How to Build Brand Equity. Part 1.

September 18, 2018

What is Brand Equity?

Brand equity is often a term associated with companies that provide a certain customer value, perception and association. When it comes to brand equity, it may be the single most important aspect to products or services. Positive brand equity, a high quality perception and association of a brand will eventually lead to enhanced overall quality. In reference to consumer perception, “if a product or service doesn’t live up to your company’s expectations, your business isn’t going to get very far”.  It is important to keep in mind how your company’s brand is seen by consumers, how they perceive it and how they acknowledge it in reference to competition. Not only does perception have an effect on the overall brand image, but the profit, loss and success of the company as well. brand equity image 1    

Positive Brand Equity

Having a positive brand association can ultimately lead to enhanced consumer relationships and customer loyalty. When a brand has high customer loyalty, it will lead to less doubt of a company to in turn recruit more of those loyal consumers. Having a positive connection and association with a brand will benefit the customer-brand relationship. With an enhanced connection, customers are “usually more willing to buy more products and services from that company”(Horne, 2015). One specific brand that has an incredibly high customer loyalty is Target Department stores. Target offers high-end quality consumer goods such as clothing, toiletries, food, health and others, providing a top-notch customer experience. Companies like Walmart, Kroger and Costco can be considered Target’s main competition, but consumers often choose Target over the competition due to its overall quality and brand image. The brand image of Target, “typically appeals to more affluent customers by emphasizing high-quality merchandise and low-cost designer fashion” (Investopedia, 2015). Target often relies on its brand image to surpass its competition to continue maintaining its loyal customer base.

Positive Equity = Opportunity

Not only will a positive brand equity lead to an overall positive association, but lead to more opportunity for the brand. With a high loyalty and consumer base, a brand is better able to expand its products and services as well as maintain or increase prices of those products and services. When their customers remain loyal to their brand, the price of the product or service rising slightly is not enough for them to run away from the brand altogether and reach for their competition. Apple is one brand that exemplifies high brand equity even when the prices of the product may not be the lowest on the market. Apple compared to tech companies like Microsoft may be selected over the competition due to the high brand loyalty and consistent brand message across all products. Consumers know that Apple is technologically advanced and has products that will perform well, therefore they are more likely to splurge on Apple products rather than save money on brands they do not necessarily trust.

Knowledge, Preference and Financial Metrics

Brand equity is a vital factor in brand marketing and maintaining a strong brand image is important to the overall success of a company. Securing positive brand equity should be the ultimate goal for all brands to ensure the best consumer perception and customer loyalty. The emotion and relationship that comes along with a brand should be consistent in order to understand the overall brand image. The ultimate measure of a successful company is to understand and comprehend the feelings that come from your brand in the consumer’s eyes. Within those measures you need to understand knowledge, preference and financial metrics to fully understand your brand equity potential.  

Categories: Brand Development