Brand Equity

Brand Equity

Brand equity is the public valuation of the brand. It is the consumers' perception and attitude about a product measured collectively. For a brand to be strong, it has to retain current customers and attract new ones. With brand equity, the race is on to keep building and to keep moving by bringing up new and exciting products in services. It is the marketing effect which separates one product which has a brand name compare to other which does not. Today we see more and more brand extension effect in the market because companies have been convinced that their brands are among the most treasured resources. Therefore, companies use advertisement as their primary tool to develop and nurture brand equity. Well known brand charge premium prices from their customers just because it has a brand name and are comparatively higher in supply. So, since it has financial benefits for the firm, the researches are finding ways to measure brand equity, also the customers start looking for qualities for which they have paid the money for.

A product first seeks to attract new customers and retain the old one. The ability to attract new customer is perceptual because at first customers will not have actual brand experience. So, they go by for what they hear, see and believe about a brand. The first step in building brand equity is for the company to define itself and what it hopes to represent for consumers. The consumer will reward the brand owners with dollar assuring future cash flows to the company as long as customer's preference remains the same. For this the company will assure that the buyers will benefit from their product. Build a brand by the company to gain name, recognition and allure its customer to come and try their products. Companies spend a large amount of money for the recognition of the new brand. When all of these elements support a distinctive image of the company and its products in the minds of consumers, the company has established brand equity.

Most companies structure their marketing programs around building and preserving their brand equity. "To be a strong brand, a company must instill a clear, unwavering consumer perception of the distinctive emotional or functional benefits of its products and services," Duane E. Knapp explained in an article for Risk Management . It is the customers' impression about the product and services. If the impression is not good there is a chance that a competitor's product may get a competitive advantage.

Branded products invariably command a higher price than the general one even for a commodity like salt or sugar. Brand value creation begins with firm's investment in marketing programs such as research and development, trade support and marketing communication. The customer's mindset will result in market place performance such as price premium, reduced price elasticity, market share and more successfully expand brand into other categories. It can be expanded online as well by using technology to enhance the buying experience for the customers. Internet has made it easier for the buyers and sellers to come together and sellers to provide new ways to service their customer's needs. Customer's expectation should be recognized first so that they can be provided customer support and new production efficiencies. The companies should understand the benefits they want to deliver through internet and the way technology can help them. If the companies are successful in improving their relation with the customers through technology, this can create their brand equity.

To have a brand, a product first need advertisement which is to be something different, something creative or something innovative so that people remember them. The product's main purpose should be to register its brand name and convey its image or message and to persuade a customer to buy the product. Coca- Cola's brand equity is the highest in the world. The increasing amount of Coca-Cola annually is not because it has increased the quality of the product but because it spends almost half of the revenue earned in its advertisement. The new advertisement every season, endorsed with celebrities like Aamir Khan, Imran Khan, etc. features them not because they want to increase their customers but because they want to maintain the brand equity. If brand awareness and brand recall are not kept fresh and strong, a lot of time and expenses will be wasted with lack of long term wealth generation.

Because the purpose of brand equity is to measure the brand, a brand includes the logo, name, image and perception that identify a product amongst the customers. Consumer's perception is measured on five dimensions: familiarity, uniqueness, relevance, popularity and quality. It uses handful of standardized attitude measures that are generalizable across brands, business sectors, and markets. Brand equity uses promotion techniques, advertisements and other