Brand Equity

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INTRODUCTION A brand is a name or a symbol to identify a source of a product. When developing a new product, branding is an importatant decision.The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. This concept is referred to as BRAND EQUITY. What is brand equity? Brand equity is an intangible asset that depends on association made by consumer. There are three perspectives from which to view brand equity : Financial: one way to measure brand equity is to determine through price premium that a brand commands over a generic product. Brand extensions: A successful brand can be used as a platform tp launch a related product. Brands extension can enhance the core product. Consumer Based : A strong brand increases the consumer attitude strength toward the product associated with the brand Attitude strength is built by experience with a product.

Brands - introduction to Brands The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. Companies can create brand equity for their products by making them memorable, easily recognizable and superior in quality and reliability. Mass marketing campaigns can also help to create brand equity. If consumers are willing to pay more for a generic product than for a branded one, however, the brand is said to have negative brand equity. This might happen if a company had a major product recall or caused a widely publicized environmental disaster.

Investopedia explains Brand Equity The additional money that consumers are willing to spend to buy Coca Cola rather than the store brand of soda is an example of brand equity. One situation when brand equity is important is when a company wants to expand its product line. If the brand's equity is positive, the company can increase the likelihood that customers will buy its new produ ct by associating the new product with an existing, successful brand. For example, if Campbell’s releases a new soup, it would likely keep it under the same brand name, rather than inventing a new brand. The positive associations customers already have with Campbell’s would make the new product more enticing than if the soup had an unfamiliar brand

nd is a product with unique character, for instance in design or image. It is consistent and well recognised. The advantages of having a strong brand are:  Inspires customer loyalty leading to repeat sales and word-of mouth recommendation The brand owner can usually charge higher prices, especially if the brand is the market leader

Retailers or service sellers want to stock top selling brands. With limited shelf space it is more likely the top brands will be on the shelf than less well-known brands.

Some retailers use “own-label” brands, where they use their name of the product rather than the manufacturers like Tesco’s ―Finest‖ range of meals and foodstuffs. These tend to be cheaper than the normal brands, but will give the retailer more profit than selling a normal brand. Some brands are so strong that they have become global brands. This means that the product is sold in many countries and the contents are very similar. Examples of global brands include: Microsoft, Coca Cola, Disney, Mercedes and Hewlett Packard. The strength of a brand can be exploited by a business to develop new products. This is known as brand extension – a product with some of the brand’s s characteristics. Examples include Dove soap and Dove Shampoo (both contain moisturiser); Mars Bar and Mars Ice Cream Brand stretching is where the brand is used for a diverse range of products, not necessarily connected. E.g. Virgin Airlines and Virgin Cola; Marks and Spencer clothes and food. The logo on a product is an important part of the product. A logo is a symbol or picture that represents the business. It is important because it is easy to recognise, establishes brand loyalty and can create a favourable image.

MEASUREMENT of brand EQUITY. “You can’t manage what you don’t measure.” ~ Peter Drucker If you are a brand manager, by definition, you are measuring the performance of your brand on a regular basis. Otherwise, how can you successfully manage your brand? Here are the items I recommend brand managers measure:
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Unaided brand awareness (for the categories in which the brand competes and perhaps for the customer benefits the brand delivers) Top-of-mind brand associations (your brand’s true position in its customer’s minds) Perceived brand delivery against the most important customer benefits Attitudinal loyalty toward the brand What customers think makes your brand unique (differentiation) Brand price sensitivity (a measure of brand strength) Brand vitality (a measure of brand marketplace momentum) Brand quality perceptions Brand value perceptions Brand accessibility perceptions Emotional connection to the brand Brand values alignment with its customers Brand distribution Brand market share Brand sales Brand profitability

If you have access to these brand metrics, it is more likely that you are actively managing your brand to increase its strength and performance. One should measure most of these items at least once a year and immediately after major brand initiatives.
Branding strategies. Brand awareness, Brand Equity, Brand positioning, Instinctively, every small business owner understands the importance of brand equity, even if they may not be able to define the idea. Marketing-speak aside, brand equity is how your customer recognizes why you are different and better than the alternative. Brand equity is built on that customer's direct experience with your product or service. This experience, repeated over time, creates equity or value in your brand. And it serves as a shorthand in the buyer's mind that separates you from everyone else. Brand equity is what creates loyalty that carries beyond price or the occasional product or service bump in the road. It is the quality that motivates your customers to recommend their friends or colleagues to you. Everyone wants brand equity. But building it, when you are more likely to qualify for the Inc. 500 rather than the Fortune 500, can be a puzzle. Particularly when the role models for brand equity are global icons like Coca Cola, Volvo, or Sony—hardly your peer set.

introduction: The concept of brand is integral to the any given product. But what measures a strong brand or a success of a brand? Is it high market share, popular advertising , effective point of sale, or the ability to conduct a price premium?


Many people ask whether everything can be branded, or if there are types of product that cannot be branded. Brands have been found to give an important competitive advantage across a wide variety of industries. What about medical products? Brand clearly have power in this industry, with over the counter products. For EG: People know and trust some headache brands.


THERE ARE two sources of power : One derive from the customer perspective’s and whether the customer perceive that the the brand provides value & meaning. If they do believe it does, then the brand reduces search cost, & this is important to consumer who lead to busy lives & have too many choices to make.Brands help customers by reducing the effort required to choose a good product. Ones the initial search is completed by the customer, the consumer has built trust & understanding in a brand. The brand also gives the other benefits of self- expression. These tend to apply more in consumer goods & business to business realms In Business-business branding can be of great importance. Finally, the brand offers a source of final return.the search on benefits of strong brands, lo9oking across companies , shows that companies gain greater loyalty because of brands. A strong brand makes people purchase it more often. It creates resistence to competiting marketing action.


THE proposed value of brand equity is the aggregate value of purchases of customer who buy the brand respectively. Its magnitude is the function of their frequency of purchase, the extension of repetation and the relative price they pay for the brand.

Relative price reflects the perceived value of a brand . A high relative indicates that a brands buyer value it more than the others in the category. Conversely, a low relative price reflects a weak brand “pull”. BY using relative price in the calculation of brand equity, we introduce the element of perceikve value of money.

REALTIVE PRICE is expressed as the ratio of the average retail selling price of the brand to the category average. LOYALTY RATE: IS DEFINED AS THE PERCENTAGE OF CATEGORY OF purchases of the brand by the people.

INCREASING BRAND EQUITY We believe this approach to defining and measuring brand equity helps to focus marketing strategy and make it easier to choose among alternatives. If, for eg, a major goal is to increase a brand equity, the marketing strategies, & tactics to be used must increase brand loyalty or pave the way for price increase while not losing a significant numbers of customers. EXPIRIENCE SHOWS THAT BRAND LOYALTY CAN BE STRENGHTENED IN ONE OF SEVERALK WAYS: INCREASING CONTINUITY OF PURCHASE via SUCH TECHNIQUE as ‘frequent flier’ or ‘frequent buyer’ programs, members club continuity promotion that reward cumulative purchase , affinity programs, that create identification between the users of a brand and some recognition organization, cause, lifestyle or movement. Increasing price can be an effective strategy if a large enough number of brand customers believe it will deliver the value at higher price. We have known cases where increasing price have actually help to build business.In one case, the manager of a small little known spirits the brand raised its price as a way of committing ‘brand suicide’

Trading up can be effective way to increase price while protecting a brand’s original user base. This is accomplished by introducing a justifiably more expensive line extension while continuing to offer the ‘parent’ product at the same price. The key word is ‘justifiably’ so that the new entries does not denigrate the quality of parent.

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Mental Brandresponse al

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Why Manage Brand Equity? Ø Presence of a brand in consumers mind Ø Influence on their buying behaviour Ø

Effects on brands

market position andfinancial result


value of

the brand as a immaterialassets of the company

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