Brand Equity

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

Product Reliability,

Durability & Serviceability

Service Effectiveness, Efficiency& Empathy

Style and Design

Price

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:

User Profiles

Purchase and Usage Situations

Personality & Values

History, Heritage, & Experiences

Imagery Dimensions

User profiles

Demographic and psychographic characteristics

Actual or inspirational

Group perceptions—popularity

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

Nostalgia

Memories

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:

Brand quality

Value

Satisfaction

Brand credibility

Expertise

Trustworthiness

Likeability

Brand consideration

Relevance

Brand superiority

Differentiation

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:

Warmth, Fun

Excitement,

Security, Social Approval,

Self-Respect

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:

Behavioral loyalty

Frequency and amount of repeat purchases

Attitudinal attachment

Love brand (favorite possessions; “a little pleasure”)

Proud of brand

Sense of community

Kinship

Affiliation