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There is a high pressure fromcorporate stakeholders and government for all types of companies to be moreattentive and responsive to their interests and needs. Meanwhile, to maximizeshareholder value by achieving highest profits is the primary goal of anypublicly-traded company. These opposing forces cause disagreement about valueof reputation.

Most people would definitely agree that managing brand equityand building a good reputation is vital to every company. On the other hand,supporters of Milton Friedman, the winner of Nobel Prizein Economics in 1976, claim that the sole purpose of a firm is to make money 1. The purpose of this article is toreview academic literature on the strategies of managing brand equity, inparticular on reputation. It refers to the public relations professionals andmarketers who take responsibility for reputation.  By focusing on brand equity and reputationmanagement, marketers can build real value for their organizations throughrelationships, trust and effective business model. From this perspective, a fewrecommendations for communication practitioners and marketers will be provided.

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Based on academic literature,arguments will be supported by two examples: the successful brand extension ofBentley’s spirit into the world of perfume and the sweet smell of failure ofHarley Davidson perfume. Nowadays there is a growing trend among carmanufacturers to experiment at creating brand extensions. This involves manybig auto company, for example, Porsche designs Kitchens, Mercedes-Benz creates Apartmentsand Volkswagen produces GTi Watch.

“There’sinstant brand-awareness and this makes them the perfect brands to expand intoother categories of products– as long as those products retain the perceptionof quality.” Bentley Motors Limited is a Britishmanufacturer of luxury cars and a subsidiary of Volkswagen AG since 1998 2. Bentley is widely regarded as one of the world’sfinest luxury automotive brands and a true British classic. Bentley Fragrances ideallymatch the Bentley Motors values: a mix of rum, musk and patchouli makes the fragrancerefinedand masculineinspired by the woods and leather synonymous with the handcrafted interior of aBentley.Harley-Davidson, Inc. was founded in1903 and become one of the world’s largest motorcycle manufacturers 3.

Harley has its own iconic brand, moreover, companyis known for its brand community. It owns Harley clubs and events worldwide aswell as a company-sponsored brand-focused museum. However, not all brandcampaigns were successful. CEO of the Interbrand Group claimed that “Harley Davidsonvalues are strong, masculine, very rugged values” 4.Brand extension to baby clothes and perfumes destroyed brand image and led toloss of certain share of customers. 

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