Wednesday, May 12, 2010

Risking Brand Equity?

I was asked an interesting question today by a marketing manager at a larger consumer products firm. She asked how she should respond to her boss, who was pushing for continued strong growth from a successful brand - growth which she felt might cause the brand to extend itself too far, and perhaps erode brand equity. It's a tough situation for any manager.

I think many firms conduct market research to see if a growth strategy will yield new customers as expected. At times, though, firms fail to see how existing loyal customers will react to growth strategies, brand extensions, etc. Thus, they fail to see how growth plans may compromise a brand's "credentials" with loyal, hard core consumers. So, this manager might commission a study to see how the firm's most loyal customers might feel about the company chasing new consumers and segments. Such a study might see that customer losses or price premium erosion might offset new customer gains to a large degree.

1 comment:

Anonymous said...

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