Creators of Equity

John A. Hallward
IPOS-ASI (Canada)

It is generally accepted that a brand name (+ logo, artwork, package, and so on) offers recognition to an otherwise nameless product or service. In turn, this recognition triggers an 'association of characteristics' which imparts a positive or negative disposition for the product/service. For the company owning this brand, these (hopefully positive) associations towards the brand represents 'financial goodwill'. However, to the consumer, financial goodwill means very little. For consumers, the brand represents a 'promise', reasons-to-buy, an informed decision, and reduced risk.

We typically refer to these attitudes as brand equity, but it doesn't particularly matter what the definition is. The important practical issue for a Brand Manager is how does one measure or quantify this consumer empathy so it can be managed. And how does one create, enhance, and build more of this empathy? Before addressing the question, it is important to confirm that 'brand equity' does indeed provide better competitive performance.