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One of the challenges in managing brands is the many changes that occur in the marketing environment. The marketing environment evolves and changes, often in very significant ways. Shifts in consumer behavior, competitive strategies, government regulations, and other aspects of the marketing environment can profoundly affect the fortunes of a brand. Besides these external forces, the firm itself may engage in a variety of activities and changes in strategic focus or direction that may necessitate adjustments in the way that its brands are being marketed. Consequently, effective brand management requires proactive strategies designed to at least maintain-if not actually enhance-brand equity in the face of these different forces.
The customer-based brand equity framework, developed by the author, defines customer-based brand equity as the differential effect that consumer knowledge about a brand has on the customer's response to marketing activity. Positive customer-based brand equity results when consumers respond more favorably to a product, price, or communication when the brand is identified than when it is not. According to this framework, consumer brand knowledge can be characterized in terms of brand awareness and brand image dimensions. Sources of brand equity occur when consumers are aware of the brand and hold strong, favorable, and unique brand associations. There are a number of ways to create those knowledge structures in the minds of consumers. Broadly, they involve choosing brand elements, developing supporting marketing programs, and creating secondary associations.
One direct implication of this view of brand equity is that effective brand management requires taking a long-term view of marketing decisions. Any action that a firm takes as part of its marketing program has the potential to change consumer knowledge about the brand in terms of some aspect of brand awareness or brand image. These changes in consumer brand knowledge will also have an indirect effect on the success of future marketing activities. Thus, from the perspective of customer-based brand equity, it is important when making marketing decisions to consider how the changes in brand awareness and image that could result from those decisions may help or hurt subsequent marketing decisions. For example, the frequent use of sales promotions involving temporary price decreases may create or strengthen a "discount" association to the brand, with potentially adverse implications on customer loyalty...