The idea of brand equity is central to separating businesses from others within the marketplace. Not only a sign or a phrase, it is the character that reflects the personality, beliefs, and what identifies a brand in front of society. Brand awareness is one of the ways of making sure the intended and targeted brand image is always established among customers.
Whether your company is new or old or small or big, it cannot be negated that it becomes crucial to understand and build brand image. This blog is worth reading if you want to know more about brand identity, why it’s critical, and how to start building a powerful brand identity.
What is Brand Equity?
Brand equity represents the value assigned to the brand name and the proven ability to offer value to a particular product or service. It is the accumulation of perceived evaluation; trust, and recognition that people have bestowed on it. It tells about the extent to which a brand is capable of changing consumer perceptions positively and making a consumer immediately accept the brand. This is normally called positive brand equity while negative brand equity is vice versa – the consumer’s ability to reject a particular brand no matter the price.
First, David Aaker, one of the founding fathers of the concept of brand management defined brand equity as a “collection of brand assets and liabilities associated with the brand name and symbol that increase or decrease the value of the product or services.”
Meaning of Brand Equity
Brand equity meaning needs to be defined through both the strategic and emotional aspects that it brings. It includes all the non-physical elements of a brand, that is the customer’s perception of that brand, their believability, and the power to call for their loyalty. This means that when customers make a decision to feed on a certain brand out of a myriad of brands in the market then it is a clear indication of high brand value.
Why is Brand Equity Important?
Brand equity is the foundation of brand management and has a massive impact on consumer decisions and company performance. Here’s why it matters:
- Increased Revenue: Customers are always ready to pay extra bucks to get products with reliable brands.
- Competitive Advantage: The global market is highly competitive today and even more so when a great brand is easily noticed among similarly positioned brands.
- Customer Loyalty: They buy from the firm repeatedly, and in the process, they inform others of the quality products and services the firm offers.
- Easier Market Expansion: Entering new products also becomes easy enjoying high brand value.
How to Measure Brand Equity
The overall importance of brand equity can only be ascertained if efforts are made to quantify it and identify it in detail. There are several methods to evaluate it:
1. Customer Perception
Evaluate the level of credibility, quality, and value perception of customers towards the brand. Questionnaires are specific types of questions referred to as surveys and feedback forms.
2. Market Performance
Consider such factors as total sales, gross and net revenues, and proportion of market share. A product with a high brand image has a relatively higher price, a high rate of sale, and a better growth rate.
3. Brand Awareness
Closely associated with brand familiarity, a high brand image is most commonly expressed in terms of reach. This can be measured with the help of certain indicators such as the degree of participation within social media networks or search volumes.
4. Brand Loyalty
Brand equity includes customer retention rates, subsequent purchases, and customers’ loyalty program enrollment.
5. Net Promoter Score (NPS)
It is a measure of consumer satisfaction that will see a customer give you chances to recommend a particular brand. An NPS above the benchmark figure is an indicator of a positive brand image.
Example of Brand Equity in Action
Let’s explore some real-world brand equity examples to understand its significance:
Apple
Brand equity can best be explained with the help of Apple. However, it has a lofty price positioning, but the customers still use the product due to brand association, unique selling proposition, and reliability. In line with this Apple can control the technological market and generate high levels of profits due to the strong brand image.
Nike
Nike is an excellent example of high brand equity as established by their slogan, which is; ‘Just Do It’ and their link to athletic performance. Nike is also viewed by consumers as an embodiment of performance and fashion, and that’s why Nike is successful all over the world.
Coca-Cola
Who of us does not know the legendary phrase ‘Open Happiness ’ associated with the consumption of Coca-Cola? It can be concluded that it took a long-term approach in formulating brand image, branding advertising, and consumer relations putting it among global market leaders in drinks production.
Strategies to Build Brand Equity
It is pertinent to mention that the development of strong brand value takes time and effort along with meaningful planning. Here are some key steps:
1. Focus on Quality
Offer quality goods and/or services so that customers will develop confidence in the organization.
2. Consistent Branding
Make sure that your brand and messaging both on and off-line are coherent and coherent in terms of their tone.
3. Engage with Customers
Improve interaction through customizing communication, creating social presence, and creating quality customer service.
4. Invest in Marketing
You may raise the visibility and improve the perception of your brand through advertising.
5. Foster Emotional Connections
Make sure your brand has a compelling story behind it that will make your audience relate to it. Relationships with affect lead to higher brand associations.
FAQs
What is brand equity?
Brand equity definition relates to the added or extra value of a brand to the product it is associated with through consumer perception.
What strategies help to build strong brand equity?
Quality, branding, interactions, marketing, and emotions to develop brand equity and customer loyalty as good strategies to execute this technique.
How can you measure brand equity?
Evaluating brand equity requires the examination of customer demographics, market performance, and metrics such as NPS, and customer loyalties.
What are some examples of brand equity?
Some recognisable brand equity are Apple, Nike, and Coca-Cola whichever have a customer base and offer their products at higher prices.
Why is brand equity important?
It fosters trust, increases sales, and offers organizations the edge needed to outcompete others making it a critical factor for sustainability.
Conclusion
Understanding brand equity is crucial for establishing and sustaining a long-term competitive brand image in the modern marketplace. It is far deeper than branding affecting the image and identification in the form of a logo or catchphrase; it defines the values, beliefs, and attitudes that consumers identify with. The value that comes along with positive brand equity helps in developing trust, and customer loyalty and positions an organization as the market leader, hence, enhancing its power to control revenues in the market. Firms such as Apple, Nike, and Coca-Cola are some of the successful brand-marketed organizations showcasing how brand equity leads to organizational success through quality branding, branding constancy, customer relations, and bondages. Measuring brand equity through the eyes of the customer, market position, and client loyalty empowers the business to optimize actionable approaches that maintain the revived brand relevance in the market.