The relative importance of Customer Equity and Brand Equity in selected South African Industries
Date
2012-10-08
Authors
Jardim, Claudia
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Abstract
At the forefront of the marketing battlefield, Customer Equity and Brand Equity have been identified as important drivers of shareholder value. Fulfilling this role, Brand Equity is viewed as the inherent value of the brand and Customer Equity is the sum of the discounted lifetime value of individual customers. Given the increasing call for accountability of the marketing function for the measurement and management of these intangible marketing assets, it is relevant to consider the market shift from a goods centred approach towards services. Hence the dilemma facing organisations today is where to invest the next marketing Rand, in the brand or the customer?
The specific area of focus of this research pertains to the debate of investing in Brand Equity, Customer Equity, or both. The relative marketing management focus of differing industries has been used as the cornerstone for this study. Additionally the research extends to ascertain potential determining factors for the relative focus. The study also establishes whether the respective significance ascribed by certain industries is consistent with the knowledge contained in current literature.
Data was collected from 123 respondents through personal interviews, both telephonic and face to face, with the majority being conducted face to face. Additionally 5% of responses were completed electronically. The data was analysed using Principal Components Analysis to determine the areas of managerial focus where the validity of the results was confirmed through a Structural Equation Modelling Path. The arithmetic mean of the marketing budget split has been used to determine the focus on Brand Equity and Customer Equity. Descriptive statistics were used to establish the determining factors of the relative focus.
The key findings were that marketers do split their focus between Brand Equity and Customer Equity, but a third dimension was found, namely Customer Acquisition as a marketing focus. A model for marketing management was developed based on the findings from the Principal Components Analysis. Recommendations to the various industries are offered for use of the model derived in this research. The purpose therefore is to provide value in terms of resource allocation in terms of marketing spend, hence enhancing accountability of the marketing function within the organisation.
Description
MBA thesis - WBS
Keywords
Customer equity, Brand equity, Marketing