Ultimately, the power of a brand lies in the minds of consumers or customers, in what they have experienced and learned about the brand over time. Consumer knowledge is really at the heart of brand equity. This realization has important managerial implications. In an abstract sense, brand equity provides marketers with a strategic bridge from their past to their future. That is, all the dollars spent each year on marketing can be thought of not so much as expenses but as investments—investments in what consumers know, feel, recall, believe, and think about the brand.
And that knowledge dictates appropriate and inappropriate future directions for the brand—for it is consumers who will decide, based on their beliefs and attitudes about a given brand, where they think that brand should go and grant permission (or not) to any marketing tactic or program. If not properly designed and implemented, those expenditures may not be good investments—the right knowledge structures may not have been created in consumers’ minds—but they are investments nonetheless.
Besides that, ultimately, the value to marketers of brand equity as a concept depends on how they use it. Actually it is very useful. Brand equity can help marketers focus, giving them a way to interpret their past marketing performance and design their future marketing programs. Everything the company does can help enhance or detract from brand equity. Marketers who build strong brands have embraced the concept and use it to its fullest to clarify, implement, and communicate their marketing strategy.
