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The Concept of Customer-Based Brand Equity

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1.1. The Concept of Customer-Based Brand Equity (CBBE)

With creating a strong and unique brand, brand equity should be taken into consideration. In order to build a strong brand, shaping how customers think and feel about the product or service is essential.

Keller (2015) suggests that Customer-Based Brand Equity (CBBE) approaches brand equity from the perspective of the customer. Customer usually has a high level of awareness of the brand and special brand associations in their minds.

In the concept of CBBE, brand knowledge is a leading role in creating brand equity. Indeed, brand knowledge consists of two components, brand awareness and brand image. Keller’s model consists of four steps to build strong brand equity.

Brand awareness is related to the ability of customers whether they can recognize or identify the brand under different situations (Rossiter & Percy, 1987). Alike to initial brand image definition, usually associate with perception and interpretation about the brand in customer’s memory. In this assignment would focus on how H&M can apply the framework and strengthen its brand.

Brand Identity

Brand identity refers to creating brand awareness (Keller, 1993) so that customers are aware of it. According to Aaker and Joachimsthaler (2000) hold the view that brand identity is representing what the company wants the brand to stand for in the mass market.

Meanwhile, brand identity includes different elements, such as “colors, design, logotype, name and symbol. These elements should be memorable, significant, likeable, portable, flexible and protectable (Aaker, 1996).” In the case of H&M officially stands for Hennes & Mauritz AB who is the name of founder. However, in public it is also known as H&M. As the logo of H&M quiet simple and represent the brand name which in red color. There is no doubt that H&M would be easily pronounced and recognized. When you hang out in shopping mall, you can easily find the location of H&M as the logo is red. Such effective and consistent brand name will increase H&M brand equity as well.

A good brand identity of firm should be different from competitors. Bhimrao M. Ghodeswar suggest that (2008, pp. 4-12) the brand identity should pay attention on points of differentiation and competitive advantage. H&M has set the brand meaningful from the competitors in the target customers’ mind by “offering fashion and quality at the best price”. To fulfill the motto of H&M: “fashion and quality at the best price” (Hm.com, 2015), H&M is using direct channel by eliminating middlemen in channel strategy. H&M practices intensive channel network in Hong Kong. Since H&M retail shop usually location

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