Advertising and Brand Equity

Tulembayev Alizhan

PhD, Business Coach, Consultant

Marketing Director of GRATA Training

To understand the relationships between advertising and brand equity, it pays to first understand just what we mean by a ‘brand.’ Yet in the etymology of the word, this idea of branding as a “permanent mark deliberately made with hot iron” now takes second place to “goods of particular name or trade mark” [1].

But does this really describe what we understand as a brand? The American Marketing Association describes a brand as a “name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and differentiate them from those of competitors.” The AMA definition reminds us of the reason for a brand: to enable a person to identify one alternative from a competitor. All of this is true, but a brand must be a label in the true sense of that word: something “attached to an object to give information about it” [1]. But how is that information communicated?

When we think of brands, we usually think of products we buy: Coke, Carlsberg, Efes, Ford, Persil, and Mars. But just about anything can be ‘branded.’ Products, services, corporations, retail stores, cities, organizations, even individuals can be seen as ‘brands.’ Remember, a brand name is meant to embody information about something, information that represents an added value, differentiating it in a marked way from alternatives. A brand name is meant to trigger in memory positive associations with that brand [2]. Politicians, hospitals, entertainers, football clubs, corporations, all want their name, their brand, to mean something very specific to their market. It is how they wish to be seen, and how they wish to be distinguished from competitive alternatives.

A brand does provide information. A brand name represents everything a person knows about a particular product and what it means to them. It provides a convenient summary of their feelings, knowledge and experience with the brand. It means they do not need to spend a great deal of time ‘researching’ a product each time they are considering a purchase. A person’s evaluation of a product is immediately reconstructed from memory, cued by the brand name. The effect of a positive brand attitude leads to something marketers call brand equity. Most marketers would agree that it is that ‘something’ attached to a brand that adds value over and above the objective characteristics of the product or service. Whatever that ‘something’ is, it is embodied in people’s attitudes towards that brand. It is dynamic, and subject to change over time [3].

Brand equity is a result of brand attitude, and this is what provides the key to its understanding. In many ways, building and ensuring a continuing positive brand attitude is what strategic brand management is all about, because it does lead to strong brand equity. The most important thing to understand when you are trying to measure brand equity is that what is needed is a measure of understanding, not a measure of the results or consequences of a brand’s equity. Too often, when people ‘measure’ brand equity, they are really only tracking summary measures of what is going on in the market as a result of the brand’s equity. What is needed is a measure of the components that lead to brand equity, and this means measures of how the market forms current attitudes towards the brand [4]. If we are to really understand a brand’s equity, we must understand how it is constructed. It is this understanding that ensures an effective positioning in our marketing communications, and the ability to adjust that positioning over time as needed to continue building and sustaining positive brand equity. We measure brand attitude using an Expectancy-Value model (considered by most researchers in consumer behavior to be the best model of attitude).

Basically, this model states that a person’s attitude towards something, a brand or product in our case, is the sum of everything they know about it weighted by how important those beliefs are to them. Obviously, we are not able to study ‘everything’ about a brand or product, but we can and should consider everything critical to the benefit positioning of the brand. If we are to understand the current equity of a brand, it is necessary to ‘deconstruct’ its positioning in order to access the strengths and weaknesses of the belief structure that sustains people’s attitudes towards it.

It should now be clear that to a large extent a brand is not a tangible thing at all, but rather the sum of what someone knows, thinks, and feels about a particular product. In a very real sense, brands only exist in the minds of consumers, but that does not make them any less real. And to a very real extent, brands and the equity attached to them exist as a result of marketing communication, and especially advertising. It is advertising (when successful) that positions a brand in the consumer’s mind, nurtures salience, and builds positive brand attitude that leads to a strong brand equity.

List of used literature:

1. Oxford English Dictionary, 1990

2. Tulembayeva A.N. Marketing: Uchebnik. – Almaty. MAB, 2014. -524s.

3. Carl Eric Linn The Role of the Brand; Brand News Newsletter, volume 1 number 1 winter 1997, page3.

4. Ries A., Trout J. Marketing warfare. – London.: McGraw-Hill, 2006.