Why are brands are essential?

Introduction :

Today the brand is a expression which we always hear, it offers one important place inside our societies. However, few people could explain really what's the brand. This difficulty shows that the brand is a complicated word, sending back in notion highly varied like the psychology, the sociology, the finance, etc.

As respect the marketing aspect, we often have a tendency to confuse product and brand. Whereas the brand bases itself more particularly on (the image, the sensibility, a quest).

We can ask ourself, exactly what is a brand?

In a very definition, Georges Lewi, eminent specialist of the brand says that it is the name and the band of the signs of something, a service, a company which have for vocation to impose by their popularity, market talk about, added value on a precise market portion.

Increasingly more, the brands took worth focusing on in the management, and more especially in the marketing. We noticed that the brand isn't just a factories, products, but also the brand experienced a physical value, mental value and especially financial. The way of measuring this value called the collateral brand. The foremost is the financiers who show an attention on this notion of brand collateral in the 80s. We observed that Perrier have been buy by Nestl for 2, 4 billion euro, Coca-Cola acquired offered 800 million euro for the acquisition of Orangina that was worthy of for only 200 million euro, or sold Buitoni 35 times its gains.

From then on, we cannot deny the importance of the brand collateral, and the brand in generally, indeed it allows to create a trustworthiness at the consumers, at the investors, and all the company.

In this essay we discuss brand collateral. In an initial time we see that the brand equity has been a attention subject matter by the academics and practitioner. And directly after we are going to try to find the most brand equity model in conditions of understanding consumer brand perceptions.

2-brand collateral interest

More of $50 million, it's the sizeable costs of producing a brandname into a consumer market. It is a considerable investment and like the majority of investments provides no warrant of success. The tough economy focussed marketing managers on cost-saving practices to increase competitiveness. One of the main results was to make brand extensions more compelling. Leveraging the brand equity of an effective brand claims to make launch of a fresh entry less expensive by trading on an established name.

Since the first 1990s, The concept of brand equity has been the main topic of lots of studies academics practitioners and academics mostly due to the importance in today's maintaining, marketplace of creating and using brands to obtain strategic advantage. The brand equity has been detailed frequently as the worthiness a brand name adds to a product and this idea refers to the essential idea that a product's value to consumers, the organization and the trade is somehow enhanced when it's associated or identified as time passes with a set of unique elements that define the brand idea. Distinctly, such brand collateral endowments result from current or potential consumer learning which influences the way the product is encoded and behaved upon by consumers. It stands to reason that such learning is active and influences consumer choice operations and final results either directly or indirectly by influencing the potency of the top quality product's marketing combination elements.

This increasing interest noticed both in the books and in the practice for the idea of leading capital is in the beginning aroused for supervisor reasons. Indeed the professionals to face up to less and less secure request in markets, a more and more strong and international competition, faster and faster scientific changes and increasingly more powerful distributors today. In these conditions of a turbulent market, a choice is composed in abandoning the marketing and commercial shares on the short-term income and in implementing a vision longer term predicated on the building of powerful brands that is a strong leading capital (Czellar and Denis, 2002). Another reason has also contributed to this interest for the brand collateral. Kapferer see in 1998 that the mergers and acquisitions of companies which occurred over the last years, has mix up the condition of the financial evaluation of the worthiness of property of the organization in generally and the property of the brands specifically. Two levels of research of brand equity are possible: the study of brand equity as value for the consumers " customer-based collateral brand " or as financial value for businesses " firm-based equity brand ". The concept of brand collateral have been different definitions in the literature. Aaker defined in 1991 the brand equity as a set of brand property and liabilities associated with a brand, its name and image, that increase or subtract from the worthiness provided by something or service to a firm, or to the firm's customers. In 1993 Keller proposed a cognitive psychology perspective, distinctive customer-based brand equity as the differential result that brand knowledge has on consumer respond to the marketing of this brand. In 1998 Erdem and Swait, dopting an information economics view, they claim that consumer-based brand equity is the worthiness of the brand as a credible indication of any product's position. More generally, Farquhar (1989) observe that the brand collateral is also known as the added value to the company, the trade, or the consumer with which a brand endows a product, or furthermore, as the difference between the value of the merchandise without that branding and the worthiness of the branded product to the buyer (McQueen, 1991). Finally the brand collateral has been subject matter attention because the many studies of consumer brand in different market show that successful brand extensions spent less on advertising than similar new name products. Considering the savings and against the expenses, brand expansion may seem just like a good alternative for a few firm.

This idea brand collateral is today again one point of discord between the academics and professionals. Therefore the brand equity will be always a subject studie.

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