Measuring brand equity for organising brand management in the energy sector: A research proposal and first empirical hints Part 1: The development of a theoretical concept and a research programme

Abstract

Conventional branding wisdom holds that brand equity is contained in the form of brand knowledge in the minds of the customers. In order to build strong brands it is of crucial importance to identify positive and unique brand associations from the perspective of the customer. Against this background, causal modelling of brand associations and their impact on customer retention is highlighted as a suitable concept for measuring brand equity for brand management organisation in the energy sector. The concept is demonstrated through an empirical study which analyses brand association patterns in the minds of commercial enterprise customers and their impact on customer retention in the German energy market. The results indicate that it might be possible to escape from the price pressure which emerged in the course of the liberalisation of the energy market, but only if a differentiated brand association network is implemented. In the case of the German local utility companies, such a brand association network could specifically centre on an integrated approach of local importance branding. This paper is divided into two parts. Part 1 introduces the problem of customer retention via branding in the German energy market. A theoretical framework for measuring brand equity with the help of brand association patterns—specifically brand associations that are able to maintain customer retention—is developed. Part 2 concentrates on presenting some empirical evidence to prove the theoretical concept developed in Part 1 and gives an outlook for future research.