Brand equity in the European fruit and vegetable sector: A transaction cost approach

We link both marketing and transaction cost economics (TCE) literature to explain factors determining brand equity from the buyer's perspective. We argue that TCE offers an appropriate framework for understanding the value added by each brand name. We claim that brand names are more valuable by buyers when contractual hazards (opportunism) in the transaction are higher. Results from an exploratory analysis of fourteen EU fruit and vegetable brand names indicate that the price premium (as a proxy for the brand equity) will be greater when the brand name addresses less informed parties and when search/measurement costs are substantial. Furthermore, consumers seem ready to pay a higher price premium for co-branded products. We consider this as an indicator that each brand name is specialized in guaranteeing different attributes and that they complement each other.