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Why are brands are important?

Paper Type: Free Essay Subject: Marketing
Wordcount: 1033 words Published: 11th May 2017

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Introduction :

Today the brand is a word which we always hear, it has one important place in our societies. However, few people could define really what is the brand. This difficulty shows that the brand is a complex word, sending back in notion highly varied such as the psychology, the sociology, the finance, etc.

As regards the marketing aspect, we often tend to confuse product and brand. Whereas the brand bases itself more particularly on (the image, the sensibility, a mission).

We can ask ourself, what is a brand?

In a definition, Georges Lewi, eminent specialist of the brand says that it’s the name and the group of the signs of a product, a service, a company that have for vocation to impose by their fame, market share, added value on a defined market segment.

More and more, the brands have taken of importance in the management, and more particularly in the marketing. We noticed that the brand is not only a factories, products, but also the brand had a physical value, emotional value and especially financial. The measure of this value called the equity brand. The first is the financiers who show an attention on this notion of brand equity in the 80s. We saw that Perrier had been buy by Nestlé for 2,4 billion euro, Coca-Cola had offered 800 million euro for the acquisition of Orangina which was worth for only 200 million euro, or sold Buitoni 35 times its profits.

From then on, we cannot deny the importance of the brand equity, and the brand in generally, indeed it allows to build a credibility at the consumers, at the investors, and all the company.

In this essay we talk about brand equity. In a first time we see that the brand equity has been a attention topic by the academic and practitioner. And after we are going to try to find the most brand equity model in terms of understanding consumer brand perceptions.

2-brand equity interest

More of $50 million, it is the considerable costs of introducing a brand into a consumer market. It is a considerable investment and like most investments carries no guarantee of success. The recession focussed marketing managers on cost-saving tactics to increase competitiveness. One of the most important effects was to make brand extensions more compelling. Leveraging the brand equity of a successful brand promises to make introduction of a new entry less costly by trading on an established name.

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Since the early 1990s, The concept of brand equity has been the subject of a number of studies academics practitioners and academics primarily due to the importance in today’s maintaining, marketplace of building and using brands to obtain strategic advantage. The brand equity has been described frequently as the value a brand name adds to a product and this concept refers to the basic idea that a product’s value to consumers, the firm and the trade is somehow enhanced when it is associated or identified over time with a set of unique elements that define the brand concept. Distinctly, such brand equity endowments come from current or potential consumer learning which influences how the product is encoded and behaved upon by consumers. It stands to reason that such learning is dynamic and influences consumer choice processes and outcomes either directly or indirectly by influencing the effectiveness of the branded product’s marketing mix elements.

This increasing interest observed both in the literature and in the practice for the notion of leading capital is initially aroused for manager reasons. Indeed the managers to face up to a less and less stable request in markets, a more and more intense and international competition, faster and faster technological changes and more and more powerful distributors today. In these conditions of a turbulent market, an option consists in abandoning the marketing and commercial shares on the short-term profits and in adopting a vision longer term based on the construction of powerful brands that is a strong leading capital (Czellar and Denis, 2002). Another reason has also contributed to this interest for the brand equity. Kapferer see in 1998 that the mergers and acquisitions of companies which occurred during the last years, has stir up the problem of the financial evaluation of the value of assets of the firm in generally and the assets of the brands in particular.Two levels of analysis of brand equity are possible: the study of brand equity as value for the consumers ” customer-based equity brand ” or as financial value for firms ” firm-based equity brand “. The concept of brand equity have been different definitions in the literature. Aaker defined in 1991 the brand equity as a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm ,or to the firm’s customers. In 1993 Keller proposed a cognitive psychology perspective, distinctive customer-based brand equity as the differential effect that brand knowledge has on consumer response to the marketing of that brand. In 1998 Erdem and Swait, dopting an information economics view, they argue that consumer-based brand equity is the value of a brand as a credible signal of a product’s position. More generally, Farquhar (1989) see that the brand equity is often referred to as the added value to the firm, the trade, or the consumer with which a brand endows a product, or likewise, as the difference between the value of the product without that branding and the value of the branded product to the consumer (McQueen, 1991). Finally the brand equity has been subject attention because the many studies of consumer brand in different market show that successful brand extensions spent less on advertising than comparable new name products. Considering the savings and against the costs, brand extension may seem like a good alternative for some firm.

This concept brand equity is today again one point of discord between the academics and practitioners. So the brand equity will be always a topic studie.


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