BRAND EQUITY The post 90s saw a clearing of the fog that surrounded the concept of brand. Managers and academicians began to take a closer look at the anatomy and role of brands. One immediate realization that dawned was that a brand is more than a simple tag given to identify and differentiate a product. It is a tag, no doubt. But at a deeper level, it is an assts. Brand is clearly an assets capable of generating revenue streams. It is all about financial value. Strong brands dramatically enhance revenue capabilities of product. It is this financial angel of the brand that led to the concept of equity. At the heart of the equity debate is the question: how does a brand create superior financial outcomes for the owners? And the lesson is …show more content…
However, this is not the case. There is really only one issue: Brand Equity. This is because brand equity is really the umbrella concept. All these four issues are but contributors to it. Equity is the driver of a firm’s bottom-line and it must be protected and nurtured. “After all, the purpose of advertising should really be to increase a brand’s equity. A successful new product programme will leverage the existing brand equities into new categories, or at least point out categories where equities can be effectively built from scratch. And improvements in product quality and customer satisfaction are more tools we use to build a loyal customer base, one of the hallmarks of a Brand‟s Equity”. DEFINING BRAND EQUITY Brands are valued for their equity. Brands add value. Everyone in the marketing profession agrees that brands can add substantial value. It is also true, sometimes, that brands become a burden. The brand can be both a value enhance and a decrease. A variety of opinions exist about brand equity. Some of these as …show more content…
“Brand- equity consists of differential attributes underpinning a brand which gives increased value to the firm‟s balance sheet”. (Chernatony & McDonald) “The brand equity is the total accumulated value or worth of a brand; the tangible and intangible assets that the brand contributes to its corporate parent, both financially and in terms of selling leverage”. (Upshaw) The marketing literature is laden with works which explore, interpret and ‘demystify’the concept of brand equity. The advantages of brand equity direct academic and managerial attention to its measurement and management. It is something which cannot be taken lightly. The marketers who dare to take it in lighter vein would do so at their own peril. There appears to be a broad consensus on the value of brand equity but it comes with a slight area of darkness around it. At the most fundamental level, differing views guide out understanding as to what it is. A brand adds value in a number of ways. According to Aaker, Brand equity creates value for the marketer and the
In every given business, the name itself portrays different meanings. This serves as the reference point and sometimes the basis of customers on what to expect within the company. Since personality affects product image (Langmeyer & Shank, 1994), the presence of brand helps in the realization of this concept. Traditionally, brand is a symbolic manifestation of all the information connected with a company, product, or service (Nilson, 2003; Olin, 2003). A brand is typically composed of a name, logo, and other visual elements such as images, colors, and icons (Gillooley & Varley, 2001; Laforet & Saunders, 1994)). It is believed that a brand puts an impression to the consumer on what to expect to the product or service being offered (Mere, 1995). In other application, brand may be referred as trademark, which is legally appropriate term. The brand is the most powerful weapon in the market (LePla & Parker, 1999). Brands possess personality in which people associate their experience. Oftentimes, they are related to the core values the company executes.
This argument is supported by Solomon (1992) with him discovering that purchase decision that is based on loyalty might become a habit which leads to brand equity. On the other hand, Aaker (1991) described brand loyalty as consumer’s mentality toward a brand that drives them to consistently purchase the same brand. As per Yoo (2000), brand loyalty has the ability to affect consumer choice to buy a same product or brand and cease to switch to other brands. Subsequently, Yoo (2000) reasoned out that brand loyalty is the root for brand’s value. Aaker (1991) additionally contended that brand loyalty is a fundamental component used to assess brand’s value due to the fact that brand loyalty can increase profitability. The consumers who are loyal to a brand will not assess the brand, instead they simply purchase it unquestionably based on their experiences with the brand (Sidek, Yee, and yahyah, 2008). The loyal customers bring advantages to a firm by cutting down costs, encouraging easier strategies implementation, providing time for responding to competitions, creating a barrier to entry, increasing sales volume, protecting firm against detrimental pricing and to retain rather than seek for customers (Aaker 1991; Rundle and Bennet, 2001). Loyal customers are also less incline to change to another brand simply because of pricing factor and they purchase more frequently compared to their non-loyal counterparts (Bowen and Shoemaker,
Kevin Keller’s brand equity model is known as the Customer Based Brand Equity Model (CBBE). This model was first introduced in his book, Strategic Brand Management. According to the model, a company must shape how customers think, feel, and act towards a product in order to build a strong brand. A consumer must have the right type of experience around the brand, which foster positive thoughts, opinions, perceptions, beliefs and feelings. By building strong brand equity, customers will recommend company products and will buy more of them. Moreover, this increases brand loyalty and decreases brand switching to competitors. One’s memory consists of a network of associations and connecting links, and any association ever processed about a brand
A brand audit is a detailed assessment of a brand’s current ranking in the market compared to other competitors. It provides information on how the business is performing in the market. A brand audit also aims at examining the image and reputation of the brand as perceived by customers. The two key elements of brand audit are brand inventory and brand exploratory. Brand inventory provides up to date itinerary of how a company markets and brands its products. On the other hand, a brand exploratory is an examination undertaken so as to comprehend what consumers feel about the brand. It seeks to conduct a consumer insight research in order to acquire consumers’ feelings and perceptions. This paper looks into the brand exploratory aspect of auditing under the customer-based brand equity (CBBE) model.
Companies use a collection of brand equities to represent their products in the market (Voolnes, 2012). Brand equity refers to the commercial value that is derived from the perception of consumers on any given brand name of particular products in the market as opposed to the product itself. Ataman (2003) notes that the effect to the consumer is in the brand name and not the product itself. Companies use logos, trademarks and a collection of other symbols to present this information to the customers. The use of these symbols is meant to try and capture the customer mindset so that they can be thinking about the company products at all times through the items they possess at home (Estes, Gibbert, Guest, & Mazursk, 2012). This can well be explained by use of the customer-based brand equity model that brings together the requirements for a publicly renowned brand in the market.
Brand equity is crucial as it implies that the brand itself is an important (financial) asset and can be calculated in financial terms (Barwise, 1993). This is particularly important in the luxury sector as from a behavioural viewpoint, brand equity can differentiate a company or product from other competitors, adding to their competitive advantages based on non-profit competition (Aaker, 2004). The model created by Aaker (1992) states that there are four categories of brand equity; Loyalty, Awareness, Perceived Quality and Associations. Luxury branding relies on a high level of perceived quality, loyalty and associations, although potentially less so for awareness, as it is thought that consumers choose luxury brands based on their exclusivity and as such the more the awareness that surrounds the brand, there is potential for it to become less valuable (Phau and Prendergast,
In the past decade companies are starting to see their brand assets, and with this branding has taken on a greater significance. So today brands are more than just marketing slogans and logos. All businesses are building their brands through certain actions and in their actual presence they find a 'position' in the mind of consumer and prospects. This is based on experience and exposure of the brand in the competitive marketplace. There are certain advantages to take into account in a Brand Strategy;
Definition; - “brand equity is the added value endowed on products and services. It may be reflected in the way consumer think, feel, and act with respect to the brand, as well as in the price, market share and profitability the brand commands.”(Kolter and Keller.2012, p265) according to the case study of Holland and Barrett, brand equity refers to high brand value, brand with high value equity means, H&B has the ability to create some sort of positiv...
[5] Woon Bong Na, Roger Marshall, and Keller, K.L. (2000) Measuring Brand Power: Validating A Model For Optimizing Brand Equity.
Aaker, D.A., (1991), “Managing Brand Equity: Capitalizing on the Value of a Brand Name”. New York: Free Press. P. 134-140
Helm, C., & Jones, R. (2010). Extending the value chain – A conceptual framework for managing the governance of co-created brand equity. Journal of Brand Management, 17(8), 579-589. doi:10.1057/bm.2010.19
Secondly, some light has been thrown on the previous researches by various authors on the similar topics by providing with a summarised form of the same. It helps in better understanding of the ongoing concepts and perceptions on the concept of brand and its importance.
Brand positioning refers to “target consumer’s” reason to buy your brand in preference to others. It involves identifying and determining points of similarity and difference to ascertain the right brand identity and to create a proper brand image. A significant differential advantage can lead customers to focus on product benefits other than price. Brand Positioning is the key of marketing strategy. A strong brand positioning directs marketing strategy by explaining the brand details, the uniqueness of brand and it’s similarity with the competitive brands, as well as the reasons for buying and using that specific brand. Positioning is the base for developing and increasing the required knowledge and perceptions of the customers. It is the single feature that sets your service apart from your competitors.
According to Shimp (2007), there are five important factors which determine the purpose of advertisement in terms of marketers’ communication with consumers. He listed these five factors as follows: “(1) informing, (2) influencing, (3) reminding and increasing salience, (4) adding value, and (5) assisting other company efforts.” (p.246). To clarify that, the first most important aspect is informing people which means company needs to enhance the awareness of the consumer about their products by mentioning its advantages and features. Advertising also affect the products in two ways. Firstly, by basic demand, which build consumer desires for old products of the company and secondly, refers to a new brand of the company. In addition, effective advertising can retain consumer’s mind fresh about the image of a brand which develops the trace of the memory where consumers have to choose between two or more products. Moreover, it may change the product quality, create new, well-designed and elegant product and change consumers view towards the product. Lastly, by effective advertising program, company may save money and time as s...
Brand equity is one of the terms marketers use. How much is a brand worth? Brand equity is the value of the brand it doesn’t develop instantly. A brand has to be nurtured and marketed so consumers trust the brand. Brand equity can also affect the buyout price of a company. There are three different meanings of brand equity. The first is the total of brand as a separate asset when it is sold. The second is how much a consumer is attached to the brand. And lastly to describe the beliefs and associations that consumers have about the brand. Marketers tend to define brand equity differently from accountants.