Brand Equity and the Sales Promo. connection

Brand Equity (Aaker) is a set of assets (liabilities) linked to a brand’s name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm’s customers.

Brand Equities get strengthened or eroded over time. Which of these happens depends on how the brand maintains and builds on its 'positioning space' over time. With the festival season fast approaching in India, premium brands are faced with a dilemma, which, if not managed in the right manner may erode their brand's equity. That dilemma is whether or not to run consumer oriented sales promos.

How can a brand decide on whether to join the promotion bandwagon or not? Simple. All it has do is to reevaluate the way its positioned itself. If it has occupied the premium space in the market based on the belief that its customers have built relationships with it over time due to their high involvement with the product category, then the brand must shun promotions. The error to avoid is an assumption that consumers are 'highly involved' with the product category. For e.g., take apparel; In India, if the brand intends to go after the niche consumer category, then the purchase involvement levels on the part of the target segment is high. On the other hand, if its the mass consumer the brand is after, it needs to recognise that 'involvement' levels are low and that the target segment is always on the hunt for a better bargain. In such a case, it does not make sense to position the brand as a premium one, instead the positioning must be driven by 'value for money' factors and therefore sales promos are a must during festival seasons.


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