Brand equity is the mantra for marketers in many companies. The term itself is often used to show the strength, the achievement or the value of a brand. A brand that is said to have high brand equity is often the market leader in a market.
All companies want to have a high brand equity. Unfortunately, in achieving it, companies often focus on the brand itself, while actually the focus should be on customers or consumers.
High brand equity is a reflection of favorable consumer knowledge of a brand relative to other brands fighting for the same customers. The terminology was born in the marketing discipline, which has talked about the importance of focusing on customers since the 1950s. Marketing concept and philosophy basically put customers in the center of any business organization's focus. Marketing is all about satisfying customers' needs and wants.
The term "brand equity" has emerged to emphasize the importance of a brand in marketing strategy. It directly places brand in the "positioning decision", an important part of a marketing strategy. According to the marketing theory, a positioning decision should only be made if the "segmentation and targeting decision" has been made. Together, segmentation, targeting and positioning are the cornerstones of a marketing strategy.
Segmentation basically represents an understanding of how consumers are better grouped based on similarities they have, while targeting represents the selection of market segments that will be served by a brand. So the placement of a brand in a positioning decision shows the direct link of the brand to its customers or target market.
Since brand equity represents the strength of a brand in the market, it can only come from a good match between the brand's positioning with customers' needs and wants. A strong brand is one that satisfies customers' needs and wants.
How to achieve a high brand equity? The answer is: The brand has to have an important meaning to customers, a meaning that is related to customers' needs and wants. For example, the brand Mont Blanc represents the meaning of premium quality, success and exclusiveness. So for customers who want to celebrate his or her achievements, this brand can represent a powerful symbol that satisfies this need. Another example is the Harley Davidson motorcycle brand. This brand signifies masculinity, ruggedness and adventure. So for those who enjoy adventure/outdoor/masculine activities, the use of the brand will become a manifestation of who they are.
As meaning can vary among different people, marketers have to make sure that different customers in one target market have a common understanding of the meaning of the brand, while realizing its importance to satisfy their needs. In other words, a large number of customers or potential customers that constitute a target market should have a relatively similar view of the brand.
Of course, in order that a broad customer base has a common perception of a brand, the customers should first be aware of the brand's existence. This is why raising brand awareness is an important step in achieving high brand equity. Customers should first be aware of brand, then understand what the brand stands for. The challenges in achieving high brand equity thus lie in how to manage the customers' awareness of the brand and its meanings.
Numerous books have been published that state the importance of managing the awareness and meaning of a brand in many different terms. However, the fundamentals of managing a brand can revolve around these two focuses: brand awareness and brand meaning. This may seem simple, but yet this is a never-ending process for everyone managing a brand. Brand awareness can increase and decrease due to changes in competitors' efforts and environment setting. Similarly, brand meaning can easily change as a result of the arrivals of new competitors or new efforts by old competitors.
The history of the Pocari Sweat brand in Indonesia can serve an example. For more than 10 years since 1990, this brand built and dominated a relatively small but growing market segment, namely the isotonic drink market segment. For years, in the minds of consumers, Pocari Sweat meant the isotonic drink. However, in the last four years, numerous brands entered this market segment with a similar claim of being an isotonic drink, often with additional benefits. Some still favor Pocari Sweat because it is the leading and pioneer brand. But, others simply see it as just one of the various isotonic drinks in Indonesia.
The above example illustrates the importance of continued efforts to track what is happening in consumers' minds. High brand equity can be achieved by navigating brand awareness and brand meaning in the sea of changes occurring in the market. Following how customers think and feel is the only way to get the ability to navigate the sea of changes. Brand equity can only be achieved, and maintained, through a strong focus on customers. A difficult task, but if conducted well, it will optimize the power of the brand in the marketplace.
