The Application of Customer Equity Concepts in Cellular Phone: Antecedents, Constructs, and Consequences

Generally, higher brand equity ends up with higher market share and higherprofitability. However, superior brand equity does not guarantee the success inthe market. That is, consumer choice is closely related to brand equity but weneed more than brand equity to explain this complex phenomenon. We adopt thecustomer equity concepts: value equity, brand equity, and retention equity. Byincorporating value equity and retention equity into customer equity, it is possibleto avoid the problems of using the brand equity only. In the paper, we applythis customer equity concepts to cellular phone and investigate the effects ofantecedent variables such as exposure, knowledge, positive experience and negativeexperience on the components of customer equity. In addition, as surrogate measureof customer lifetime value, the weighted measure of purchase intention, considerationset inclusion, and next purchase is used as dependent variable. We estimate theeffects of components of customer equity at the brand level and aggregate levelusing SURE model. Estimation results show that Apple has currently low market sharebut has high future potentials and Korean firms have currently high market share buthas rather low future potentials.