Brand Equity

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Introduction

Indomie is one famous brand of instant noodle in Indonesia is produced by PT. Indofood Sukses Makmur Tbk., The first time Indomie hits the market was on 1970, people doubted that selling instant noodle as one of the staple food in Indonesia, but the company proved the people’s judgements were wrong (www.indomie.com). Indomie accounted for approximately 37% of net sales and 39% of income from operations in 1999. The Company produces a wide range of instant noodle products with prices that cover the low-end, mid-range and high-end retail market segments in Indonesia. The Company owns the three major instant noodle brand names in Indonesia, Indomie, Sarimi and Supermi, which are leading household names and have been in existence for many years. In 1999, Indomie accounted for approximately 44% of the Company's instant noodle

sales, while Sarimi and Supermi accounted for approximately 28% and 18%, respectively, of the Company's instant noodle sales. The Company sold approximately 8 billion packs of instant noodles in 1999. While the Company sells most of its instant noodles domestically, a small percentage of instant noodles are exported to nearly 30 countries, including Saudi Arabia, Brunei, Nigeria, Australia, Hong Kong, the United State and certain European countries. In 1999, instant noodles accounted for net sales of approximately Rp.4, 315 billion and income from operations of Rp. 892 billion. (www.indofood.co.id/index_2.htm)

We were amazed on how big Indomie since 1999, even up until 2010 the instant noodle that produced by the Indofood group dominated the instant noodle market, it dominated about 70 percent of the market in Indonesia. with the biggest shares goes to Indomie with 40-50 percent and other 20-30 goes to Sarimi and Supermie altogether. In this case just Indomie itself most likely dominated about half of the instant noodle market in indonesia. According to Boediyanto from Republika Newspaper Tuesday (12-10-2010), in a year, it is estimated that Indonesian people consumed about 14 billion packages of indomie per year. 

Looking at how Indomie could consistently maintain its position as the market leader in Indonesia for several decades, had risen the curiosity of looking into more depth of the power of the brand.

Jacques R. Chevron (1998) said that a brand that is well known and trusted by the people is a priceless asset. Brand has several roles for companies, brand can make company reach the economy of scale by mass producing the product under the brand name, it also can halt other competitors that want to do the business under in the same industry.  in other word, a brand that is strong enough to reach the brand equity will automatically gain trust from buyer and reseller (A.shimp, 2003).

Since brands are the most valuable assets for the marketer has, it is important to have strong brand equity. Landor Associates’Antonio Marzza said, “A brand represents the most powerful link between the offer and consumer” (Kleppner, 2008), this statement become the reason for the importance of brand communication, since the essential aspect of communication is accountability and brand awareness could be one of the appropriate tools to evaluate and learn the brand performance.

Brand awareness refers to how aware customers and potential customers are of the brand and its product. In definition, brand awareness is a marketing concept that enables marketers to quantify levels and trends in consumer knowledge and awareness of the existence of the brand. Most advertising is directed to consumers whose preferences are already formed and who have experience with the advertised product. Keller (1993) suggests that part of the strength of brand equity is a result of brand associations being easily accessible in memory. While Aaker (1991) suggested that brand equity can be categorized in 5 categories, the categories for brand equity are as follow

1. brand awareness.
Shows the ability of the...
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