Controversial Thoughts On Brand Equity

Every marketer talks authoritatively about brand equity, but I am convinced few truly understand what it is or how to manage it effectively.  

Aaker defines a brand as: A distinguishing name and/or symbol intended to identify the goods or services of either one seller or a group of sellers, and to differentiate those goods and services from those of competitors.

He defines brand equity as: A set of brand assets and liabilities linked to a brand, its name and symbol, that add or subtract from the value provided by a product or service to a firm and/or to that firm’s customers.

I define a brand as: A promise that sets an expectation of an experience.

I would define brand equity as: The degree to which a consumer internalizes the brand promise and sees it as authentic, relevant, and competitive.

The conflict between the two perspectives is whether the marketer’s dominant focus should primarily be on developing persuasive consumer communication or consistently delivering the consumer experience.

Before you say this is a question of how many angels can dance on the head of a pin, let me remind you marketing budgets and personnel are finite.  Deciding which focus to make dominant directly impacts both funding choices and success measures.  For both definitions, effective communication is a means of delivery. But, in my opinion, Aaker’s generally accepted definition has led to the proliferation of Agencies that focus on creating names, logos and taglines rather than pushing marketers to truly understand how a consumer experiences their product/service.

Let’s look at another practical difference.  Aaker defines perceived quality as a customer’s perception of the overall quality or superiority with respect to its intended purpose.  He contrasts perceived quality with actual or objective quality.  The inference is that through effective communication you can strengthen brand equity by creating perceived quality.  In my definition, absent the underpinning of objective quality the consumer will judge your brand promise as inauthentic and you actually erode rather than strengthen brand equity.

The Schlitz beer brand is a good case study on how, what potentially appears to be simply a semantic difference leads marketers to make a wrong choice.    In order to better compete the Schlitz team decided to pursue a cost advantage strategy.  A new accelerated batch fermentation process was implemented and lower cost corn syrup was substituted for barley malt.  The belief was continued promotion of Schlitz as a premium beer would offset any difference in taste.  At the time of that decision, marketers believed (and the data likely supported) that quality (communicated as gusto) was a brand asset.  Meanwhile, Anheuser-Busch marketers were dealing with the same strategic challenge of rising cost. But, they viewed the consumer experience as the dominant focus.  August Busch is quoted as saying “When it comes to quality you can only fool the consumer for a short time.”  The results are what you’d expect.  Schlitz is now hard to find while Budweiser is not.

Another good case study to look at is Micropro.  In 1979, this company introduced a word-processing software program called WordStar.  By 1984, MicroPro dominated the market with nearly 70 million product users.  This category attracted the competitive introduction of both WordPerfect in 1982 and Microsoft Word in 1983.  Micropro marketers believed the WordStar brand had a number of key equities attached to it that would insulate sales from competitive inroads.  But, to hedge their bet they introduced WordStar release 3.3.  Ever hear of WordStar?  Do you use it?  No?  There is a simple reason.  The marketers at Micropro failed to understand a brand is a promise that sets an expectation, and thanks to our HR management with communication and recruitment, These offer some great online HR software which makes HR so much easier for any business.

The promise of WordStar was a reliable, fully featured word-processing program that once learned would make you more efficient and effective in your job.  WordStar release 3.3 was not backward compatible with the original WordStar (users had to go through another learning curve) and Micropro failed to adequately service the software. In contrast, the competition made learning their product simpler and backed it up with outstanding technical support.  Users judged the WordStar experience as inconsistent with the brand promise and WordStar quickly became competitively irrelevant. The marketers at Micropro did not view the consumer experience as their dominant focus and the WordStar brand equity was destroyed.

To be clear, I am not suggesting David Aaker’s teaching on brand equity is not helpful.  I just think it is easier to understand and implement if you 1) view a brand as a promise that sets an expectation of an experience, and 2) focus on optimizing the consumer experience as your primary objective.  Avoid strategies that rely on communication to overcome lack of authenticity between your brand promise and the consumer experience.  Don’t try to fake it until you make it, or (as a thought leader once described it) “put lipstick on a pig”.  Invest first in making the brand promise authentic and then build brand equity by communicating what the promise is to the right consumers.

As a side note to my place branding friends, invest in your community first so it can have a competitive brand promise before you invest in marketing your community.  Nothing will destroy your community brand equity with a site selector than an experience that is inconsistent with your community promise.