Brand equity how to grow without diluting the brand equity
- This is a preview of the essay.
To view the full text you must login!
This is a question, every manager in brand management has to answer at a point of time in his career. It is specifically a difficult problem to solve in case of premium brands. Generally, one easy answer is to take the brand name in a new growing market. But then three major issues are to be considered : cannibalization ,dilution in equity in the existing brand name, and fit between the orignal corporate culture and a bigger business.
Concerning cannibalization, it is the risk that existing consumers swithch to lower-cost alternative. In case of premium brands, it is however unlikely , if the original premium brand fulfill a strong emotional need to consumers. This need will be not satisfyied by a cheaper product of the same brand because the premiumness of the brand would have desappear. However, the risk is very strong for commodity brands, where the functionnal aspect is the key factor of purchase? Reducing consumer price is a direct cause of dilution in brand equity , with the direct effect that core users or adorers of the brand may start to leave the brand, becaus ethey feel, in a sort, betrayed. For example, when a brand is positionned to be enjoyed by the priviledged few, a large-scale expansion in a broader market will take the brand name out of the exclusive area...