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How Can Spotify Build Brand Equity When Music is Free?

Spotify can build brand equity as effectively as Zara, and similar brands, despite the fact that its basic offering is free and intangible in comparison. It does so because, in comparison to Zara (1) it still has the ability to develop strong brand salience, (2) it can demonstrate brand meaning through performance and imagery, and (3) is extremely effective at developing brand resonance through community engagement.



Can Spotify Build Brand Identity as Effectively as Zara?
Spotify is in a position to develop brand salience (brand awareness) because it can clearly describe what service category the brand competes in, and can ensure customers know which of their needs the brand is designed to satisfy (Keller, 2001). When compared to Zara, although both operate in different industries and provide for different needs, both are in a position to influence the likelihood they will form part of a customer’s usage consideration set, which is an important function of brand salience. Spotify clearly does this for me because it satisfies my need for a convenient storage provider of music.


Is Brand Meaning as Applicable to Spotify as it is to Zara? 
While Spotify’s basic offering of music is free through a variety of different platforms (Youtube, Soundcloud, etc), Spotify provides value by conveniently consolidating this free offering so that it can be enjoyed more readily. Just like Zara can create brand meaning, Spotify can too through both the performance of how they satisfy this functional need, and the imagery associated with the extrinsic properties of this service. For me, Spotify can demonstrate performance by reliably storing and playing my music, and by suggesting enjoyable new music to me based on my prior listening. Spotify’s service value can also contribute to brand imagery in its application to different usage situations.

How Spotify have Mastered Consumer Loyalty and Community Engagement
I believe that Spotify can build CBBE as effectively as Zara because it demonstrates a strong consumer brand resonance. As I explained above, Spotify’s value is not the basic offering itself, but in how it is provided to customers and their engagement with it. Spotify is therefore more suited to develop brand relationships than Zara. By providing a convenient way to enjoy music Spotify can develop behavioural loyalty, as all consumption of music becomes linked with usage of Spotify. Additionally, the integration of Spotify with social media creates a sense of community, allowing consumers to develop kinship and association with other users of Spotify (Keller, 2001).


Conclusion
Spotify is capable of building CBBE just as effectively as Zara despite the freedom of its basic offering. In fact, they might be more effective at building CBBE than Zara as their value is derived from customer interaction rather than the inherent value of their basic offering. While Zara provides value through their clothes, Spotify provides value through how customers use, discover, and share music. This suggests that the effectiveness of building CBBE is not dependent on whether the basic offering is free or paid, but on whether a brand provides value through a service or product effective at attracting the qualities of CBBE. 


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