Are there bounds on brand equity?

Date of publication: June 15, 1992

Abstract:

Marketers have long sought to understand and benefit from the nebulous process by which consumers characterise and differentiate brands. The overall value of such differentiation applied to the choice process has come to be known as Brand Equity. Whilst this is important from the perspective of brand positioning, it does not address the much more fundamental question of how effective that positioning is in bonding users to the brand. This paper addresses this problem in various ways: -It develops a measure of closeness between the user and the product based on the proportion of those who define it as their main brand and who also regard themselves as very discriminating in deciding which brand of the category that they choose. This is called Brand Bonding. - It analyses the level of Brand Bonding for seventy-one products and brands in nineteen fast moving consumer goods categories. - It verifies that users distinguish between objective and perceptual product differences in product choice and it demonstrates that the main way people differentiate between products is through subjective characteristics. - It enables understanding of the proportion of a brand's users who are truly brand loyal (bonded) and the proportion who are simply "me-too" users, selecting it merely because it is widely accepted and available. -It highlights the high proportion of un-bonded main brand users and shows how individual brands are weak or strong and in particular, an understanding of the fundamental weakness of House Brands.

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