Brand equity is the extra value-added attributes that accompany a brand. Sometim
ID: 1175107 • Letter: B
Question
Brand equity is the extra value-added attributes that accompany a brand. Sometimes without even realizing it, many consumers prefer specific brands merely because of the brand equity those brands carry. As marketers begin to realize what brand attributes are particularly attractive to consumer groups, those marketers can implement more specific targeting strategies toward identified market segments.
What companies (marketers) do you know that have multiple brands that carry their own specific equity? Share your thoughts on whether you think there is value, or are they cannibalizing a single market and wasting resources.
Explanation / Answer
This explanation of a company having multiple brands is based on the Indian Car Market.
Maruti Suzuki (“Maruti”) is the dominant player in the Indian Car Market with a market share of more than 50% and has auto cars at various price points and features. The affordable brands offered by Maruti caters to the middle class Indian and due to its strong legacy, robust service network carries a very strong brand equity.
Similarly it has cars in the higher end, which are marketed through its network called “NEXA”, which costs more than 1.5 million Indian currency and aims at the higher end of the Indian market and as a result, has takers from Indian consumers who are well off and belong to better economic conditions.
Since the target market is different for different products, there is no cannibalisation and in fact, consumers who have used Maruti Cars in the early stages of their life migrate to higher end Maruti Cars as they progress in their lives and become better off financially. The good experience in their first interaction with Maruti (through lower priced cars) makes them Maruti customers for life.