This story begins to indicate how brands work, and why the brand has become such a central concept in marketing. The brand name, or mark, is at its simplest a badge of origin. In most societies this identification is protected by trademark law. The buyers of goods or services develop associations with the mark which help them make their purchase decisions. Some brands will be associated with consistent quality, some less so. They may be associated with specific performance benefits, cleaning power or good taste. A brand thus offers reassurance, which not only helps the buyer make a safe decision, but actually adds value by creating good feelings of security and anticipation. Without brands, every purchase would be a gamble.
The paper reviews three distinct meanings of the expression 'Brand Equity': financial valuation of a brand, a consumer measure of 'brand strength', or a description of a brand's associations and attributes. These are separate concepts and the relationship between them is not simple. Various approaches to measuring consumer 'brand strength' are reviewed. A number of different performance measures can be used to evaluate and manage a brand but attempts to reduce these to a single number are artificial. The expression 'brand equity' is confusing and could be dispensed with.
The paper criticises the widespread speculation following "Marlboro Friday" in 1993 that consumers have turned against brands and are increasingly motivated by price alone. Retailer power is a real phenomenon, but many of the other claims made about the "nineties consumer" are at best speculative. What did happen in the eighties, however, was that too many brand owners behaved as if a brand name alone could guarantee continuous success and endless price rises. But a successful brand has to keep its promises, and consumers are not so easily deceived. Brands will survive because they offer important levels of reassurance and meaning to consumers. This will remain TRUE despite the changes taking place in the market. Successful brands need a sense of vision and purpose to direct their relationship with the consumer. The paper describes a framework for defining brand identity called Brand Foundations, developed and used within DDB Needham.
Historically the short term sales response to advertising has been the easiest to measure, giving rise to a mistaken belief that long term effects do not exist. As this became an issue in the ERA Advertising Effectiveness Awards, a new category was created for "longer and broader effects of advertising. The resulting entries give an encouraging demonstration of long term effects and how they can be shown to exist.