WHAT IS BRAND EQUITY?
Ans. Before looking at the various methods of brand building it is essential to know what brand equity is because strong brand equity is the basis of brand building.
Keller defines brand equity as “Brand equity is defined in terms of the marketing effects uniquely attributable to the brands — for example, when certain outcomes result from the marketing of a product or service because of its brand name that would not occur if the same product or service did not have that name.”
David Aaker defines brand equity as “A set of assets and liabilities linked 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.”
The major asset categories are:
1. Brand name awareness
2. Brand loyalty
3. Perceived quality
4. Brand associations
Several aspects of this definition require elaboration. First, brand equity is a set of assets. Thus the management of brand equity involves investment to create and enhance these assets. Second such brand equity asset creates value in a variety of very different ways. In order to manage brand equity effectively and to make informed decisions about brand building activities it is important to be sensitive to ways in which strong brands create value. Third brand equity creates value for the customer as well as the firm. The word customer refers to both end users and those at the infrastructural level. Finally for assets or liabilities to underlie brand equity they must be linked to the name or symbol of the brand. If the brand’s name or symbol should change, some or all of the assets or liabilities could be affected or even lost, although some might be shifted to the new symbol or name.
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