Brand value – everyone wants it, however, only few are able to achieve it. The subject of “brand value” holds a significant position amongst marketers, executives, and entrepreneurs. Let’s discuss what makes a brand unique, and how it is evaluated.
Brand makes your business unique. It sets the company apart and has the ability to position the business on the top in their specific industry. Sometimes, a brand is the company’s most valuable assets. In fact, many companies are often referred to by the name used in their brand – and they become one and the same. A strong brand identity drives customer loyalty, for the simple fact that once a customer uses your services and has a positive experience, your brand will bring them back.
However, there is more to it than just a nifty logo and a catchy name. Everything you do within your business adds to your brand equity – the choices you make in product design, the quality of service that customers receive, the handling of customer complaints and any other services that your company offers – all of these things can add to credence to your brand equity.
What is Brand Equity (Value)?
Well, brand equity can be best defined as the phrase that is used inside the industry of marketing that defines the significance of having a well-established and recognized brand name, based on the concept that the owner of the brand is capable of generating more profits from products registered under that brand name over those products of a not so popular name. This justification is based on the perspective of many customers that a product which has a well-known name is much better compared to those products from a less popular brand name.
The main principle behind brand equity is the relationship between a consumer and the company selling the products/services. If the customer prefers a specific brand over the other, it is mainly because of his or her perception of the brand and its value regardless of the price tags on the product.
Of course, the company must strive hard to earn and maintain the consumer’s loyalty for their brand. To establish a brand value, the company must earn name recognition for its product, encourage the customer to actually try their product/service and convince them that their product is acceptable. Only after that the company can expect to secure a few preferences for their brands.
Having solid brand equity not only increases the profits and revenues for the company but it lower costs as well. the companies that already have an established brand equity are likely to spend less on marketing since the existing as well as potential consumers are already aware of their product. They don’t have to go into the hassle of educating the general public about their company and its products/services. Having brand equity also helps the company expand into different product lines. Since the customer is already following the brand, they are more likely to try any new product that is created by them.
Whether through a quality product line, excellent consumer service, and/or exceptional marketing techniques used by the company – having a strong brand equity symbolizes that the company has gained enough recognition and respect from their consumers that guarantees they will spend more on products created by that brand.
The Benefits of Brand Value
Simply put, “brand equity” is the construct which is specifically designed to replicate the actual value which the brand name is holding for products and services which it accompanies. Measuring brand equity has been considered important mainly for the reason that brands are regarded to be powerful influencers of crucial business results like market share and sales.
“Branded products invariably command a higher price than so-called ‘store brands’ or ‘generic’ – even when the product itself is a commodity such as sugar. In these cases, the higher price is due almost entirely to the power of the brand.”Inc. Magazine
Here is a list of the advantages of brand equity that were identified by Kevin Keller, a professor from Dartmouth College:
- Be perceived variably and then produce varied interpretations of the product performance
- Enjoy better loyalty as well as be less prone to competitive advertising actions
- Command bigger margins and gain more unyielding responses to cost hikes and flexible responses to price drops
- Obtain better support and trade cooperation
- Boost the effectiveness of marketing communication
- Backing brand extensions
- Produce licensing opportunities
Just like other constructs, brand value has been defined and gauged in different ways. It’s sometimes understood from the viewpoint of perceptible financial assets of a company. On the other hand, from the marketing research outlook, it is usually viewed conceptually, as the framework to understand the effectiveness of emotional and intellectual associations that customers do have with branded services and products.
Contrary to outright dollar valuations, which underscore the direct financial perspective, the marketing researchers are looking to gauge and then understand the brand value for strategic planning and positioning.
Brand Equity Modeling and Brand Value Measurement
Brand equity has been defined and measured in numerous ways. However, the measurement process is not as simple as counting the number of individuals who recognize a certain brand name or symbol. It can also not be assumed by the fact that if the brand is popular, it holds strong brand equity. In fact, the most powerful brands can effortlessly be weakened by any wrong steps taken by the company or faulty product.
As a matter of fact, most research agencies worked and developed their own brand value model which is implemented in collaboration with the end-user researchers. Professor Kevin Keller said:
“Although the details of various approaches to conceptualize brand value differ, they tend to share a general core: All definitions usually either explicitly or implicitly depend on brad knowledge structures within the minds of customers both organizations and individuals as the foundation or source of brand value.”Professor Keller
Researchers explain and gauge brand equity when it comes to knowledge that consumers have about a specific brand. Different published brand value models and measurements were available up to date. Remarkably, measuring brand value might be just a single piece of a more complete brand research program. Also, a brand research program of an organization might be just a single facet of a bigger research & insights program.
Brand Value Model:
- Brand Awareness (strength of brand in consumer’s memory)
- Breadth (likeliness of recognition and recall of the brand)
- Depth (mindfulness of the brand under various purchase or consumption scenarios)
- Brand Image (consumer perceptions and preferences for the brand)
- “Lower” order brand associations (perceptions of benefits and attributes):
- “Higher” order brand associations (judgments, responses and feelings):
- Brand Equity Measurement
- Brand Awareness (Brand recognition, Unaided recall, Aided recall)
- Brand Image (Free association, Interview, Means-ends chain analysis, Projective techniques, Zaltman Tech., Aaker Scale, Ethnography or Observ, Fournier BRQ scale)
- Extra Measurement
- Comparative Approaches (Brand based comparative approaches, Marketing based comparative approaches, Conjoint comparative approaches)
- Holistic Methods (Valuation approach, Residual approach)
Experts usually agree that the best way to measure the brand equity depends on its specific industry or company. In some cases, the brand equity can be analyzed by looking at the customer’s preference for the product while other cases require a careful study of customer’s satisfaction or market share of the company.
Most Powerful Brands in 2016
Facebook is a prime example of something that started small, aimed at kids in one college as a beta test and grew into a behemoth. They constantly update their platform on the back of customer feedback and sometimes it might take longer than the customers want but they keep them in the loop that change is coming. People threaten to delete their accounts all the time, but they just keep coming back for more. Almost two billion of them!