Examining the Impact of Brand Equity on Customer Equity

In this study applying two new macro measures of brand equity and customer equity which are objective, and based on publicly available data, we study the impact of brand equity on customer equity quantitatively. Additionally we capture the impact of advertising spending as a main marketing action on customer equity directly and indirectly via brand equity. As a longitudinal study, we estimate and examine the model parameters over a period of 11 years from 2002 to 2012 to capture the pre and post GFC. We apply our model into four industries in service and product industries including airline, banking, fast food, and department store in the US market. The result show that brand equity is positively associated to customer equity and on average one unit change in brand equity can be resulted in up to 0.40 unit change in customer equity. Moreover brand equity can improve the advertising impact on customer equity. Finally it was found that brand equity can considerably explain the variation in brand value from %8 in fast food industry to %20 in banking and department store.