Presently, it is almost impossible to have successful business or create company without strong brand and brand equity. In a modern life, brand recognition is one of the most important things for customers choice, and for the future development and success of the company.
Product brand equity has become one of the most discussed concepts among marketing scholars. It is suggested that brand equity impacts on customers loyalty intensions. On the other hand, the true brand mindset set to be achieved, the relationship between brand loyalty and brand value needs to be recognised by customers.
This assignment will seek on branding and branding equity. First, the fundamentals of branding will be explained. Then then concept and assets of brand equity are explained. The chapter concludes with a strong brand by following the steps in the strategic brand management.
What is branding?
Branding is the process of endowing products and services with the power of a brand.
What is brand equity?
Brand equity is the added value endowed to products and services with consumers.
Discussion about four types of brand equity elements
A brand is an intangible asset for an organization. The concept of brand equity originated in order to measure the financial worth of this significant, yet intangible entity. Brand equity comprises the following elements.
Awareness of the brand name among target customers is the first step in the equity building process. Awareness essentially means that customers know about the existence of the brand and can also recall what category the brand is in
Anything that is connected to the customer’s memory about the brand is an association. Customers form associations on the basis of quality perceptions, their interactions with employees and the organization, advertisements of the brand, price points at which the brand is sold, product categories that the brand is in, product displays in retail stores, publicity in various media, offerings of competitors, celebrity associations and from what others tell them about the brand. And this is not an exhaustive list.
Perceived quality is also a brand association, though because of its significance, it is accorded a distinct status while studying brand equity. Perceived quality is the perception of the customer about the overall quality of a brand.
A customer is brand loyal when he purchases one brand from among a set of alternatives consistently over a period of time. In the traditional sense, brand loyalty was always considered to be related to repetitive purchase behaviour.
Significance of brand
Even marketers sometimes tend to reduce a brand to a mere logo or symbol, although it is much more complex than that. A brand is an abstract idea that incorporates various aspects of a product, including a logo, font, name, colours, packaging, as well as a wide array of consumers’ perceptions of it. The initial idea behind branding was to help customers distinguish between similar products by different manufacturers, and its primary role was to improve visibility and awareness. However, in time, the concept of branding developed and grew, and now we can talk about brand equity as something that is of vital importance to the value of any brand.
It’s basically how customers perceive a brand, and it equals the sum of all their interactions and experiences with the brand, as well as their expectations from it. Famous brands like Apple, Nike, or Coca-Cola have strong brand equity, and it can be translated into their ability to attract customers and retain them.
In other words, customers will always pick the brand they are loyal to over unbranded or competitor products. Finally, customers are willing to pay more for the brand they prefer, which means that strong brands have the luxury of commanding higher prices.
Advantages of brandings
Branding is the process of identifying a product with a name or image that communicates the qualities and benefits of a product to customers and prospects. A strong brand creates a personality for the product and differentiates a product from competitors. Branding can help small businesses increase and retain market share, launch new products and maintain profitable pricing levels
Small businesses that develop strong brands build preference for their products. When consumers are faced with choices in a store, they typically will favour a brand they have purchased before and trust, according to BrandXpress. This is an important advantage if you sell products that customers purchase frequently, such as food or other household products. In that sense, a strong brand makes an important contribution to customer loyalty.
Branding your product can improve the return on your advertising and marketing budget. Communicating the same messages and using brand elements such as logos, colors, packaging and graphics consistently helps to reinforce brand qualities. Building a brand that customers can easily recall and recognize can reduce your marketing costs in the long term.
A strong brand can help you launch new products or enter new market sectors. Giving new products the brand elements and qualities, that customers recognize, and trust reduces the risk of failure. The original product can be used to launch complementary products or products in a different category, because customers associate the new product with the existing brand qualities.
Branding can help you increase your revenue and grow your customer base. By promoting your brand consistently, you can move prospects and customers through different levels of brand familiarity. Brand recognition occurs when customers can recall a brand’s qualities. Brand preference occurs when customers choose your brand out of habit because they are satisfied with it. You have achieved brand insistence when customers actively seek out your product and will not accept a substitute.
A strong brand can help protect market share and create barriers to entry for new competitors. Competitors wishing to enter would have to make a major investment in brand development and marketing to match your strengths. Branding can also help you to maintain pricing levels. When customers insist on your brand, they will be willing to pay for the product in preference to lower-priced offerings.
Kotler’s brand equity model
The content behind the brand equity models is simple. To build a strong brand we must figure out how customers feel and think about our product. we must establish right type of experiences about our product around the environment and we need to make sure how customers have specific, positive, thoughts, feelings, beliefs, opinions, and perception about the product.
When we have strong brand equity customers will buy more and they will recommend our product to other habitants and customers will more loyal to us.
The shown diagram illustrates the four steps that we need to follow up to build strong brand equity. The model of the Brand equity are as follows
The first basic step of our brand is figuring out and communicating, what our brand is. Not only habitants aware of the brand is important but also, we need to make sure they are getting the right message as well.
Secondly, we ought to find out how our customers separate their choices and come to the decision between our brand and our competitor’s brand. Next, we have to find out what decision making process do our customers go through when they select the brand? And, when we follow up their decision making processes, we can figure out how much our brand stands out.
The second basic step is build meaning for brand so that will start to build loyalty among customers. We can build meaning for our brand through commitment for specific social issues, dedication to customer service. The meaning of our brand will give the people reason to feel proud of their purchases and this will make them to come back and purchase more.
The third basic step is customers response. Our customers response to our brand is categories as two “judgments” and “feelings”. The customer will constantly judge about brand through quality, credibility, consideration, superiority. Customers also respond to our brand according to how it makes them feel.
At the top of the brand pyramid we find relationships, which is concerned with the concepts of resonance. The rare brands that land at this level are able to actually create a community around the ownership of their products.
Aaker’s brand equity model
In his Brand Equity model, David A. Aaker identifies five brand equity components namely, brand loyalty, brand awareness, perceived quality, brand association, and other proprietary assets. Aaker defines brand equity as the set of brand assets and liabilities linked to the brand, its name and symbols that add value to, or subtract value from, a product or service. These assets include brand loyalty, name awareness, perceived quality and associations.
Methods used to build brand equity
Marketers build brand equity by creating the right brand knowledge structures with the right consumers. The process depends on all brand related contacts whether marketer imitated or not.
There are six criteria for choosing brand elements. The first three, memorable, meaningful, and likable and brand building. The latter three transferable, adoptable, and protectable are defensive and help adoptable and preserve brand equity against challenges.
Memorable – How easily customers recall and recognize the brand element, and when at both purchase and consumption?
Meaningful – Is the brand element credible? Does it suggest the corresponding category and product ingredient or the type of the person who might be use the brand?
Likable – How aesthetically appealing is the brand element?
Transferable – Can the brand element introduce new products in the same or different categories? Does it add to brand equity across geographic boundaries and market segments?
Adaptable – How adaptable and updatable is the brand element? Logos can easily be updated.
Protectable – How legally protectable is the brand element? How competitively protectable?
Measure the brand equity
The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the way marketing activities create brand value it is based on several premises. These distinct factors that will helps to measure brand equity as follows
Customers knowledge of your products and services is an important part of brand equity. But even better than customers knowing thinking about your brand.
Consumer preference is a powerful factor in daily purchase decision, it is the reason a customer a decide to travel further and spend more money to access a product or service they really like.
Financial metrics surrounding brand equity are directly tied to sales performances. If related to the financial value of your brand, are increasing your revenue is likely to be moving in the same direction.
Output is measure of marketing activity, which measure the marketing materials that get released to the public. Out looks at how often marketing materials are released, and the type of asset released to the market place.
Brand reinforcement and revitalization
Brand Reinforcement is all about maintaining brand equity; in other words, it is about making sure that the consumers do have the desired knowledge structures so that the brands continue having its necessary sources of brand equity. This could be done by marketing activities that would persistently carry the meaning of the brand, to the consumers – which could be in form of brand awareness and brand image. However, sometimes, even a well-designed reinforcement strategy fails for various reasons like emergence of new technology or competitors, change in customers’ taste and preference, etc. In this situation, the brands need to revive their fortune by returning to their roots, to recapture the lost sources of equity.
According to Keller (2012), Brand reinforcement involves in following
Maintaining brand consistency – This helps to enhance brand’s positive reputation with customers. Brand consistency leads consumers to get familiarized with the brand and enhance their perception about brand uniqueness, resulting in brand reputation.
Protecting source of brand equity – brand should always try to defend the existing sources of brand equity, they should also look for potentially powerful new sources of equity. However, there is very little need to deviate from a successful positioning, unless the current positioning is being affected by some internal or external factor which is making it less powerful.
Fortifying vs Leveraging – Fortifying refers to enhancing brand equity in terms of awareness and perception, whereas Leveraging refers to making money from a brand. Failure to fortify a brand might result in brand decay and there would be no leveraging from the brand anymore.
Fine – tuning supporting marketing program – This could be done through improving product related performance associations and non-product related imagery associations.
Requires either that lost sources of brand equity are recaptured, or that new sources of brand equity are identified and established. With a fading brand, the depth of brand awareness is often not as much of a problem as the breadth. Consumer tend to think of brand in narrow ways. Strategies to increase usage of and find uses for the brand necessary. A number of different strategies designed to both acquire new customers and retain existing ones are possible. Adjustments in the branding program may involve bran consolidation of brand deletion and brand name changes.