As a simple rule of thumb one can consider brand equity as a result of brand integrity over time.
That is to say, as a brand consistently generates the right ideas in the mind of the consumer by producing consistently good product over time, it creates for itself brand equity.
In a complex global market - place, brands help consumers to know which products to buy and which products to avoid. The need for this has become increasingly necessary in the last few years, as unscrupulous manufacturers have sought to abuse consumers in order to make profit. We are now increasingly aware of many of these abuses and seek protection.
Examples of these abuses appear to be consistently found in China where melamine has been used to dilute wheat flour, poorly manufactured medicines have led to patient deaths and cadmium has been used in toy manufacture. This combined with recurrently reported abuse of employees and the use of child labour, means that many consumers now look for safeguards.
China's inability to control food contamination has now caused the FDA to take action. Food contamination is, of course, not a solely Chinese phenomenon - although the country seems to be doing an unimpressive job at the moment in order to generate its high level of growth.
In Germany the current environmental trend for buying local goods at farmers' markets was recently put under the microscope. Tests have shown that those products from supermarkets contained much lower pesticide residues than similar products offered at farmers markets. It seems that the big supermarkets have the finances to be more thorough when testing produce and are doing a better job of monitoring pesticide residue than the more 'natural' alternative at monitoring pesticide residue.
Over a hundred years of struggle for the protection of employees in the west are is being challenged as sub-contractors, in an attempt to make profit, fl ou aun t laws and legally - binding agreements. The single market economy appears not to function as well as we might hope:, price as the key driver for demand appears to be causing some major problems.
We all know that big brands often have their products made by sub-contractors, and health scandals, such as the recent Mattel toy recall, continue to hit the headlines. Mattel's toys were found to contain elevated levels of lead, chromium and cadmium. The manufacturer company, in what appears to be an attempt to salvage relationships with its suppliers, announced that it was to blame through design faults. The implied message that sub-contractors are so powerful that they cannot be criticised is very frightening. Importantly, the news stories meant parents could quickly grab toys from children and prevent any further contamination.
Were the market full of non-branded goods we would be in a far worse position. Imagine the position parents would be in if goods were not branded. Product recalls would be nigh on impossible.
Brands also assist consumers in ethical and environmental shopping. This is made easier when one knows which brands are cynically allowing the abuse of employees or the environment and, again, news stories and consumer websites continue to inform the consumer.
The consumer's primary concern is their his or her well - being but ethical and environmental factors also play a part in purchase decisions. The smart brand polices its manufacturers so that no shock stories exist to be uncovered.
