■ Creating brand equity
The overall aim of branding decisions is to create an identity for the prod-
uct or service that is distinctive and also in line with the targeting and
positioning decisions already taken. Organisations should strive to pro-
duce a brand equity that delivers value to the consumer. This will result in
either the customer showing greater brand loyalty or being willing to pay
a premium price for the product. Brand equity according to Aaker is ‘a set
of assets and liabilities linked to a brand’s name and symbol that add to or
subtract from the value provided by a product or service to a firm and/or
that firm’s customers’ (Aaker, 1991).
Brands that contain high equity have strong name awareness, strong
associations attached to the brand, a perception of quality and have high
levels of brand loyalty (see Figure 9.9). To create a brand that exhibits
these characteristics takes time and investment. For instance of the top 50
UK grocery brands, four have their origin’s in the 1800s; 16 from the period
1900 to 1950; 21 between 1951 and 1975 and only 9 have been introduced to
market in the years since 1975 (Hooley et al., 1998). Once established, how-
ever, a successful brand will become a valuable asset to an organisation in
its own right.
■ Brand valuation
There has been a trend in recent years for companies to try and turn the
general concept of brand equity into giving these organisational assets a
specific financial valuation and to account for them on their company
Targeting, positioning and brand strategy 195Illustrative Example 9.3
Saga
Saga produces a wide range of products, including magazines, radio programmes, financial
and travel services for its estimated 6.5 million customer base of over 50s. In 2005 the company
was bought in a management buyout for £1.35 billion. However, the over 50s market is chan-
ging and that has implications for the Saga brand. Recent surveys have revealed that a new over
50s market is emerging, one that has been termed the ‘middle youth’ market. Sainsbury Bank
undertook a survey of individuals in their 50s, 60s and 70s and found many had the mindset of
people in their 40s. Another GreyPower survey undertaken by Millennium, an agency that spe-
cialises in the mature market, found that 75 per cent of consumers in their 50s and 60s would
not consider taking a Saga holiday. In fact 40 per cent of those in their 60s, 70s and 80s thought
the brand would be more suitable for people older than themselves. Saga now finds itself being
challenged for the over 50s market by brands such as Secondlifestyle, which position them-
selves on the association of being for the active and young in customer’s mind.