Brand equity must be carefully constructed. A firm foundation for brand equity requires that consumers have the proper depth and breadth of awareness and strong, favorable, and unique associations with the brand in their memory.
Too often, managers want to take shortcuts and bypass more basic branding considerations– such as achieving the necessary level of brand awareness–in favor of concentrating on flashier aspects of brand building related to image. (more…)
At its most basic level, a brand is made up of all the marketing elements that can be trademarked– logos, symbols, slogans, packaging, signage, and so on. Strong brands mix and match these elements to perform a number of brand-related functions, such as enhancing or reinforcing consumer awareness of the brand or its image and helping to protect the brand both competitively and legally.
Managers of the strongest brands also appreciate the specific roles that different marketing activities can play in building brand equity. They can, for example provide detailed product information. (more…)
The right blend of product quality, design, features, costs, and prices is very difficult to achieve but well worth the effort. Many managers are woefully unaware of how price can and should relate to what customers think of a product, and they therefore charge too little or too much.
For example, in implementing its value-pricing strategy for the Cascade automatic-dishwashing detergent brand, Procter & Gamble made a cost-cutting change in its formulation that had an adverse effect on the product’s performance under certain– albeit somewhat atypical– water conditions. Lever Brothers quickly countered, attacking Cascade’s core equity of producing “virtually spotless” dishes out of the dishwasher.
In response, P&G immediately returned to the brand’s old formulation. The lesson to P&G and others is that value pricing should not be adopted at the expense of essential brand-building activities. By contrast, with its well-known shift to an “everyday low pricing” (EDLP) strategy, Procter & Gamble did successfully align its prices with consumer perceptions of its products’ value while maintaining acceptable profit levels.
In fact, in the fiscal year after Procter & Gamble switched to EDLP (during which it also worked very hard to streamline operations and lower costs), the company reported its highest profit margins in 21 years. Achieving and conveying the right blend of product or service value can harness the extra power of your overall marketing performance.