How Your Company Can Create Brand Equity

Readers interested in branding… read on! As you may remember, we are writing a four-part article designed to help you better understand the domain of branding—in particular, the idea of brand equity and how to create it for your company.

Past Travels

Our first article tried to clarify this confusing area by defining a number of different and often poorly defined terms used in the branding literature—terms like brand equity, brand strength, brand strategy, brand image and so on. This step is essential because we can't make progress toward building brand equity unless we know what we are talking about.

Our second article described a measure of brand equity. We defined brand equity in financial terms and described it as the value of a brand to a company: more specifically, the brand's efficiency in attracting and retaining customers. We developed a measure of brand equity that uses readily available metrics, including revenue and marketing costs, to measure the brand's efficiencies in attracting and retaining customers.

The Road Map for Today

This third article in the series pulls together the first two articles by suggesting how some of the ideas described in the first relate to the creation of brand equity. Here, we use research from psychology and consumer behavior to describe the things that must go on in customers' heads to make them buy the brand (initially and repeatedly—i.e., stimulate customer acquisition and retention) and do so in a way that minimizes marketing costs.

Read the Full Article

Debbie MacInnis is a professor of marketing, the president of the Association of Consumer Research, and the associate editor of MarketingProfs.com. She can be reached at djm@MarketingProfs.com.