The Effect of Brand Equity in Supply Chain Relationships

A systematic review of the marketing literature on brands reveals very few studies devoted to understanding brands in interorganizational exchange; however, the failure to successfully manage relationships with supply chain partners is now seen as a potentially fatal obstacle to the success of a brand (Shocker, Srivistava and Ruekert 1994). Focusing exclusively on managing the brand in consumer markets ignores the needs of important downstream customers such as distributors and retailers and fails to capitalize on the potential for leveraging brand equity to create added value with upstream suppliers.

A multiple method approach was used to explore the phenomenon of brand equity in the supply chain. First, a qualitative study using grounded theory methodology was employed to explore the meaning of brand equity in the supply chain and to provide the ground for a theory of the effect of brand equity in supply chain relationships. Sixteen executives across six firms were interviewed for the study. A quantitative test of hypothesized theoretical relationships was then conducted employing survey methodology for data collection and structural equation modeling for data analysis. The survey was conducted in the home appliance industry with retailers as respondents.

Traditional ways of thinking about branding from a consumer perspective have produced "both an incomplete analysis of branding from an academic perspective and incomplete management of the brand from a company perspective" (Webster 2000, p. 22). This research addresses this gap in the literature and proposes directions for future research that have the potential to make a significant contribution to both marketing practice and academic research.