Why sales might decrease but brand equity does not
In the second article exploring the relationship between brand equity and sales, we look at why sales volumes might go down while brand equity stays flat or increases, and what brands can do about it.
In an earlier article, we identified that “repeat purchase” and “advertising retention” are an important part of understanding the long-term effects of advertising. We showed that quantifying long-term results is tricky for several reasons, but most importantly comes down to a limited understanding of brand equity and its relationship to sales. We zoomed in on our first scenario, where sales are increasing and brand equity declining, and outlined possible reasons and solutions.
In this article, we investigate the scenario where sales are decreasing, and brand equity is increasing or flat. There are two possible reasons for this (outside of a seasonal decline in brand and category sales.)