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1. Introduction
The emergence of international brands competing in diverse geographical markets has given rise to the issue of how brands should be managed in a global landscape. However, while the importance and management of brands from the perspective of domestic marketing has been notably addressed in the literature, studies examining brands from an international perspective are limited ([61] Wong and Merrilees, 2007). Specifically, the role of brand equity in international marketing has not been explored in detail ([45] Pappu et al. , 2006; [60] Whitelock and Fastoso, 2007; [6] Broyles et al. , 2010).
Assessing brand equity in global markets becomes a complex task ([26] Hsieh, 2004). Surprisingly, in the literature rooted in the cognitive psychology paradigm, few studies to date have explored consumer-based brand equity simultaneously in different countries. However, to ensure a successful strategy in building strong brands globally, an understanding of brand equity in different markets is needed ([64] Yoo and Donthu, 2002). This will help companies to protect and enhance this valuable asset.
In addition to the measurement of brand equity, it is important to understand how brand equity influences attitudes and consumer behaviour ([25] Hoeffler and Keller, 2003). Ultimately, the value of a brand is derived in the market through the actions of consumers. The study of its outcomes has become, therefore, an urgent and challenging task ([57] Wang et al. , 2008; [7] Broyles et al. , 2009). Yet, most articles assume that brand equity has positive effects on consumer responses ([15] Cobb-Walgren et al. , 1995) and those that empirically try to investigate this issue use different proxies of brand equity, such as familiarity or market share ([25] Hoeffler and Keller, 2003). Thus, there is a paucity of empirical research which explores the relationship between consumer-based brand equity and consumer response.
Addressing these gaps, this paper proposes and tests a model to better understand brand equity and investigate the effects of this construct on consumers' responses using data from two European countries. In particular, it examines the effect of brand equity on consumers' willingness to pay price premiums, consumers' attitude towards brand extensions, brand preference and purchase intention.
This research is intended to add to the extant literature in several ways. First, much of the published brand...