First of all we’ll discuss about topic and the definaition of the topic so the reader can easily

understand the meaning of the topic

What is advertisement ?

Advertising is a form of communication used to influence individuals to purchase products or

services or support political candidates or ideas. Frequently it communicates a message that

includes the name of the product or service and how that product or service could potentially

benefit the consumer. Advertising often attempts to persuade potential customers to purchase

or to consume a particular brand of product or service. Modern advertising developed with the

rise of mass production in the late 19th and early 20th centuries(1)

The American marketing association defines advertising as “any paid form of non-personal

presentation and promotion of ideas, goods or services by an identified sponsor”. Advertising

doesn’t change the physical properties of the product but than also it is the most compulsory

expense for creating demand for the product.

What is branding??

The branding started in sweden in the middle age between (475-1492). . Entomology tells us

that the word“brand” is a degenerate of the old Norse word “brandr”. The Vikings may have

spread the word “brandr” in England, where it was finally integrated into daily language. This is

how the word band came into being. In trade law, the word trademark is used as an alternative

of the word “brand”. Patents and Trademarks were legally known for the first time with the

establishment of the Venetian Patent law in 1474.(1) The meaning of a brand was later

registered in the dictionary in 1552 as “identifying mark made by a hot iron” 5. It was in

between the mid 16th century and the beginning of the 19th that the word “brand” began to

be related to trade, emotions and trust. A trademark was a symbol that would differentiate the

goods between manufacturers.

Start of brand advertising ?

One of the first advertising agencies was founded in New York in 1864 as Carlton and Smith, an

advertising agent buying and selling space in the popular religious journals of the nineteenth

century, the firm was purchased and renamed by James Walter Thompson in 1878(3). It is said

that as early as 1874 William Hesketh Lever, one of the founders of Unilever, began advertising

and selling a soap called Lever’s Pure Honey in Europe(4). Similarly in the US five years later

(1879), Harley Procter, one of the founders of Procter and Gamble (P&G), branded a white soap

with the name “ivory”. Ivory’s ad from 1881 is one of the earliest copy ads identified today. This

ad from P&G highlighted the attributes and functional benefits of the product. Stating that the

“ivory soap” “floated” and that it was “99 44/100% pure,” a dual claim which today is one of

the oldest and most famous ad slogans ever(4)

What is brand equity?

It is not clear who invented the expression of brand equity, but few uses of it have been traced

before the mid-eighties (Ambler & Styles 1995)(5).but in early 80s Kevin Lane

Keller start reading the memory factors and their importance in advertisment and its relation

with consumer brand evaluations in the moment of purchase, “Memory Factors in Advertising:

the effect of advertising Retrieval Cues on Brand Evaluations, 1987”.

In the early 90s David A. Aaker and Keller published articles such as “Consumer Evaluations

ofBrand Extensions” 1990; and Managing Brand Equity: The Impact of Multiple Extensions”

1990”. These two articles were followed by the now classic book Managing Brand Equity by

David A. Aaker 1991. In this book Aaker presented the idea of brand equity accompanied by

diffirent historical examples and cases. The model of brand equity was presented by Aaker

following the need to manage brands strategically by creating, developing and exploiting each

of the five assets that would create value; namely: Brand Loyalty, Brand Awareness, Perceived

Quality, Brand Associations and other proprietary brand assets. This model would finally come

to clarify for managers exactly how brand equity contributes to value.

Reference:

1. http://www.jpo.go.jp/seido_e/rekishi_e/nenpyoe.htm

2. Online Etymology Dictionary, © 2001 Douglas Harper

3. http://library.duke.edu/specialcollections/hartman/guides/jwt-history.html

4. Wally Olins, On Brand, Wally Ollins (2003) pg., 54

5. Paul Feldwick, What is brand equity anyway, and how do you measure it? Best Paper

Award, Market Research Society Conference 1996

PURPOSE STATEMENT

The primary purpose of this study is to determine the impact of advertisement on brand

equity.and secondly to find out the relationship between advertisement and brand equity how

a good advertisement can create brand awareness,brand perceived quality and brand loyalty

and association.

SIGNIFICANCE OF THE STUDY

This study will help marketers for developing the better brand equity in the minds of

customers.On which area they should work more and also this will explain them how they can

make brand awareness in order to In order to build strong brand equity effectively, managers

must invest in the advertising sector to get more and more profits.this study will help managers

how they can make their brands more popular and get more brand equity. The importance of

brand equity consists in many benefits for companies that own brands. Brand equity has

positive relationship with brand loyalty. Moreexactly, brand equity increases the probability of

brand selection, leading tocustomer loyalty to a specific brand (Pitta and Katsanis, 1995). One of

the benefits provided by high brand equity is the possibility of brand extension to other product

categories. Generally, brand extension is defined as the use of an existing brand name for entry

into a new product category (Aaker and Keller, 1990). Whencompared to new brand names,

brand extensions have lower advertising costs and higher sales (Smith and Park, 1992).

Successful brand extensions contribute to higher brand equity of the original brand (Dacin and

Smith, 1994; Keller and Aaker, 1992)

RESEARCH QUESTIONS OR RESEARCH HYPOTHESES

H1: Advertising affects brand equity

H1a: Advertising is positively related to brand awareness.

H1b: Advertising is positively related to perceived quality.

H1c: Advertising is positively related to brand loyalty

Literature review

Brand equity has been described as the added value endowed by the brand to

The product (Farquhar, 1989). It means brand equity is the asset of the company. Brand

Managers realize that similarity exists in most categories as a result of ``copy cat’’ or look-alike

advertising and the creation of me-too brands (Aaker,b 1991; Cobb-Walgren et al., 1995). Price

competition through the over use of short-term price promotions has led to a reduction in the

profitability of brands (Aaker, 1991; Cobb-Walgren et al., 1995). This has led retailers and

Manufacturers to examine ways to enhance loyalty or brand equity toward their brands. A

brand is a name, symbol, design, or mark that enhances the value of a particular product or

service (Farquhar, 1989; Cobb-Walgren et al., 1995). A review of the literature on brand equity

shows that at the

Conceptual level there is extensive agreement as to what is meant by brand and brand equity.

Most authors provide definitions of brand equity that are generally similar to Farquhar’s (1989)

definition of equity as the value added by the brand to the product (e.g. Srinivasan, 1979;

Aaker, 1991; Kamakura and Russell, 1993; Keller, 1993; Simon and Sullivan, 1993).

Brand equity, a measure of the overall value of a brand (Keller, 1998), is a key concept in brand

management. Brand equity has been identified as a valuable source of competitive advantage

for many organizations (Aaker, 1991; Bharadwaj, Varadarajan and Fahy, 1993; Keller ,1998).

Keller (1993) conceptualizes brand equity as “the differential effect of brand knowledge on

consumer response to the marketing of the brand”. Furthermore, Keller (1) proposes brand

knowledge as central to the definition of brand equity and contends that high levels of brand

knowledge increase the probability of brand choice, and (2) defines brand knowledge in terms

of brand awareness and image. Keller conceptualizes brand awareness as “the strength of the

brand trace in memory that is reflected by the consumer’s ability to identify the brand under

different conditions” and defines brand image as “perceptions about a brand as reflected by the

brand associations held in consumer memory”. The customer-based brand equity is a set of

brand-related associations held by the consumer in memory (e.g., Keller, 1993). Under this

perspective, brand equity is regarded as being largely attitudinal in nature, composed of beliefs,

affect, and other subjective experiences related to the brand (i.e., brand attitude, brand image,

etc.) In addition, existing research on brand equity is used to identify four cognitive

“components” of customer-based brand equity. These are labeled as global brand attitude,

strength of preference, brand knowledge, and brand heuristic (Girish and Clayton, 2004).

Others have tried to further extend brand equity by including constructs, such as brand loyalty,

brand awareness, perceived quality, in addition to brand associations (e.g., Aaker, 1991; Keller,

1993)

Brand equity is defined as a set of assets and liabilities linked to the brand, which add value to

or subtract value from a product in its relationship with customers (Aaker, 1991). Aaker

believed that the value of brand equity came from five brand equity assets(brand loyalty, brand

awareness,

perceived quality, brand associations and other proprietary brand assets), in which perceived

quality and brand associations were two most important assets. All these brand equity assets

could bring value for the enterprise and customer. The brand loyalty based on client can defend

the attack of competitor’s marketing, and the effect of competitive manufacturer’s marketing

efforts to attract the loyal customer of other brand is always unsatisfactory. Brand awareness

can provide the familiarity to a brand and the signal of substantiality and promise if the

customer knows the brand; while it will influence the consideration of customer to brand and

further influence the selection of customer on brand when the brand is memorized. The

perceived quality can influence the purchase decision and brand loyalty directly, especially

when the customer has not been stimulated by inducement or can’t make detailed analysis.

Brand association can assist customer to deal with or memorize information and become the

base of product difference and product extension, which will provide a purchase reason for

customer and arise positive feeling.

From the viewpoint of Aaker, the study can find that brand equity can bring value for both

client and manufacturer, and the client value from brand equity is the base to create

manufacturer value. In five assets of brand equity, brand loyalty may be influenced by other key

dimensions (brand awareness, perceived quality and brand associations) of brand equity;

therefore brand loyalty can be regarded as the primary base of brand equity and independent

from other dimensions.

In five assets, other proprietary brand assets (patent, trademark and distributors etc.) are

harder to measure the perspective of customer. In this case, this make perceived quality, brand

loyalty, brand awareness and brand associations as the measure variables of brand equity

based on the achievements of above scholars (e.g., Aaker, 1991; Keller, 1993).

Brand awareness

This is an important

foundation to make readers more receptive to other brand building messages. As

previously noted, awareness and familiarity of a “product” affect the consumer’s

perceptions, beliefs, taste, and liking (D. A. Aaker & Joachimsthaler, 2000; Miles Homer,

2006); and brand recognition even leads to positive assumptions about the quality of the

product (D. A. Aaker, 1996a, p. 11), another brand equity component. Universities are

also undoubtedly keen to convey the leadership, success, quality and excitement that

brand visibility brings with it (Joachimsthaler & Aaker, 1999). Consumers also tend to

give more attention, comprehension and retention to familiar brands (Tellis, 1988, as

cited in Hoeffler & Keller, 2003). Recognition and awareness often reflect familiarity

gained from past exposure. Recognition alone can result in liking and more positive

feelings about a brand, sometimes called the ‘halo effect’. One point of concern for

uOttawa should be those readers who were unsure or disagreed that RP sparked their

interest in uOttawa research (total of 86). This group would have been a great source of

information if there had been a method for probing or direct follow up. If there was a

focus group study of RP readers at some point in the future, this group could offer

interesting and valuable information on why the magazine is not generating this

awareness and how it could be accomplished. This would provide insight into whether

this lack of brand awareness creation is based on a URM’s non-effectiveness overall or

due to the content and style of this particular URM. When asked to name three of

Canada’s top five research universities, respondents filled in their own responses, without

being offered any named choices. Therefore, these results provide an indication as to

which universities enjoy the best top of mind awareness among respondents

Perceived Quality:

Perceived quality would be an important brand asset for universities for two

reasons—it is often the major if not principal strategic thrust of its business, and it is

linked to and often drives other aspects of how its brand is perceived (D. A. Aaker,

1996a). Naturally, the quality of teaching and research in universities is one of the topics

of interest to current and potential students, their parents, faculty as well as the media.

Most importantly, it differentiates and positions the brand compared to competitors and

Brand loyalty:

Brand loyalty is at the heart of any brand’s value according to Aaker and

Joachimsthaler (2000). A brand with a small but intensely loyal customer base can have

significant brand equity since loyal customers are more likely to pay a premium, refer

others to the brand and generally spend more money (Reichheld, 1994; as cited in Tom

Duncan & Moriarty, 1998). In fact, Aaker (1996b) asserts that the value of other

measures such as perceived quality and associations often depends on their ability to

influence loyalty. Such loyalty among existing “customers” represents a substantial

barrier to competitors and decreases the vulnerability of a brand since consumers’

favourable attitude towards a brand leads them to buy or stay with that brand (Rubinson

& Pfeiffer, 2005). Brand loyalty in a university context manifests itself in a number of

ways: current undergraduate students enroll in graduate studies at the same university; or

alumni, employees and faculty enroll their children at the university and donate money to

the institution. In 2006, the University of Ottawa introduced a Homecoming Week to

reinvigorate and strengthen the loyalty of alumni to the institution.

Relationship between Advertising and Brand Equity

Advertising expenditure, as the main marketing communications tool in the consumer market,

should be considered when determining the effects of marketing communications on

consumers, and the perceptions that the messages are provoking among different target

individuals (Angel and Manuel, 2005). Keller (2003) notes that the firm’s marketing

communications contribute to brand equity. That is, effective communication enables the

formations of brand awareness and a positive brand image. When consumers perceive high

spending on advertising, this contributes to their perception of the level of confidence that

marketing managers have in the product (Kirmani and Wright, 1989). Perceived advertising

spending has positive effects, not only on brand equity as a whole, but also on each of the

elements it is made up of: loyalty, awareness, perceived quality and brand associations (Cobb-

Walgren, Ruble and Donthu, 1995).

The relationship between perceived quality and spending on marketing communications was

justified by different studies (Milgrom and Roberts, 1986; Kirmani and Wright, 1989; Aaker and

Jacobson, 1994; Archibald, Haulman and Moody, 1983). The work shows the favorable

relationship between marketing communications spending and the firm’s investment in the

brand, which involves a higher perception of quality. The relationship between the investment

in marketing communications and quality affects not only the perceived brand quality, but also

supports the purchase decision by increasing the product value, as shown by Archibald et al.

(1983) — i.e. the recipient of the advertising considers the perceived advertising spending on

the brand as reaffirming the purchase decision.

From the study of former scholars, we can find that scale variables of brand equity such as

“brand awareness” and “brand attitude” can use “exposure effect” to increase the evaluation of

customer to the brand. Zajonc and Markus (1982) pointed out that “exposure effect” mean the

effect when some marketing objective was exposed repeatedly. The masses will have more

positive attitude to the marketing objective if it is exposed regularly. Anand, Holbrook and

Stephens (1988) also proved that “exposure effect” was a key factor to alter the preference and

attitude in the later study. Laroche, Kim and Zhou (1996) also validated the influence of

“exposure effect” on “brand knowledge”, “brand attitude”, “brand familiarity” and purchase

willing and confidence. Archibald et al. (1983) pointed out the relationship between the

investment in marketing communications and quality affects not only the perceived brand

quality, but also supports the purchase decision by increasing the product value. Hence

advertising expenditures are likely to be positively related to brand equity

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