Brand Equity Shifting to Customer Equity

Yes, the renaissance of modern marketing led by kotler & porters has evolved brand as the single most powerful tool. Rightly, brand managers toil day & night to enhance their brand equity. But, over a period of time, brand managers are so obsessed, that they forget the main purpose of building the equity. Why is that some very powerful brands having excellent promotions & recall have to be shelved one day? One very confusing question these days is who is more valuable, your customers or your brands. The choice represents a strategic issue. If you answered brands, then you'll no doubt devote attention to increasing the value of your brands. You'll pay homage to such concepts as "brand equity," "brand image" and other buzzwords. You may even pay consultants who promise to refurbish your "brand architecture," defined by brand guru David Aaker as "that which organizes and structures a brand portfolio by specifying brand roles and the nature of relationships between them and their markets."

Unfortunately, that answer is wrong.

It could only be customers. We are so engrossed in porter’s 5 forces network model that we forget that it is the customers who give us profitability. Without customers, there can be no profitability, and without profitability, there is no business. By contrast, brands can have little relationship to the success or profitability of companies. Take for e.g. brands like Dabur, Amul which have exceptional brand recall, but how many times have you bought a Dabur product? or you wanted a Amul ice cream rather than Walls. One of the brands having very good recall is Wills lifestyle, but one day I struggled to find a single person wearing WLS among 300 people.

Not only Indian brands, but brands across the globe have suffered from the same problem. Consider "Sock Puppet," Commodore, Skytrain and other brands or brand images that have died, not for lack of great branding, but for the lack of customers. GM recently announced that Buick and Pontiac may follow Oldsmobile to the brand graveyard. So the question remains is all the brand babble skewed? Yes to a certain extent. That’s why increasing number of companies these days are emphasizing on giving due importance to customer- centricity & initiatives like CRM. This concept is not very new. HBR sept 2004 issue featured a path breaking article by Rust, Roland on “Customer-Centered Brand Management”. Economist issue April 02, 2005, entitled "Power at Last," illustrated how consumers now buy based on research and personal value, not on companies seek to "position" their products. That’s why I am not surprised these days on the famous quote by Larry Light, McDonald’s chief global marketing officer i.e. "Positioning" is dead. No doubt, this approach is only responsible for the turnaround of McDonald.