We all hear it, many of us say it, but not all understand its true meaning, more like a buzz word.
This week, my Brand Nugget masterclass is focusing on key learnings in the school of brand marketing.
Simply put, brand equity is the total experiences, connections, emotions, loyalty culminating in values consumers place in their minds about a particular brand as against its competitor. It places undue advantage on a brand in the competitive market. Every organisation wants to grow its products into a brand that commands strong brand equity.
When customers attach a level of quality or prestige to a brand, they perceive that brand as worthy more than products made by competitors, so they are willing to pay more.
In a published marketing treatise in the current online edition of Marketing Evolution titled, ‘Brand Equity: What it is & Why it is key to your business’, brand equity is described as “the level of sway a brand name has in the minds of consumers, and the value of having a brand that is identifiable and well thought of. Organisations establish brand equity by creating positive experiences that entice consumers to continue purchasing from them over competitors who make similar products.
“Brand equity is typically attained by generating awareness through campaigns that speak to target-consumer values, delivering on promises and qualifications when consumers use the product, based on loyalty and retention efforts. Brand equity is the added values to a particular name”.
Key elements of brand equity
- Brand loyalty. This component measures the support that customers have toward a brand.
- Brand awareness. How strong can consumers identify your brand, and how much values they associate with the brand in the market. However awareness can be for positive or negative reasons?
- Perceived quality. What are the key differentiating offerings, attributes that stand your product brand out?
- Brand associations. These are florid of thoughts, imagery, feelings that rush through the minds of consumers when a business and its products are come across or mentioned. They influenced the power of recalls..
- Proprietary assets. These are exclusive attributes that strengthens the brand DNA. They can be everything from unique taste, design, names and taglines to patents and trademarks. Examples are too numerous to mention. They include: Coca-Cola, Mercedes, Porsche, iPhone, MTN, Airtel, GTBank now GTCo etc. Such brand commands tangible and intangible values built up in the minds of consumers. Peak milk, for instance, is assumed to be the best evaporated milk in the Nigerian market, the owners of Peak milk is aware of this and they have been leveraging it for years. When they have brand extension, they do not need to advertise so much, the trust in the Masterbrand will push the new addition in the market.
All the key elements of brand equity confer prestige, premium, uncommon values, and class on their consumers. The brand owners are deliberate in their marketing by positioning the brand at the high end of the market, and to specific target audience.
Porsche 911 Turbo
Advantages of brand equity
When you develop your personality, corporate, product or service brand into equity, there are so many benefits that will impact your bottom-line.
- It increases profit margin. There is a brand cult followership that are ready to pay any amount to purchase or patronize the brand. When a company has high positive brand equity, the perceived value of its products and services goes up compared to those of competitors and/or a generic alternative even if they are all offering same users experience.
- It maximises high customer retention: The higher the positive brand equity the higher the customer retention capability. Brands in this category don’t spend more on marketing, they only spend on customers appreciation or customers loyalty experiential activities.
- It engenders brand trust. One of the key elements of brand equity is TRUST a major ingredient in customers’ retention. No matter what the brand dishes out, its customers will buy into it, own it, defend it and make it their lifestyle brand possession.
- It increases sales. Everybody that wants to show class will want to buy the brand irrespective of what it dishes out. iPhone for instance is in a class of its own with its loyal fans. Anytime a new series comes out, the brand enthusiasts are eager to return the old version in exchange for the latest, or purchase the latest version in addition to the old version without being prompted by advertising or sales promo.
The whole essence of marketing efforts should be geared towards developing your services and products into brands that command strong equity. The advantages makes marketing easy, and business objectives easily achievable.
Till next week, let your brand speak its values..
Odusote Mnipr, Arpa, is a Partner at CMC Connect LLP, Perception Consulting, Lagos, Nigeria.. He can be reached on +2347031233752
