Meaning of Brand Equity in Marketing Essay

Introduction

Meaning of brand equity

Brand equity is viewed as the result of marketing when a product becomes recognizable among other brands. Brand equity is the power and ability in the minds of the consumers to recognize a product then purchasing the product which leads to augmented sales and amplified profits against similar competing brands. Brand equity has been adopted by large and small businesses. To realize brand equity, marketing mix has been adopted¹.

Advantages of brand equity

Brand equity enables the company predict their income. Increased market share leads to increases revenues. The costs involved in promoting the product are also reduced. The company can enjoy premium pricing. In some cases, brand equity is sold or released. This is because it is considered an asset. Brand equity is a bridge that enables the company realizes success in a competitive environment.

Brand equity causes the company to reflect on the past and develop a direction for the future. It allows companies focus and obtain guidance in a competitive environment. Brand equity facilitates customer recognition from the packaging, logo, color and name. It increases the number of loyal customers who have experience with the product and even associate with the product.

Consequently, the revenues increase with the number of customers increasing. When younger people become loyal they grow up with the brand and become a reliable customer for the company. Promoted brands are effective and allow extension of products. Brand equity becomes an asset to the organization and can be leased or borrowed to yield more revenues².

Thesis statement

This paper seeks to describe the concept of brand equity, its underlying theories and its practical application.

The concept of brand equity

A brand which is either a name or a symbol will identify the origin of a product. Branding is significant when it comes to recognition and positive perception in the minds of the customers. Brand equity is positive associations given to a particular brand by customers. Brand equity can be viewed in three points of view; financial, brand extension and consumer based.

The financial view considers the price premium of the product over the other brands. Brand extension view utilizes the successful brand image to launch new products. The advertising cost can be reduced in brand extension and enhance the existing brand.

The consumer based view influences the consumer perception of the brand. Actual experience if form of trails builds the brand. Positive perception, good attributes and association lead to brand loyalty from the customers³.

Brand equity is leased or sold. It can be borrowed and extended to a line of products in same or different categories. Some companies have the same brand for different products while others have a single brand for each product. Brand equity should be protected and be consistent as it meets the customers’ needs⁴.

Theories underlying brand equity

Different scholars have done research in brand equity. More literature has been generated from the research to shed more light in the branch. Brand equity has been discussed as a theory that portrays the outcome of brand recognition⁵.

Branding involves popularizing an image or brand name to the public to make it recognizable. Branding also includes creating a positive image for a company. Branding sets a standard for a company which should be maintained.

Branding enables companies extend their product line beyond what they had as an original product. A successful brand name causes customers to choose products over others offered by competitors. Branding enables companies to bring better and affordable prices to the consumers.

Marketing communication is also related to brand equity. Marketing communication reveals the perceptions and the mindset of the consumer on particular brands or products. As a result, marketing communication enables the company adopts a strategy that is practical, efficient and maximizes the results. It is possible to identify the consumer’s needs and get a feed back when the product is in use.

The company can communicate to the customer in a timely manner. Marketing, advertising, new developments, new brand names and repositioning of brands depend on effective marketing communication for successful brand equity. Marketing communication is based on the customers hence the company can view the situation form a different perspective⁶.

Practical application of brand equity

Brand equity can be introduced inform of a quality product. The quality product will build the brand name and future products will be launched using the established brand name. Positive assessment from the customers is important.

The brand should be easy to remember by elaborating. Brand attitudes are developed when the customer can recall their evaluation of the brand. Consistency and fortification play a significant role in the application of brand equity. The image should remain consistent for a long time. The customers mind will remember and develop a positive image of the brand⁷.

Brand equity can be applied in both services and products. When the correct combination of marketing mix is adopted, brand equity can be achieved. The application of brand equity involves expertise at the different phases. Expertise are involves in the manufacturing and marketing of the products⁸.

The aim is to serve the particular needs of the customers. Brand equity application recognizes important measurements in the sales, marketing and customer loyalty. The company understands that the branding actions are interrelated with other functions of the business. Moreover, application reflects the overall goal of the company. The qualities of the brand can be identified in the different brands.

During application of brand equity, the company makes note of the diverse disciplines in branch management. The marketing strategy, the product, customer perception and recognition as well as promotions should be applied in correct measure to ensure that brand equity is attained. Effective and efficient application will lead to focused marketing strategies that are reliable in creating awareness of a particular brand⁹.

The strategies of increasing brand equity

Strategies of increasing brand equities require planning, implementation and evaluation at all phases of the process. One of the strategies of increasing brand equity is using the marketing mix. Marketing mix is a practice in marketing where different elements of a product in market are controlled and adjusted to meet the customer’s needs and to bring revenue to the company.

Marketing mix also refers to marketing plan commonly referred to as the 4P’s. The 4P’s include place, price, product and promotion. The marketing plan or extended market mix usually involves 7P’s which include: place, price, product, promotion, people, process and physical evidence. All the 7P’s which make up the marketing mix are significant.

People in the marketing mix are the personnel in the company that customers interact with. Process in the marketing mix is the systems and practices of the company that influences the marketing methods of the company.

Physical evident in the marketing mix refers to the elements of the store such as the uniform of the employees, sign boards and images in the store front. Different ways of advertising or marketing can be used in combination¹⁰.

Marketing is a concept that denotes placing the correct product in the exact place, with the right price and in the paramount time. This means that a company can develop a product targeting a particular group, put the product where target group can access and give prices for the group. The price of the product will correspond to the value the customer feel the product is worth.

Moreover, the company marketing will take note of the time the customer will want to buy such a product. Investigations are important in getting information on what people want and where they buy their products. When producing the item, the company will equate the product with the value of the product and provide the product for them to buy at the critical time in their convenience.

Failure to identify the markets trends can be challenging because products may get negative brand equity. Marketing mix is one of the efficient and useful ways of increasing brand equity. Marketing mix has also been used to refer to decisions that a company makes when introducing a product to the market¹¹.

The product satisfies a need. The product meets the customer’s particular needs. There are features in the product that satisfy the customers’ needs. Features included will impact on the value. Features included are carefully selected. The products include the relevant and affordable features the customer can afford. Costly features that the customer will not use can be avoided.

When developing the product, where and how the product will be used is considered. The product should be easy to use and friendly. Another element considered is how the product looks like. The color, sizes and form are central. The expected experience when the product is used should meet the customer’s hopes.

Naming and branding the products should be recognizable and outstanding for to increase brand equity. The product should be unique and different to be identified from the competitor’s products. The product should be made affordable to the customers and enable the company make revenue¹².

When selecting the correct place to avail the product, the company places the product where the customers can access. The company identifies the kind of stores where the customers look for the products and where they can purchase the product. Depending on the product, the company identifies if the product can be sold as specialized product, online, directly or using a catalogue.

Then the company identifies the appropriate and reliable distribution channel. Marketing the product may require the company to attend trade fairs, avail samples with catalogue companies or use sales force.

One can investigate where the competitors have stocked, mistakes they have done before, what they succeeded in doing and where they market the products. By investigating the competitor, the company will avoid doing mistakes and improve the approach. The company will venture into places with potential customers that have not been reached¹³.

Price is an important factor that customers consider before buying a product. The prices indicate the value that the consumers will obtain from the goods they consume. The company should adhere to price regulations from the government or regulation bodies. The company can review the established price points given to similar products. Customers are sometimes very responsive to prices of the goods and services they consume.

A small reduction in price may cause more buyers to choose the product, while a small increase of price may not be recognized; hence you may gain the advantage of augmented profits. Consider what discounts can be given to special groups in the market or trade partners. Reflect on the price of the product when compared with the competitor’s prices¹⁴.

Promotion will ensure that the message about the product is known. Promotion is concerned with the channels or methods of passing on the message to the target customers. The company will consider different mediums like the press, televisions, bill boards or radio. The company can deem to use direct marketing by mailing, using public relations or the internet.

Depending on the nature of the product, the company can decide if they are required market the product all year round or during a particular season. Environmental factors that may affect the timing of the promotion and sales should be identified.

The marketing mix is a model that helps a company introduce a new product or offer in the market. The marketing mix can be used as measurement for the existing marketing strategy. To apply the marketing mix the company identifies a particular product. Then the 4P’s are used to evaluate the strategy¹⁵.

Brand equity increases the level of recognition. A brand image or symbol is important in identifying a company or a product. When a brand has a positive image in the thoughts of the consumers, then value is added to the particular brand. When planning to increase brand equity, it is necessary to consider evaluating the brand image and may end up developing a new brand depending on the situation.

To increase brand equity, a company may think about adopting new ways of making the brand image known or tray diverse option of making the brand known. Before engaging in any activities for increasing brand equity, the company will get reliable information on whether the brand has a positive or negative image.

The evaluation on brand equity begins with evaluating the existing brand. Some of the factors to consider will include the consistency and if it is recognizable.

Assess if the brand is up to date in terms of how it looks and how it sounds. Review if the brand has any emotional attachment to the consumer. Emotional impact increases brand identity to the target group. Also evaluate if the brand or product is relevant to the target group. Ensure that the message of the brand is consistent¹⁶.

After the evaluation of the existing brand, it may be necessary to adopt a new brand that customer identify and are attached to emotionally. Adopting a new brand will assist in achieving brand equity. The aim of adopting a new brand will be to increase awareness, influence customer to recognize and associate with the brand, get adequate information and decide to purchase the particular brand.

After ensuring that the brand is good and will meet the target customer, the next step is to market the brand. Different ways of marketing the brand can be exercised. New ways of marketing can be effective in increasing recognition of the product. Marketing the product will reach the target customers. The brand should be available to the consumers. Availability, recognition and marketing increases brand equity¹⁷.

There are places where advertisements can promote brand equity. The social networks have spaces for advertisements. The space can be used to place and advertise the product. The space can also be used to discuss the brand. Links can be placed where a customer can purchase the product. Discussions and testimonials can assist popularize the brand. Potentials customers can encourage brand recognition.

New products that feature in contests effective increase the level of recognition to the public and potential customers. Blogs have the latency to increase brand equity. Blogs spots are effective and one of the fastest ways of increasing brand equity. Blogs may contain discussions that may popularize a brand in a group of potential customers.

Sponsoring activities in the community is one of the ways of increasing brand equity. Activities such as sports and community service in the streets make your brand name known by many people in the community. People begin to recognize the product and buy the brand hence increase brand equity.

Another way of marketing is texting the brand. A contest where those texting have a chance of winning a prize can be effective in creating recognition. The brand name will be in the text¹⁸.

New marketing strategies are significant in achieving brand equity. One can consider making the brand known to the young people. This will ensure that the young people grow with the brand. One should constantly engage in market evaluation to detect any change in brand equity.

Constant evaluation will enable one to notice when competition and customers shift to favor another brand. Consequently, changes can be made to retain and increase brand equity¹⁹.

Brand equity can be increased in the case where a product has reached its maturity phase. A product in the maturity phase will have increased competition accompanied by low sales and low level of brand recognition. The domination of a single product in the market and differentiation of products are the major concerns in the maturity phase of the brand equity.

The brand equity can be improved by increasing awareness of the product, going into new markets and enhancing the brand image. When the brand image is enhanced, the product becomes favorable and unique to the particular brand. Some of the brand elements can be improved to enhance the brand image²⁰. Furthermore, the brand can also be repositioned.

Repositioning the brand is effective in influencing customer’s opinion on the particular brand. The opinions over a particular brand enables the customer select the particular brand and perceive that it meets their expectation at the particular time. If the expectation of the customers is met, then repositioning plays the role of additional persuasive points of difference.

Repositioning a brand will ensure that the product is relevant, fashionable and modernized to merge with the lifestyle of the product users. Products that are mature may be viewed as trustworthy. Since the customers trust the product, cases where the customer may consider the product boring should be avoided.

The company can consider adopting a strategy that will place the product free from aggressive competition by emphasizing and making the product unique. The product should meet the customers taste. This can be achieved by making new products, advertising, promotion and packing a new product differently²¹.

Conclusion

Brand equity is as the result of marketing when a product becomes recognizable. Brand equity enables a company increase awareness of the brand and lead to increased revenues. The company direction and expansion of new brands is easier and affordable. Customers become loyal to the brand. Marketing, branding and market communication are some of the underlying theories in brand equity.

Brand equity requires the company to engage in evaluation of the product in the market and make plans to adopt a marketing strategy. Marketing mix is one of the marketing strategies a company can adopt. Marketing mix refers to the 4P’s: place, product, price and promotion. The product should meet the specific needs of the consumer. The product should have a price that can be equated to the value of the product.

The product should be availed in the accessible place where customers can purchase. Marketing mix enables a company introduce a new brand in the market. When marketing mix is used in the correct combination of measures brand equity is achieved. Marketing can be done in the social networks, discussion in blogs, introduce contests, sponsoring sports and advertisement in the media.

Marketing mix assists the company thrives in a competitive market. The brand is consistent, provides quality, satisfies the customers need, is fashionable, is reliable and has affordable prices.

Bibliography

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Bucklin, Randolph & Lattin, James. “A Two-State Model of Purchase Incidence and Brand Choice.” Marketing Science, 10(1991): 24-40.

Choi, Young and Rhee, Khun. “Dimensions of Brand Equity of Luxury Fashion Brands.” Journal of the Korean Society of Clothing and Textiles, (2004): 1007-1018

Chung, Moo. “Antecedents and Consequence of Brand Personality and Brand Equity on Private Brand”. Korea Research Academy of Distribution Information, (2007): 97-120

Clift, Joseph. “Why brand relevance explain brand movement.” Warc Exclusive, (2011).

Gasket, Paul. “Brand Management: brand Ethics.” Admap, (2011): 40-41.

Hardie, Blandworth., Johnson, Elizabeth & Fader, Bruce. “Modeling Loss Aversion and Reference Dependence Effects on Brand Choice.” Marketing Science, 12(1993): 378-394.

Jung, Hyung-Shik. “Building Brand Equity Through Advertising and Evidence Utilization” (Implications for Brand Extension Strategy). Industrial Relations Research, (1999): 158-171

Keller, Kevin. “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity.” Journal of Marketing, 57 (1993): 1-22.

Kim, Yu. and Park. Young-Hoon. A “Conjoint Measurement of Brand Equity with Internet Effect.” Korean Academic Society of Business Administration, (1996): 61-96

Kim, Hoon. “A Study on the Effects of Brands on Products Purchase and Choice.”The Korean Society of Management Consulting, (2008): 155-177

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Mackay Mariso. “Application of brand equity measures in service marketing.” Journal of services marketing, Vol 15, no. 3. (1987): 210-221.

Sng, Mark. “Brand culture.” Admap, (2011): 18-19.

Sung, Yang. and Woo, Sung. “Psychological Approach to Brand Equity: Interaction of Consumer and Brand.” Korean Journal of Consumer and Advertising Psychology, (2000): 39-61

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Footnotes

¹ Moo Chung, “Antecedents and Consequence of Brand Personality and Brand Equity on Private Brand”, Korea Research Academy of Distribution Information, (2007): 97-120

² Kevin Keller, “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity”, Journal of Marketing, 57 (1993): 1-22.

³ Y Yu Kim and Young-Hoon Park, A “Conjoint Measurement of Brand Equity with Internet Effect”, Korean Academic Society of Business Administration, (1996): 61-96

⁴ Randolph Bucklin & James Lattin, “A Two-State Model of Purchase Incidence and Brand Choice”, Marketing Science, 10(1991): 24-40.

⁵ Blandworth Hardie, Elizabeth Johnson & Bruce Fader, “Modeling Loss Aversion and Reference Dependence Effects on Brand Choice”, Marketing Science, 12(1993): 378-394.

⁶ Yang Sung and Sung Woo, “Psychological Approach to Brand Equity: Interaction of Consumer and Brand”, Korean Journal of Consumer and Advertising Psychology, (2000): 39-61.

⁷ Randolph Bucklin, Sanjeev Gupta & Song Han, “Brand’s Eye View of Response Segmentation in Consumer Choice Behavior”, Journal of Marketing Research, 32 (1995): 66-74.

⁸ Jung, Hyung-Shik, “Building Brand Equity Through Advertising and Evidence Utilization” (Implications for Brand Extension Strategy), Industrial Relations Research, (1999): 158-171

⁹ Hoon Kim, “A Study on the Effects of Brands on Products Purchase and Choice”, The Korean Society of Management Consulting, (2008): 155-177

¹⁰ Yu Kim and Young-Hoon, Park, A “Conjoint Measurement of Brand Equity with Internet Effect”, Korean Academic Society of Business Administration, (1996): 61-96

¹¹ Kevin Keller, “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity”, Journal of Marketing, 57 (1993): 1-22.

¹² Harry Vardis, “What is brand identity and how can knowing it increase your bottom line?”, Research review, 13 no. 2 (1998).

¹³ Young Choi and Khun Rhee, “Dimensions of Brand Equity of Luxury Fashion Brands”, Journal of the Korean Society of Clothing and Textiles, (2004): 1007-1018

¹⁴ Paul Gasket, “Brand Management: brand Ethics”, Admap, (2011): 40-41.

¹⁵ Mark Sng, “Brand culture”, Admap, (2011): 18-19.

¹⁶ John Woodward, “Point of view: why brands need the ‘wow’ factor”, Admap, (2011): 7

¹⁷ Les Binet and Sarah Carter, “Mythbuster: brands are not buddies”, Admap, (2011): 9

¹⁸ Pierre Berthon, Pitt Leyland, Ronika Chakrabarti and Paul Berton, “Brand Worlds: From articulation to Integration”, Journal of advertising research, 51, no. 1 (2011): 182-194.

¹⁹ Joseph Clift, “Why brand relevance explain brand movement,”, Warc Exclusive, (2011).

²⁰ Jean Boisvert, “Conceptualization and modeling of the process behind brand Association transfer”, International Journal of market research, 53, no. 4. (2011): 541-556.

²¹ Mariso Mackay, “Application of brand equity measures in service marketing”, Journal of services marketing, Vol 15, no. 3. (1987): 210-221.