The term brand equity might at first seem like it is a complicated concept but in reality it is very simple and easy to understand. The term refers to the innate value of having a well-known brand name and it is mainly used in the marketing circles. The concept is based on the idea that a company that its brand is known by many people are at a better position of selling a product or service under that brand compared to other companies that their brands are not known that well. Brand equity can be defined by using a number of factors, but most are found in the following three main headings;
– Lower marketing costs
– Trade leverage
– Attraction of new customers through awareness and reassurance
– Enough time to respond to competitive threats
– Provides an anchor in which other associations can be attached to
– Familiarity which will lead to preference and liking
– Visibility which will help in gaining some considerations
– Signal of the firm’s commitment to the needs of the customer
Brand Association (includes the perceived quality)
– Helps in communicating information
– Gives the customer a reason to buy
– Differentiated position in the marketplace
– Creation of a positive attitude and feelings
– Creation of a basis for further extensions
What Should I do to Maximize My Brand Equity?
Creating Distinctive Assets
The assets will mostly be the products you are offering to the customers. You might be thinking that the product you are offering your customers is one of a kind, but remember there are millions of businesses out there and this means there is a high chance there is at least one that will offer the exact same idea as you. Instead of focusing on ways in which your product can become unique, look at ways you will be able to make it distinctive. For it to be distinctive, the assets should be able to evoke your brand, and your brand only, you won’t have to give any further prompting. If you show a person a picture of a 2-dimensional apple, a yellow shell with red outlines or the Michelin man, they will get the brand without having to provide any more information. Once you have achieved this, that’s when you know your brand asset is really distinctive, such as Big Yellow Feet.
Adapting and Differentiating Yourself
For you to truly set yourself apart from the other brands, you need to be flexible when there is change. A good way in which the company can show consistent brand strength is by adapting to the market changes in the market and continue being different from your competitors. If you prove that you are better than your competitors, then you can go ahead and command the premium price you wish charge. Businesses that have a lower brand equity will go into price wars when they aren’t able to justify the prices for inferior goods. A good way a business can do this is providing a collection of complementary products around the core offerings. This can be seen mainly in apple products. The core product is the phone, tablet or computer, once you buy the core, they will offer other products like software, cases, or charger.
Pay Close Attention to Any Change and Progression
For every successful company like Coca-Cola, Microsoft or Apple, there are hundreds of failed companies and brands. The common characteristics in the failed brands is the failure to recognize the changes in the marketplace and adapt with them. Doing the things you have been doing just because you’ve been doing it and it worked will be the sure way to fail. You should listen to what the marketplace is trying to tell you. Making adjustments to your company in terms of products and marketing techniques and understand what your customer wants. This will in the process create a strong brand equity that will last.