Conference Summary

Defining, Measuring, and Managing Brand Equity

Foreword

In recent years, there has been an increasing concern among marketing managers and general managers over the trend toward short-term financial management of their businesses. For many SBUs this trend has shifted marketing tactics toward those which can affect sales in the short run. The broad-based movement of marketing funds from advertising to trade and consumer promotion has been well documented and lamented loudly in the trade press. Whether or not managements like the evolution of "leaner," more short-term oriented corporations, they express a general concern that such a focus may have harmful long-term effects. The issue has come to be articulated in phrases such as "I'm worried about what we're doing to our brand equity."

The concept of brand equity has been used broadly for a long time, but there has been no precise definition of it—nor even common agreement on what it is. At MSI, we hypothesized that the concept of brand equity could be of significant use to management if it could be defined and measured and if some relationship of value to the company could be established.

With these thoughts in mind, MSI held an exploratory conference in March 1988 and invited marketing practitioners, interested marketing academics, some investment bankers, and financial professors. There was an enthusiastic consensus that the brand equity concept held promise and this was further reinforced by MSI members who elevated brand equity to the top of our list of research priorities for 1988-1990.

Since we know of no one else working on brand equity in quite the way we are approaching it, MSI has the opportunity to be a "center of learning" for the benefit of our members and eventually for the marketing community as a whole. And that, after all, is the core of MSI's own brand equity.

Conference Summary

This report summarizes the key points of a conference on Defining, Measuring, and Managing Brand Equity, jointly sponsored by the Marketing Science Institute and the University of Texas, Austin, Graduate School of Business and IC2 Institute. The purpose of the conference was to provide an integrated industry and academic perspective on the various aspects of brand equity. The concept of brand equity is important because it links financial, general, and marketing management concerns—in understanding how a brand can command margins and loyalty beyond that which usually obtains for the product or service offered. The organization of this report roughly follows the sequence of presentations given at the conference, with an important exception: The synthesis of brand equity issues by professors Allan Shocker and Barton Weitz, originally given at the conclusion of the conference, is presented here first so that readers can benefit from its broad perspective.

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