Download “Brand Equity “?

Q.2 Define the term “Brand Equity “? Discus the components of Brand Equity.
A brand's power derived from the goodwill and name recognition that it has earned over time,
which translates into higher sales volume and higher profit margins against competing brands.
Brand equity is a phrase used in the marketing industry to try to describe the value of having
a well-known brand name, based on the idea that the owner of a well-known brand name can
generate more money from products with that brand name than from products with a less well
known name, as consumers believe that a product with a well-known name is better than
products with less well known names. Another word for "brand equity" is "brand value".
Some marketing researchers have concluded that brands are one of the most valuable assets a
company has,as brand equity is one of the factors which can increase the financial value of a
brand to the brand owner, although not the only one. Elements that can be included in the
valuation of brand equity include (but not limited to): changing market share, profit margins,
consumer recognition of logos and other visual elements, brand language associations made by
consumers, consumers' perceptions of quality and other relevant brand values.
Consumers' knowledge about a brand also governs how manufacturers and advertisers market
the brand.
Brand equity is strategically crucial, but famously difficult to quantify. Many experts have
developed tools to analyze this asset, but there is no universally accepted way to measure it. In
a survey of nearly 200 senior marketing managers, only 26 percent responded that they found
the "brand equity" metric very useful.
The components of Brand Equity:
A recent article focused on settling the argument over "emotional messages" and "rational
messages" and which ones are preferable in marketing. The authors reference data that shows
that emotional campaigns are almost twice as likely to generate large profit gains than rational
ones, with campaigns that use facts as well as emotions in equal measure fall somewhere
between the two.
Even better than an emotional campaign is an emotional brand, which, in general, generate a
wide range of desirable business effects in improving profitability. Emotional brands reduce the
consumer's focus on rational features and benefits and have a substantial reduction on price
sensitivity.
"Brand Equity" is the sum total of all associations, experiences, and perceptions consumers
have over time with a company, including its products, services, marketing, employees, retail
stores, etc. As companies seek to establish greater Brand Equity, its three components must be
considered separately.
Awareness
Unaided awareness is the foundation and first key measure of brand equity. Awareness comes
from exposure, i.e. advertising, publicity, event sponsorship, store fronts and signage, email
campaigns, direct mail campaigns, packaging, website, banner ads, etc. These things must be
created with extraordinary style and creativity so they grab attention and have impact.
Understanding
Understanding comes from what you say about yourself, and, more importantly, what others
say about you. Do consumers think about you the same way you think about yourself? In the
past, understanding was shaped largely by the news media and word of mouth, but now social
media gives brands a tremendous opportunity to listen to what consumers are saying and
engage them in actual conversation. Imagine for a moment that your target audience could
only think of you in one single way. What would you want it to be, and how many would say
that very thing about you?
Loyalty
Loyalty comes through positive interaction with a brand. The more positive the experience, the
deeper consumer loyalty becomes. Branding is a business strategy not just a marketing
strategy. It is a long-term commitment, not a short-term initiative. Develop a positive
experience through product design, employee training, creating a great shopping experience,
and customer-friendly corporate policies. From a marketing perspective, look at highly
personalized data base driven marketing programs, i.e. preferred customer programs, cross-sell
programs, and particularly the personalization of your website.