Brand Equity

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UNDERSTANDING BRAND EQUITY ANSWERS TO TEN COMMON BRANDING QUESTIONS Kevin Lane Keller Tuck School of Business Dartmouth College UNDERSTANDING BRAND EQUITY ANSWERS TO TEN COMMON BRANDING QUESTIONS One of the most popular and potentially important marketing topics to arise in the 1980 's was the concept of brand equity. The emergence of brand equity, however, has meant both "good news" and "bad news." The good news is that it has raised the importance of the brand in marketing strategy -- which heretofore had been relatively neglected -- and provided impetus for managerial interest and academic research activity. The bad news is that the concept has been defined a number of different ways for a number of different purposes,…show more content…
3 Role of brands to consumers. To consumers, brands provide important functions. Brands identify the source or maker of a product and allow consumers to assign responsibility as to which particular manufacturer, distributor, or provider should be held accountable. More importantly, brands can take on special meaning to consumers. Because of past experiences with the product and its marketing program over the years, consumers learn about brands. They find out which brands satisfy their needs and which ones do not. As a result, brands provide a shorthand device or means of simplification for their product decisions. If consumers recognize a brand and have some knowledge about it, then they do not have to engage in a lot of additional thought or processing of information to make a product decision. Thus, from an economic perspective, brands allow consumers to lower search costs for products both "internally" (in terms of how much they have to think) and "externally" (in terms of how much they have to look around). Based on what they already know about the brand -- its quality, product characteristics, etc. -- consumers can make assumptions and

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