Concept of Brand Equity

Brand equity as a concept has emerged and gained popularity in 1980s. however, its emergence has brought some good news and some bad news for the marketers.

Good news is because so long the brand was one of the neglected aspects of total marketing, now it gained lot of attention. So lot of development in the field of brand management owes to brand equity concept.

Bad news is because various researchers and practitioners have given their own point of view in which each one of the researchers is defining brand equity in owns own context. This differences can be highlighted by the following definitions

o According to David A. Aaker(1991), brand equity is “a set of assets(and liabilities) link to a brand’s name and symbol, that adds to (or subtracts from), the value provided by a product or service to a firm and/ or that firm’s customers.”

o Lance Leuthesser, et al (1995) wrote that “… brand equity represents the value(to a customer) of a product, above that which would result for an otherwise identical product without brands name. in other words’ brand equity represents the degree to which a brand’s name alone contributes value to the offering(again, from the prespective of the consumer).”

o The Marketing Science Institute(1988) defines brand equity as, “the set of associations and behaviours on the part of brand’s customers, channel members, and parent corporations that permits the brand to earn greater volume and greater margins than it could without the brand name and that gives the brand a strong, sustainable and differentiated advantage over competitors.”

o Jhon Brodsky (1991) states brand equity as, “The sales and profit impact enjoyed as a result of prior years’ marketing efforts versus a comparable new brand.”

o Rajendra Srivastava and Allen D. Schocker, discussed the scope as, “Brand equity subsumes brand strength is the set of associations and behaviours on the part of a brand’s customers, channel members and parent corporation that permits the brand to enjoy sustainable and differentiated competitive advantages. Brand value is the financial outcome of management’s ability to leverage brand strength via tactical and strategic actions in providing superior current and future profits and lowered risks.”

Fundamentally, branding is about endowing products and services with the power of brand equity. Although the number of different specific views of brand equity may prevail most observers are in agreements that brand equity should be defined in terms of marketing effects that are uniquely attributed to a brand.

More over the marketing effects pay only when customers recognized and accept the same. That is the reason brand equity should be customer-based. A brand is said to have positive customer-based brand equity when customers react more favorably to a product and the way it is marketed when the brand is identified than when it is not (e.g., when it is attributed to a fictitiously named or unnamed versions of the product.)

Tags: brand, brand equity, Brand Power, Brand sponser, Branding