,
2005; Kim et al., 2003; Kim & Kim, 2004) and principally rely on perceptual data from
surveys or experiments, with the exception of Srinivasan et al. (2008). Furthermore,
previous research typically measures brand market outcome in terms of sales. Only
Silverman et al. (1999) consider brand equity as market outcome.
Finally, the direction of causality between brand awareness and brand market
outcome has not been explicitly explored. Theoretically, previous studies treat brand
awareness as an antecedent to brand market outcome (Keller & Lehmann, 2003). For
product categories involving low financial risk and little time investment for purchase
(e.g., convenience goods), consumers may not necessarily go through the
“cognition—affection – action” procedure (Mowen & Minor, 2001). Other factors, such
as the shopping environment, product placement, and on-the-spot promotion, likely
influence the decision to purchase and, consequently, market outcome. Consumers’
purchase and subsequent usage experience may predict brand awareness better, rather
than the vice versa (Olshavsky & Granbois, 1979). They do not even need brand
awareness prior to purchase. Previous empirical research does not investigate a causal
relationship between brand awareness and brand market outcome; instead, these studies
contend with only correlational association (e.g., Baldauf, Cravens, & Binder, 2003; Kim
& Kim, 2005; Kim, Kim & An, 2003; Silverman et al., 1999).
Baldauf‘s et al. (2003) study is one exception; they find brand awareness is an
antecedent to brand market outcome (measured as profitability and sales). However, they
do not explicitly test for the causality relationship between brand awareness and market
outcome. Their study does not tell whether brand awareness predicts brand market
outcome or brand market outcome improves brand awareness. The causality relationship
between brand awareness and brand performance requires empirical confirmation, and the
current research takes on this challenge.
The following hypothesis advances the extant theory (Keller & Lehmann, 2003). H1:
Brand awareness predicts product-market performance.
In short, this research undertakes a comprehensive exploration of the relationship
between brand awareness and various brand market outcomes, including sales, market
share and overall brand equity.
Association between Brand Awareness and Overall Brand Equity
Most brand equity measures are classifiable into three subsets: customer mindset
measures, brand performance measures, and shareholder value measures (Keller &
Lehman, 2003). Customer mindset measures gauge customers’ general attitude directly
toward a brand and include two important components: brand awareness and brand
association. Brand association refers to any brand knowledge relating to the brand in the
customer’s mind. This knowledge represents overall brand equity in the customer’s mind.
The following discussion uses customer mindset brand equity as synonymous with brand
association. The second group of brand equity measures, called product-market
performance measures, assesses the brand market performance resulting from customer
mindset measures and includes dollar sales, volume sales, revenue premium, price
premium, volume premium, and share premium. Finally, firm level performance measures
assess the value created by the brand to the overall corporation.
The current study examines the association of brand awareness with both customer
mindset and product market outcome measures. Previous research finds a positive
association between brand awareness and overall customer mindset brand equity (Kim &
Kum, 2004; Yoo & Donthu, 2001; Yoo et al., 2000), with the exception of Gil, Andres,
and Salinas (Gil, Andres, & Salinas, 2007)’s work. These past studies generally treat
brand awareness as a component of overall brand equity and suffer a few shortcomings.
For example, some studies consider brand awareness and brand associations as a joint
dimension, causing difficulty in untangling the effect of brand awareness from brand
association (e.g., Gil et al., 2007; Yoo et al., 2000).
Past studies use only survey research to explore the relationship between brand
awareness and mindset brand equity, calling their external generalizability into question.
In contrast, the present study contains time-series dataset including market outcome
metrics, brand equity, and marketing mix information for 11 brands of
consumer-packaged goods over a period of three years. In addition to mindset measures of
brand equity, the current research also considers market outcome measures, such as
revenue premium, share premium, and price premium as well as exploring their
association with brand awareness.
Marketing Mix Elements and Brand Awareness
Past research does not investigate fully the question of how to build and enhance
brand awareness. While most research focuses on advertising’s impact, or distribution’s
intensity on brand awareness, only two studies consider price promotion; but they produce
inconsistent findings (see below). The current study explores how to build and enhance
brand awareness through marketing mix elements.
Advertising Advertising creates and increases brand awareness by exposing brands
to customers (Aaker, 1991; Batra, Lehmann, Burke, & Pae, 1995; Keller, 1993; Rossiter
& Percy, 1987; Yoo et al., 2000). Advertising also increases the brand’s likelihood of
being included in consumers’ consideration set, thereby enhancing market performance of
the brand (Krishnan & Chakravarti, 1993). Brand association (brand awareness) positively
relates to advertising expenditure invested in the brand (Yoo et al., 2000). In summary,
evidence indicates a positive relationship between advertising expenditure and brand
awareness.
Most evidence is based on consumer perceptions obtained either through surveys or
laboratory experiments. External generalizability is questionable. The present study
addresses this deficiency by validating previous research findings on real market data. H2:
Advertising affects brand awareness positively.
Distribution Anything causing exposure of a brand to consumers contributes to the
establishment of brand awareness (Keller, 2008). Repeat brand exposure in stores
improves consumers’ ability to recognize and recall the brand. In addition, since stores
organize products by categories, consumers gain exposure to brands by category. The
store environment naturally facilitates the linkage between brand and the related product
category. Therefore, distribution helps to establish brand and product category linkages.
Distribution (shelf visibility) alone generates brand awareness and trial for frequently
purchased products (Smith & Park, 1992). Trials provide consumers with personal
experience of products; and in turn, consumers’ usage experience further improves brand
awareness.
Previous studies confirm a positive association between brand awareness and
distribution intensity (Yoo et al. 2000; Srivinasan et al. 2008). H3: Distribution affects
brand awareness positively.
Price Promotion Price promotions induce brand switchers and create product trials.
Such product experiences enhance brand awareness (Keller, 2008). Only a few
researchers empirically explore the association between brand awareness and price
promotions and their findings are inconsistent. Yoo et al. (2000) find a negative
relationship between price promotion and brand awareness. However, Srinivasan et al.
(2008) identify a positive relationship between brand awareness and price promotion, as
well as advertising and distribution. Contradictory findings may be due to the use of
different brand awareness measures and research contexts in two studies. While Yoo et al.
(2000) jointly measure brand awareness and brand association for durable goods,
Srinivansan et al. (2008) assess pure brand awareness (e.g., whether customers know the
brand) for convenience goods.
The current study measures brand awareness by asking whether customers know
the brand and tests the following hypothesis. H4: Price promotion affects brand awareness
positively.
Price Although pior literature finds a positive association between price level and
perceived quality (Tellis & Wernerfelt, 1987; Yoo et al., 2000), the relevant literatue does
not explore the relationship between price and brand awareness. Consumers may use high
price as a quality signal to achieve decision efficiency; on the other hand, a low-priced
product give consumers more value in terms of the price. Hence, “consumers might be
equally aware of both the high-priced product and the low-priced product” (Yoo et al.
2000, p.199). No evidence of a directional relationship exists between price and brand
awareness. This research provides an initial attempt in exploring the relationship between
price and brand awareness.
METHOD
Data
This study’s data are gathered from various sources. A consumer-packaged goods
company provided the brand awareness and brand equity data. This company tracked 11
important brands in a consumer-packaged goods category for household use in the United
States. The sales revenue of the 11 brands constitutes around 90 percent of the total
category sales in the U.S. during the data collection period, from January 2004 to
December 2006. This company conducted a weekly equity scan survey with 75 samples
per week and summarized monthly. Respondents were recruited from a panel from one of
the company’s lead suppliers. The company calculated and tracked the overall brand
equity every half year from 2004 to 2006.
Information on the four marketing mix elements (advertising, price, price
promotion, and distribution intensity) for the same 11 brands comes from Information
Resources, Inc. (IRI) and TNS media intelligence for the same period (2004-2006). To
match with the customer mindset brand equity measures, the marketing mix data also was
measured every half year.
Operationalization of Variables
Brand Awareness The present work measures brand awareness by asking
respondents: “Have you ever heard of or seen Brand X?” for each of the eleven brands.
The percentage of respondents who checked “yes” for a brand provides the overall
measure of brand awareness.
Customer Mindset Brand Equity Keller’s (2001) findings constitute the theoretical
background of the customer mindset brand equity measures. The current research
considers four types of brand equity measures; namely, brand performance, brand image,
brand judgment, and brand feelings. Brand performance, image, and judgment are each
measured by 9 items. Brand feelings are measured by 10 items. Each item describes how
a customer might feel/think about a brand. For instance, the brand image items include,
“allows me to present my family at their very best”, “helps me to always make a good
impression with my appearance”; “is currently a leading brand”; “a brand I grew up with”;
“a family favorite for years”; “a brand my mother used”; “has been a leading brand in this
category for years”; “is dependable and trustworthy”; and “will be a leading brand in the
future”. The brand judgment items include: “makes life easier”; “makes the usage
experience more enjoyable than I would expect”; “helps me feel in control in the process”;
and “makes me feel confident”. In summary, brand image and performance constructs
inquire about brand meaning and brand feelings; and brand judgment constructs assess
response based on brand meaning (Keller, 2001). Cronbach's alpha statistic applied to
these proportions (averages) shows excellent internal consistency, exceeding 0.98 for each
construct.
The questionnaire lists all the items and the 11 brands, and asks respondents to
check the items that describe how they feel or think about a certain brand. Respondents
only consider the brands they know. Hence, the percentage of respondents who check
“yes”, out of all the respondents who know the brand, constitutes the measure of the
brand’s performance, image, judgment, and feelings. The average ratings of all statements
indicate the overall brand equity. In general, the four constructs identify the major brand
associations in customers’ minds.
Market Outcome Measures Brand sales and market share gauge the market
outcome.
Brand Market Performance and Brand Equity This research considers multiple
measures of brand market performance; namely, revenue premium (Ailawadi, Lehmann,
& Neslin, 2003), price premium (Bello & Holbrook, 1995; Holbrook, 1992), volume
premium (Ailawadi et al., 2003), and share premium (Ailawadi et al., 2003). Table 2
provides descriptions of these variables and their respective data sources.
________________________________________________________________
Table 2 here
_____________________________________________________________
The present study employs revenue premium (Ailawadi et al., 2003) as the principal
performance measure. Revenue premium offers a more complete view than other brand
market performance measures, such as market share or price premium. A brand may
obtain a big market share due to a deep price cut. Brand price premium may represent
only a small market segment; however, revenue premium considers both the brand’s price
and sales. Revenue premium considers competitors’ performance which symbolizes the
brand’s strength in the marketplace relative to competitors. Ailawadi et al. (2003) confirm
this measure’s reliability and validity. Revenue premium is a convenient method for
computing brand equity since the necessary data readily are available. A potential
shortcoming of the revenue premium measure, the requirement of a private label as a
benchmark, is not a concern here because our dataset includes private labels.
Information on Private Label Since price premium, market share premium, and
volume premium are measured relative to the private label, this research provides basic
information on the private label (Table 3). While some stores might carry multi-levels of
private labels, all private labels in this product category are grouped together to calculate
the average price and distribution intensity. The sales value and sales volume are the total
value of all private labels in this product category.
________________________________________________________________________
Table 3 here
________________________________________________________________________
The average price of private label is around $0.47 per unit volume with a very small
variance versus the average net price of the branded products of $0.90. The private label’s
distribution intensity is high with an average ACV (all commodity volume) percentage
around 85 percent, which is higher than some branded products in the dataset. Since a
private label generally carries the retailer’s name, the distribution intensity reflects a
retailer’s tendency to promote the private label. The average market share of the private
label is around 2.5 percent which is higher than some national brands’ shares. Finally, as a
private label’s market position increased; the dollar market share grew 19 percent and
sales grew 24 percent from 2004 to 2006. By comparison during this period of time, the
entire category grew only about 5 percent in total market dollar sales.
Marketing Mix Elements This research adopts the standard operationalization of
marketing mix variables. Advertising is measured as brand’s advertising expenditure from
TNS media intelligence. Price, price promotion, and distribution data are obtained from
Information Resources, Inc. (IRI). Average regular price (e.g., the non-promotion price)
measures the price. Percentage of sales made on price promotion assesses price promotion.
Finally, the average percentage of ACV measures distribution intensity.
FINDINGS
Descriptive Statistics of Brand Awareness
Table 4 summarizes descriptive information on brand awareness. The average
brand awareness of the overall dataset is 76 percent, with a minimum value of 38 percent
and a maximum value of 96 percent. Brand I has the highest brand awareness at 96
percent, while Brand K has the lowest (42%). Interestingly, Brand D has the lowest
market share and sales, but the product has moderate brand awareness (67%). The
standard deviation of each brand is relatively small (a range of 0.5% to 2.6%), indicating
that brand awareness is rather stable, at least in the time interval covered by the data.
____________________________________________________________________
Table 4 here
____________________________________________________________________
Change in Brand Awareness over Time
Table 5 provides a closer look at changes in brand awareness over the three years
covered by the dataset. In general, very little change occurs in awareness of the 11 brands.
Only Brand K exhibits an 18 percent increase in awareness over time. This change may be
due to increased investment in promotions (see further). The median percentage change in
brand awareness is zero.
_______________________________________________________________________
Table 5 about here
_______________________________________________________________________
Correlation of Brand Awareness and Market Outcome
Overall, the results indicate a positive correlation between brand awareness and
brand market outcome (Table 6). Specifically, the correlation between brand awareness
and sales is 0.50 (p <.001), and between brand awareness and market share is also 0.50 (p
<.001). These findings confirm previous literature; brand awareness has a positive
relationship with the brand’s performance in the marketplace (e.g., Kim et al., 2003).
The present study also explores the correlation between brand awareness and brand
equity measured as both customer mindset and market outcome. The findings confirm a
positive association between brand awareness and overall brand equity; the correlation
between brand awareness and customer mindset is 0.56, and the correlation between
brand awareness and the revenue premium is 0.50.
The correlation of brand awareness with sales is lower than its correlation with
customer mindset. Similarly, brand awareness’s correlation with brand performance
equity measures, such as revenue premium, is also lower than its correlation with
customer mindset. These findings suggest brand awareness closely relates to customers’
overall attitude toward a brand. Since both brand awareness and customer mindset
measures assess customer mindset directly, the finding that brand awareness has higher
correlation with customer mindset equity as opposed to other market outcome measures is
reasonable.
Finally, the current work finds that price premium positively correlates to brand
awareness (r = 0.49, p <.001). Price premium measures brand equity. As proposed, a
high-equity brand is able to charge a higher price than competitors, ceteris paribus (Bello
& Holbrook, 1995; Holbrook, 1992). This finding confirms a positive relation between
brand awareness and overall market outcome of brand equity.
______________________________________________________________________
Table 6 here
_____________________________________________________________________
Brand Awareness as Antecedent of Market Outcome
The present study tests whether brand awareness is an antecedent of market
outcome. The brand awareness measure of the previous time periods forecasts current
revenue premium. And vice-versa, the revenue premium of the previous periods predicts
current brand awareness.
In regression, the first five time periods in the dataset are used to obtain the
parameter estimates, and then these parameter estimates predict the value in time 6.
Table 7 and Table 8 present the results. The model is significant and produces better fit
when brand awareness is regressed on the lagged revenue premium (estimated on the
previous five periods). That is, the lagged revenue premium is a better predictor of brand
awareness than vice-versa. This finding is inconsistent with literature that considers brand
awareness as the antecedent of product market outcome. This finding will be discussed
later.
________________________________________________________________________
Table 7 here
________________________________________________________________________
________________________________________________________________________
Table 8 here
________________________________________________________________________
This study further investigates the predictive relationship between brand awareness
and market outcome by cross-prediction. The revenue premiums of the last one, two and
three time periods predict current brand awareness. Similarly, brand awareness from the
last one, two and three time periods predict the current revenue premium. Then, the
MAPE (mean absolute percent error) compares prediction accuracy and provides a
unit-free scale of evaluation (Farnum & Stanton, 1989). Specifically, each absolute
forecasting error converts into a percentage error relative to the corresponding actual
value. The average magnitude of all resulting percentages is the final measure of the mean
absolute percent error (MAPE), as expressed in the following equation:
nY
e
MAPE
n
tt
t
1
(1)
Where,
t
e
is the forecast error in time period t;
t
Y
is the actual value in time period t; n is
the number of forecast observations in the estimation period.
Since this research considers two dependent variables (i.e., customer mindset and
revenue premium), the standardized deviation of the two measurements, respectively,
constitute
t
Y
.
________________________________________________________________________
Table 9 about here
________________________________________________________________________
As Table 9 illustrates, prediction accuracy of the revenue premium (0.52) is better
than brand awareness. If the brand awareness measure from a previous time period
forecasts the current revenue premium value, the MAPE is 0.62. However, if the revenue
premium measure from the previous time period predicts the current brand awareness, the
MAPE is 0.52. These results indicate prediction accuracy is better for revenue premium
than brand awareness.
Findings from regression and cross-prediction analyses consistently demonstrate
product-market performance predicts brand awareness better than vice versa. These
findings do not support H1.
Impact of Marketing Mix Elements on Brand Awareness
Regression analyses explore the association between marketing mix elements and
brand awareness. Distribution intensity positively correlates with advertising expenditure
(r = 0.45, p <.05) and price (r = 0.35, p <.05). To investigate the severity of
multicollinearity, the study assesses two additional statistics for each independent variable:
the tolerance value and VIF value. Although no formal criterion is available for deciding
on the cut-offs for tolerance value or VIF, typically tolerance value less than .1 or VIF
greater than 10 indicates serious multicollinearity (Neter, J., Wasserman, W. & Kutner, M.
H. 1989). In this study, the tolerance values range from 0.58 to 0.94, and the VIFs are
within the range of 1.06 to 1.73, which are thus acceptable values for subsequent
multi-regression analysis (Hair, Anderson, Tatham, & Black, 1998).
Table 10 summarizes the regression analysis results between brand awareness and
marketing mix variables. The overall regression is significant (p<.001) and the model
explains 68 percent of the data’s variance (r-square =0.68). Three independent variables,
distribution, price promotion and price, are found significant in predicting brand
awareness, confirming H3 and H4. The findings, also confirmed by a stepwise regression,
support the proposition that a more intensive brand distribution leads to greater awareness
(e.g. Srinivasan et al., 2008; Yoo et al., 2000). Similarly, the higher a brand spends on
price promotion, the greater the awareness. Finally, the higher a brand’s price, the greater
is the awareness.
Surprisingly, the results show advertising does not predict brand awareness; hence,
this finding does not support H2. This finding contradicts theoretical literature, thus
requires an explanation. The product category in this study is mature and includes brands
with high awareness. Increasing advertising likely has little effect on increasing brand
awareness. Typically, the market share leaders have higher advertising expenditures and
may experience diminishing returns unless their advertising provides some unique/new
information about products, such as new product development.
______________________________________________________________________
Table 10 here
_______________________________________________________________________
DISCUSSION
The current research demonstrates a positive association between brand awareness
and consumer preference for the brand, as well as brand market outcome. This study
provides important implications for managers. First, the current study provides empirical
evidence that brand awareness is important for consumer decision-making. Second, the
results offer insights on the nature of the relationship between brand awareness and
market outcome. Finally, the findings provide direction on how to build and enhance
brand awareness.
This research for the first time tests the direction of causality between brand
awareness and market outcome. Brand equity literature (e.g., brand value chain model)
proposes brand awareness as an antecedent of brand market outcome. However, the
current research finds empirical evidence to the contrary; market outcome is an antecedent
of brand awareness. Specifically, revenue premium predicts brand awareness better than
brand awareness predicts revenue premium. This finding is in the context of frequently
purchased consumer-packaged goods which are low priced and involve little financial or
social risk.
Consumers generally do not invest much time and effort searching for product
information, comparing brands and making purchase decisions. In other words,
consumers unlikely go through the process of “cognition affect behavior” when
they make a purchase among consumer-packaged goods. Instead, they follow Ehrenberg
(1974)’s awareness trial reinforcement sequence (originally proposed for the effect
of advertising). This finding, also in the context of brand equity area, further confirms the
general belief that consumers rarely follow the cognition-affection-behavior sequence (the
authors thank a referee for providing suggestions for the theory background for
discussion).
For low involvement purchases, consumers may follow the “beliefs-behavior-affect”
hierarchy (Mowen & Minor, 2001). Sometimes, consumers do not go through an
elaborate decision-making process before purchasing (Olshavsky & Granbois, 1979). This
finding implies that purchase does not necessarily require brand awareness prior to a
consumer’s visit to the distribution outlet, at least for frequently purchased
consumer-packaged goods. The purchase decision could be made right on the spot. Even
when consumers do not know the brands before their visit to the store, shelf visibility may
induce purchase behavior. This behavior supports the proposition that consumers form
behavior directly given situational or environmental conditions, such as physical
environment (Mowen & Minor, 2001; Nord & Peter, 1980). Product usage experiences
enhance brand awareness. In other words, the more people buy a product, the higher their
brand awareness for the product. This study’s regression results also corroborate the
significance attributed to distribution by cross-prediction analysis, where distribution
turns out to be the most important element establishing brand awareness.
The current findings have important implications for enhancement of brand
awareness and brand market performance. Brand awareness includes brand recognition
and brand recall. Brand recognition refers to whether consumers are able to recognize the
brand. Brand recall means consumers can recall a certain brand during their
decision-making process without priming. Brand recognition requires consumers know
the brand prior to their purchase. Brand recall assumes that consumers go through
decision making process prior to the purchase.
Prioir studies about brand awareness focus on enhancing brand recognition or brand
recall by utilizing advertising, public relation, or promotion. These studies propose
consumers think about brands during their decision making process. For instance, Percy
and Rossiter (1992) propose different strategies and tactics to improve brand recognition
and brand recall depending on different consumer involvement in decision making. For
low involvement product categories, managers should try their best to make consumers
“purchase” the brand on-the-spot at the retail outlets. The current study suggests
consumers’ brand purchase and usage drive brand awareness. Accordingly, brand
awareness creation and enhancement are accomplished by utilizing various on-the-spot
factors in retail outlets. Distribution and in-store promotion induce consumers to
purchase the brand in the first place. Managers should design and implement marketing
activities, such as distribution, promotion, and personal selling to stimulate the purchase
behavior directly. Firstly, managers should utilize the distribution element to its full
potential in order to improve brand awareness and brand market performance, especially
for brands with relatively low awareness and tight advertising budgets. Increasing
distribution intensity is imperative. In addition, improving the product placement quality
in retail outlets increases the odds consumers will choose the brand. Attractive brand
packaging aides display effectiveness. Clear and easy-to-read product instructions and
explanations support this recommendation. Both price and non-price promotions help to
generate brand sales which in turn induce brand usage experience and hence increasing
brand awareness.
Secondly, managers should use price promotions to create brand awareness.
Specifically, price promotion encourages brand switching and provides consumers with
an incentive to try those brands which they would not purchase otherwise at full price.
The price promotion induces brand usage and creates awareness.
A final managerial implication involves sustaining brand awareness. High brand
awareness remained rather stable over the time interval covered by the data (with the
exception of Brand H and K, which are addressed later). This finding is consistent with
that of the Boston Consulting Group study where the leading brands in 19 out of 22
product categories were the same in 1985 as in 1925 (Aaker, 1991). Furthermore,
well-established brands are able to benefit from the awareness they have created for a
reasonably long time, even if advertising support drops (Aaker, 1991).
Of the two brands whose brand awareness is less stable, Brand H’s awareness
declines whereas Brand K’s improves. Brand H’s distribution intensity decreases from 77
percent to 59 percent over time, which may account for the decrease in its brand
awareness. As for Brand K, the increase in brand awareness accompanies a promotion
investment increase over time. As promotion generates product experience, brand
awareness might be enhanced due to product usage experience.
This study’s product category is mature with several already well-established
brands. Improving awareness is difficult due to the saturation effect. For well-established
brands, price promotion should be used with caution. Frequent price promotions
negatively influence overall brand equity (Angel & Manuel, 2005; Darke & Chung, 2005;
Yoo et al., 2000). Price promotions or deep price cuts likely have a negative influence on
the perceived brand quality as well. Furthermore, price promotion also may decrease the
internal reference price in the customer’s mind. Hence, brands with very high brand
awareness should implement price promotions prudently. Marketing managers should
focus on improving the brand’s distribution intensity, which is likely to produce positive
synergies with advertising and/or previous usage experience.
CONCLUSIONS AND LIMITATIONS
This study provides an in-depth investigation of brand awareness, a scarcely
researched topic, and makes three contributions. To address marketing’s accountability
issues, the present work explores whether or not a link exists between brand awareness
and desirable market outcomes, such as sales and market share, and finds that brand
awareness and market outcomes have a positive association.
Second, this paper investigates the link between brand awareness and overall brand
equity, a heavily researched topic with high practical relevance. The present work uses
both customer mindset and product market outcome measures and demonstrates a positive
association between brand awareness, customer mindset brand equity, and brand equity
market outcome measures, including revenue premium, share premium and price
premium. The current findings support the importance of brand awareness on market
outcome metrics for low-involvement, consumer-packaged goods and generalize the past
literature beyond the context of the service industry and survey-based methodology.
However, this research finds that consumers’ brand usage experience contributes more to
brand awareness than vice versa. Experience precedes awareness in some cases.
Finally, the present work investigates the association between marketing mix
elements and brand awareness, finding price promotion’s impact on brand awareness is
positive. Price promotions increase brand awareness through creating brand exposure and
usage experience for consumers. The current research confirms past literature that
distribution intensity has the largest impact on brand awareness.
This research has limitations providing challenges for further research. Firstly, the
future research should replicate these results in other consumer-packaged goods
categories, particularly fast-growing sectors with high levels of new product and
advertising activities. To generalize the results, high-involvement decision products
should be tested. Since consumers typically invest time and energy when gathering
product information prior to purchase in high involvement categories, brand awareness
may predict revenue premium (rather than vice versa) contrary to this study’s findings.
Furthermore, future research should compare the impact of brand awareness and brand
liking, or brand image on sales (the authors thank an anonymous referee who offered this
suggestion.). The impact of different brand equity constructs may be different across
different product categories.
Secondly, brand awareness includes both brand recall and brand recognition (Keller,
1993) but this study did not examine them separately. Future research should develop
separate measures to assess brand recall and brand recognition respectively - further
exploring their relationship with market outcomes. For other product categories, the
impact of brand recall and brand recognition on market outcome may be different. The
effects of marketing mix elements may also show differences on brand recall and brand
recognition constructs.
Thirdly, future research could improve the operationalization of the price promotion
variable. The measure used in the present work, “percentage of sales made on price
promotion”, neglects the depth and frequency of price promotion. Although managers
were provided insight into the association between price promotion and brand equity,
specifics on how to utilize price promotion in terms of the depth and frequency to
improve brand awareness are lacking.
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Appendix:
Table 1: Extant Research Regarding Brand Awareness and Market Outcome
Market
Outcome
Industry/Product
Category
Findings
Baldauf et
al. (2003)
Profit
Sales
Tile
Brand awareness is the antecedent of brand
profitability and sales.
Kim et al.
(2003)
Sales
Hotel Industry
Brand awareness has a positive relationship
to market performance. Significant
differences in brand awareness are found
between high and low market performance
hotels.
Kim & Kum
(2004)
Sales
Restaurant
Brand awareness has a positive relationship
to market performance.
Kim & Kim
(2005)
Sales
Hotel
Restaurant
Brand awareness has a positive relationship
to market performance.
Silverman et
al. (1999)
Sales
Brand
Valuation
Brands valuated
by Financial
World
Brand awareness has a weak correlation to
sales and brand valuations.
Srinivasan et
al. (2008)
Sales
Consumer-
Packaged Goods
Brand awareness could explain for
approximately 3% of the variations in sales.
Table 2: Definition of Market Performance Variables and Data Source
Definitions of Variables
Variable
Definition
Source
Price
Net selling price per unit volume
IRI
Brand Volume
Volume of the brand sold
IRI
Price Premium Charged
Brand’s price – private label’s price
IRI
Percentage Market Share
(Brand’s unit volume sold)/(Category’s unit volume sold)
IRI
Market Share Premium
Brand’s market share – private label’s market share
IRI
Volume Premium
Brand’s unit volume – private label’s unit volume
IRI
Sales
Dollar sales of the brand
IRI
Revenue Premium
(Brand’s unit volume * brand’s net price per unit volume)
– ( private label’s unit volume * private label’s net price
per unit volume)
IRI
Distribution
ACV
IRI
Price Promotion
% of brand’s dollar sales made on a price promotion
IRI
Advertising
Total advertising expenditure (millions of dollars) across
10 media, computed by monitoring advertisements in
each medium/program and applying a relevant rate to
each advertisement
TNS
Table 3: Descriptive Information of Private Label
Variable
Mean
Std.
Deviation
Min
Max
Variance
Net Price
($/unit volume)
0.47
0.009
0.46
0.49
0.00009
Distribution
Intensity
(ACV)
84.7
6.4
70.9
89.6
41.2
Market Share
in Dollar
Value (%)
2.5
0.14
2.3
2.7
0.02
Sales in
Dollars
43,518,711.7
3,174,651.3
38,755,170
48,203,700
1.00784E13
Table 4: Brand Awareness: Descriptive Analysis
Brand
N
Mean
(%)
Std Dev
Min
Max
Variance
Overall
66
76
13.50
38
96
183.7
A
6
72
1.97
69
75
3.9
B
6
76.8
1.30
75
79
1.7
C
6
89.2
1.47
88
91
2.2
D
6
66.7
1.63
65
69
2.7
E
6
73.2
2.22
71
76
4.9
F
6
84.5
1.05
83
86
1.1
G
6
75.5
1.40
74
77
2.0
H
6
72.6
1.90
71
76
3.6
I
6
95.5
0.54
95
96
0.3
J
6
84.2
2.20
82
87
4.8
K
6
42.2
2.60
38
45
6.8
Table 5: Change in Brand Awareness over Time
Brand
Percentage Change in
Brand Awareness (%)
A
4
B
0
C
-3
D
6
E
-5
F
1
G
3
H
-7
I
0
J
-5
K
18
Median of Percentage
Change in Brand Equity
Measure
0
Table 6: Correlation of Customer Mindset Measures and Other Product-market
Performance Measures
Brand Awareness
Customer Mindset
Brand Equity
0.56***
Price Premium
0.49*
Volume Premium
0.33**
Revenue Premium
0.50***
Market Share
0.50***
Share Premium
0.50***
Sales
0.50***
*p < .05
**p < .01
***p<.0001
Table 7: Regress Brand Awareness on Lag Values of Revenue Premium
Dependent
Variable
Model Fit
Parameter
Estimate
P Value
Brand
Awareness
R square = 0.27
F= 15.20 (p=
0.02, d.f. =1)
Intercept
0.72
<.0001
Lag Revenue
Premium
3.31E-10
<.0003
R square = 0.27
F= 11.5 (p=
0.009, d.f. =1)
Intercept
0.72
<.0001
Lag 2 Revenue
Premium
3.30E-10
.0019
R square = 0.30
F= 8.5 (p=
0.008, d.f. =1)
Intercept
0.71
<.0001
Lag 3 Revenue
Premium
3.48E-10
<.0085
R square = 0.29
F= 3.8 (p=
0.08, d.f. =1)
Intercept
0.71
<.0001
Lag 4 Revenue
Premium
3.49E-10
.085
Table 8: Regress Revenue Premium on Lag Values of Brand Awareness
Dependent
Variable
Model Fit
Parameter
Estimate
P Value
Revenue
Premium
R square = 0.23
F= 13.0 (p=
0.0008, d.f. =1)
Intercept
-458,289,972
0.0065
Lag Customer
Mindset
Measure
751,318,629
0.0008
R square = 0.22
F= 8.7 (p=
0.006, d.f. =1)
Intercept
-434,177,244
0.0276
Lag 2 Customer
Mindset
Measure
715,717,222
0.0006
R square = 0.22
F= 5.5 (p=
0.03, d.f. =1)
Intercept
-420,437,296
0.08
Lag 3 Customer
Mindset
Measure
700,747,400
0.03
R square = 0.18
F= 2.0 (p=
0.19, d.f. =1)
Intercept
-378,845,788
0.31
Lag 4 Customer
Mindset
Measure
645,384,682
0.19
Note: d.f. = degrees of freedom
Table 9: MAPE Measures of Prediction Accuracy
MAPE
Lag brand awareness to predict current revenue premium
0.62
Lag revenue premium to predict current brand awareness
0.52
Lag 2 brand awareness to predict revenue premium
0.60
Lag 2 revenue premium to predict current brand awareness
0.52
Lag 3 brand awareness to predict current revenue premium
0.65
Lag 3 revenue premium to predict brand awareness
0.52
Table 10: Regression of Brand Awareness on Marketing Mix Elements
Brand Awareness as Dependent Variable
R-square = 0.68
F= 26.22 (p< .0001, d.f. =5)
Regression Coefficient
Independent Variables
Un-standardized
Standardized
Intercept
0.026
(0.08)
0
Advertising Expenditure
0.000002 (0.000)
0.13
Distribution
0.004 (0.001)***
0.43
Price
0.21 (0.04)***
0.50
Price Promotion
0.02(0.003)***
0.42
Time
0.004 (0.006)
0.05
*p < .05
**p< .01
*** p < .0001
Notes: The standard errors are in parentheses; d.f. = degrees of freedom
