A consumer always wants to be in style irrespective of the stature he/she enjoys in the society. This leads to a stage where consumer's tastes and preferences change very often and are governed by fashion and style.
To cater to such segment of the market, companies have to come up with products with short PLC. For example - mobile phones, clothings and accessories.

Brand Equity

According to Philip Kotler, Brand Equity is defined as the added value endowed to products and services.

The company develops brand equity, however, it is shaped by consumer's perception of the product, which in turn is governed by factors like brand awareness / knowledge. Hence, it becomes vital and challenging for the company to ensure the development of right kind of brand awareness and knowledge of the product and services.

Advantages of brand equity as given by Kotler are as follows: -

1. Improved perceptions of product performance

2. Greater loyalty, due to which consumers can pay 20-25% more for the product

3. Less vulnerability to competitive marketing actions

4. Less vulnerability to marketing crises

5. Larger margins

6. More inelastic consumer response to price increases

7. More elastic consumer response to price decreases

8. Greater trade cooperation and support

9. Increased marketing communications effectiveness

10. Possible licensing opportunities

11. Additional brand extension opportunities

Case Study on Nokia

Life Cycle of Mobile Phones

The life cycle of mobile commences with Material Extraction. A mobile phone is made up of 40% metal, 40% plastic and 20% ceramics and trace materials. Material Processing then follows material extraction.

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* Contributed by: -
Saikat Dey & Madhulika Verma,
ICFAI Business School, Gurgaon.