Equity or Differentiation, which manifests the other? Attending any brand planning meeting or contributing to any such discussion, one always has to justify the importance of the brand’s equity and the strategies to be applied, to attain that equity. But what is brand equity to the man on the street? Is it truly an overarching driving force when it comes to purchase decisions?

Today consumers are spoilt for choice across every product category that they consume. How does any brand get through to this over consumed consumer? Firstly, we need to stop referring to the consumer as such. He/she is now a discerning shopper who does not want to be coerced into a decision. In fact he/she expects the brand to treat him/her in a special way i.e. talk to me, fulfill my needs, make me want you…. are some of today’s key decision influencers that drive purchase.

Brand Equity as defined in most marketing journals is: The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. Companies can create brand equity for their products by making them memorable, easily recognizable and superior in quality and reliability. Mass marketing campaigns can also help to create brand equity.

Well….based on the above, I would think it is Brand differentiation that actually creates that need and entices today’s shopper. If the brand has created that differentiation in the shoppers mind, it has won a big battle. Just by measuring KPI’s that supposedly drive equity, such as Brand/Ad awareness be it Top of Mind, Spontaneous, Prompted or Usage Behavior based on most recent usage, does not provide a complete measure of equity. It lacks the pizazz of differentiation i.e. the brand may score in the high 70s or 80s on the above common KPI’s but when it comes to being differentiated i.e. being missed if it were to be gone, it scores a 5. That my fellow marketers, is a big blow for the brand custodians.

Kevin Lane Keller (E.B. Osborn Professor of Marketing at the Amus Tuck School of Business, Dartmouth College), talks about building customer based brand equity. The biggest merit to this model is that, not only does it force us marketers to think constructively in building the model for our brands, but it also forces us to measure and manage that build going forward.

We all talk about the customer being in the driving seat. That being true, we as marketers need to continue to navigate that driver by making the journey more relevant to him/her. Differentiation drives choice, which in turn drives sales and therefore that much coveted brand equity that organizations yearn for.

According to Kevin Lane Keller there are 4 fundamental steps that consumers invariably ask about brands:
1.   Who are you? Brand Identity
2.   What are you? Brand Meaning
3.   What do I think or feel about you? Brand Responses
4.   What kind of association and how much of a connection would I like to have with you? Brand Relationships

Brands that truly focus on addressing the above for today’s discerning shopper, succeed in differentiating themselves and achieve that coveted resonance and affinity and a long lasting relationship with the consumer. Those who only focus on the glitz and glamor of KPI’s to measure success, are working only towards getting lost in the sea of mediocrity.