Intangible asset of added value or goodwill that results from the favorable image, impressions of differentiation, and/or the strength of consumer attachment to a company name, brand name, or trademark.[1]
Three perspectives from which to watch brand equity
Financial: One way to determine brand equity is to measure the premium of a brand. This question, “How much more are consumers willing to pay for a brand?”, is used to measure premium of a brand. [2]
Brand extensions: A successful brand can be used as a platform to launch related products. Companies can reduce advertising expenditures and lower risks of making new products by capitalizing on awareness of their brand.[3]
Consumer-based: Attitude strength is built by experience with a product. A strong brand increases the consumer’s attitude strength toward the product associated with the brand. The consumer’s awareness and associations lead to perceived quality, inferred attributes, and ,eventually, to brand loyalty.[4]
Jean: “Pastene tomatoes, I always buy those, they are the best.”[5]
Karen: “I use Mary Kay everything…I think Mary Kay is responsible for how my skin looks now…I really can tell the difference."[6]
Vicki: “I knew from experience that Crest was most effective for, you know, the enzymes in my mouth.”[7]
3) Brand equity is an asset that can be sold or leased[11]
Protecting Brand Equity
The marketing mix should focus on building and protecting brand equity. For example, if the brand is positioned as a premium product; 1) the product quality should be consistent with what consumers expect of the brand, 2) low sale prices should not be used compete with what consumers expect of the brand, 3) the distribution channels should be consistent with what is expected of a premium brand, and 4) the promotional campaign should be consistent with what is expected of a premium brand, and 5) the promotional campaign should build consistent associations. Finally, potentially dilutive extensions that are inconsistent with the consumer’s perception of the brand should be avoided. Extensions also should be avoided if the core brand is not yet sufficiently strong.[12]
References
Belch, George E. & Belch, Michael A. (2011). Advertising and Promotion 9th Edition. New York: McGraw-Hill/Irwin
Susan Fournier. Consumers and Their Brands: Developing Relationship Theory in Consumer Research. The Journal of Consumer Research, Vol. 24, No. 4 (March 1998), pp.343-353
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