Brand Equity Concept

One of the most popular and potentially important marketing concepts to arise in the 1980s was brand equity. However, its emergence, has meant both good news and bad news to marketers. 

The good news is that brand equity had elevated the importance of the brand in marketing strategy and provided focus for managerial interest and research activities.

The bad news is that, confusingly, the concept has been defined a number of different ways for a number of different purposes. No common viewpoint has emerged about how to conceptualize and measure brand equity.

Despite the many different views, most observers agree that brand equity consists of the marketing effects uniquely attributable to a brand. That is brand equity explains why different outcomes result from the marketing of a branded product or service than if it were not branded.

Branding is all about creating differences. Most marketing observers also agree with the following basic principles of branding and brand equity:

• Differences in outcomes arise from the "added value" endowed to a product as a result of past marketing activity for a brand.
• This value can be created for a brand in many different ways.
• Brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a brand.
• There are many different ways in which the value of a brand can be manifested or exploited to benefit the firm. 

Fundamentally, the brand equity concept reinforces how important the brand in in marketing strategies. It clearly builds on many previously identified principles about brand management. By virtue of the fact that it adapts current theorizing and research advances to address the new challenges in brand management created by a changing marketing environment, the concept of brand equity can also provide useful new insights.