Building brand equity: What matters most?

I’ve always loved iPhone when it comes to mobile phones. But I did try to change to Samsung in 2015 when its Galaxy S6 Edge was out. It was obviously a few hundred buck cheaper than an iPhone 6; its camera was said to be way cooler than the iPhone’s. So, I thought “Maybe I should get one for myself and save some money”. I did.

But after almost 1.5 years, I couldn’t handle its steadily slow performance. It actually performed great during the first six months and I was excited about it. But then it got slower and slower that, at some point, it got stuck, and I got mad. So, I bought a one-way ticket to iPhone, never thinking of trying Samsung again. At least for now. Plus, with the global incident of its Galaxy Note 7, I’m just scared.

Samsung got me by offering a competitive price, but lost me by its S6 Edge’s poor performance.

My experience can be explained when reflecting on what Kenneth Roman and Jane Maas say in their book on “How to advertise”. They point out, among a bunch of reasons why brands fail, that it won’t work to use price as a strategy.

“There’s always someone who will sell cheap. Sooner or later, people buy quality,” they write. “Products must provide consumer value – a combination of price and quality.”

Yes, quality product. It’s the quality that matters to the brand.

John Murphy, a contributing author to a book called “Brands: the new wealth creators”, argues that brand is a credible guarantee for its product or service quality that consumers use. It adds value, and that added value that a brand gives to a product, he explains, is “brand equity”.

Product quality and brand equity then go hand in hand. A poor quality product gives a brand a bad name. A bad brand name is often perceived of as having a poor quality product.

However, numerous scholars who study brand equity argue that many elements of marketing mix, not just quality, can affect brand equity either positively or negatively.

Keller (2001) says that the price of a brand tells something about the quality or benefits of a product. Usually, it creates associations in the mind of consumers: high-priced brands generally tend to be considered as having high-quality products.

Insofar as promotion is concerned, Boulding and colleagues (1994) say it’s a double-edged sword. Promotion can add or steal a brand’s equity. According to them, while advertising often creates brand equity, sales promotion does the opposite.

In terms of distribution, Aaker (1996) reasons it can generate substantial brand equity when consumers can locate a product in several stores or places. It creates convenience in customers.

For the service sector, external brand communications and services are two powerful sources of influence. Berry (2000) points out that word-of-mouth and publicity about the company and customers’ experience about the services provided by that company can influence how customers form their opinion about the company’s brand meaning.

Although there appears to be a host of sources that can influence brand equity, I still strongly believe and argue, based on my own experience, that product quality remains the heart and soul of brand equity. Having said that, I open myself to learning from research in the field to inform my experience.

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