‘Brand Equity’ is a very often used and misused phrase. This phrase is present in almost every text that one reads about marketing in general and branding in specific. But how many of us know what exactly does this mean!! All of us use this phrase during our Branding classes and even in all the written exams that we take related to this subject. But it is only when asked specifically what this means is when so many of us get confused!!
Let us try to see what this phrase actually means…. In simple words the following is a definition of Brand Equity:
“Differential effect that brand knowledge has on consumer response to the marketing of that brand”
Read the above definition again…. Now take examples of brands and see if it is true or not! When I see an ad of Airtel, my response to this marketing activity is very different from my response to an ad of BSNL. This is due to Brand Equity. The more the equity of a brand, the more favourable is the consumer response to that brand.
Another important point to be noted here is that if there is no differential consumer response, then the marketed product is not a brand but a commodity.
Try and look at each marketing activity from now on and try to think how our response to it is different from what it would have been had it the marketing not come from the same brand. This exercise shall help us internalize this simple definition of Brand Equity…
The next post on this blog shall discuss a more technical definition of this phrase and make an attempt to taking the concept to a more formal level… Till then, happy exercising!! (My exercising I mean internalizing the concept through the exercise mentioned above)
