WHAT IS BRAND EQUITY
Brand Equity is the sum total of all the different values that people attach to a brand name.
· Reflected in how consumers think, feel & act W.R.T. the brand.
· Reflected as prices, market share & profitability the brand commands for the firm.
It is a common denominator to interpret and evaluate the psychological & financial value of a brand.
In other words brand equity is the value and strength of the Brand that decides its worth. It can also be defined as the differential impact of brand knowledge on consumer response to the Brand Marketing. Brand Equity exists as a function of consumer choice in the market place. The concept of Brand Equity comes into existence when consumer makes a choice of a product or a service. It occurs when the consumer is familiar with the brand and holds some favourable positive and distinctive brand associations in the memory.
BRAND EQUITY CAN BE DETERMINED BY MEASURING:
· Return to share holders.
· Evaluating the brand image for the various parameters that are considered significant.
· Evaluating the brands earning potential in long run.
· By evaluating the rise in volume of sales, that has been created by the brand.
BENEFITS OF BRAND EQUTIY
· Greater loyalty, lesser vulnerability
· Higher prices, Larger margins
· Additional brand extension opportunities
· Channel power - greater trade support
· Additional retail shelf space
· Reduces customer switching behavior
· Prevents erosion of market share
· Legal protection of the brand
· Licensing opportunities
CONSUMER BASED BRAND EQUITY
1. BRAND SALIENCE
Measures awareness of the brand
Brand at top of mind or not?
What type of cues & reminders are required?
Customer has to be clear about Category Identification
Needs Satisfied & Secondary Features
2. BRAND PERFORMANCE
It describes how well the products meet customer’s functional demands.
Parameters used for evaluation:
Ingredients of the product
Durability & Serviceability
Service Effectiveness, Efficiency& Empathy
Style and Design
3. BRAND IMAGERY
It includes the ways in which brand attempts to meet customer’s psychological or social needs.
It is the way people think about a brand abstractly and not actually.
Imagery associations can be made directly or indirectly.
Four intangibles can be linked to the brand:
Purchase and Usage Situations
Personality & Values
History, Heritage, & Experiences
Demographic and psychographic characteristics
Actual or inspirational
Purchase and usage situations
Type of channel, specific stores, ease of purchase
Time (day, week, month, year, etc.), location, and context of usage
Personality and values
Sincerity, excitement, competence, sophistication, and ruggedness
History, heritage, and experiences
4. BRAND JUDGEMENT
It is customer’s personal opinion or evaluation of the brand.
It is combination of brand performance & brand imagery.
Four types of judgments are particularly important:
5. BRAND FEELINGS
These are customer’s emotional responses & reactions to the brand.
It also includes the feelings evoked by marketing program for the brand or by other means.
Few important brand feelings are:
Security, Social Approval,
6. BRAND RESONANCE
It describes the nature of relationship between the brand & customer.
It is characterized in terms of intensity, or the depth of psychological connect in form of:
Frequency and amount of repeat purchases
Love brand (favorite possessions; “a little pleasure”)
Proud of brand
Sense of community