Brand equity in the industrial purchase decision : a case study of the Swedish market for agricultural machinery

Abstract: High brand equity is a great asset for companies that operate their business in a free and competitive market. Brand equity can arise from both product-related and non-product related attributes and may be viewed from many different perspectives. This study examines which different attributes that contribute to enhance brand equity from customers point of view at the Swedish market for agricultural machinery. The study have been developed using a comprehensive literature search in order to investigate the field regarding brand equity and brand image. The literature review results in one product specific and one non-product specific approach in order to examine factors that contribute to enhanced brand equity. This takes the form as one survey-based approach regarding the non-product related attributes which is examined by interpreting the extra value added by different attributes. A telephone interview was conducted and just over 120 respondents who operate a farm in the south part of Sweden answered the survey. The product related attributes, where the brand as such is included as one attribute are examined through a Hedonic pricing model. The hedonic pricing model is estimated for different soil cultivators due to fewer objective differences between different brands compared to for example planters. Results from the survey based part show factors that customers perceive as contributing to enhanced brand image, respectively factors that not will affect the overall impression of a manufacturer. For example it is shown that the perception of an innovative company enhances the overall impression respectively financing alternatives in connection with the purchase offered by the manufacturer or dealer will not enhance the overall impression. From the hedonic pricing model it is possible to examine to what extent some different product related attributes affect the sales price. For example, an increase in tractor requirement by one horse power results in a price increase of 650 SEK. In addition it is revealed that a soil cultivator manufactured by Väderstad-Verken is characterized by a higher price compared to some other brands.