Co-building brand equity and customer equity through marketing capabilities: impact on competitive advantage

Abstract

This research aims to analyse the potential overlap of brand and customer management decisions in terms of their outcomes. We work with a sample of 201 service companies. We combine survey and accounting data. Our research analyses empirically the relationship between brand equity and customer equity and connect them with marketing capabilities and competitive advantages under the same framework. According to our results, brand equity and customer equity are related assets that are built upon the same marketing capabilities; these assets - together with industry level factors - strongly affect competitive advantage formation. Particularly, brand equity mainly allows companies to increase their prices. In turn, customer equity leads to a higher loyalty of the customer base of firms. Our results indicate that brand equity and customer equity need to be jointly managed, in order to correctly evaluate how brand equity and customer equity contribute to profitability.