The increase in the competition has eventually altered the buying habits as well as purchasing decision-making process of the consumers. In addition, these have put more weight on the brand as opposed to any other product feature. This has not merely made the brand as one of the most significant assets of the company but has also made digital marketers include strategies to build a strong positive brand equity.
You may not think that one of your company’s most valuable assets is something which you are not able to see, touch or find on your balance sheet. However, your “brand” – what the outside world thinks and feels about your company based upon what they’ve seen, heard or experienced – is critical to your success.
The Definition Of Brand Equity
The extent to which your brand generates positive thoughts and feelings is referred to as “brand equity,” and it can add significant value to your business. One of the fathers of modern branding, David Aaker, defines the term as a collection of brand assets and liabilities that are associated with a brand name and symbol, which add to or subtract from the value supplied by a product or service.
When an organisation has positive brand equity, customers are willingly pay a higher price for its products even though they could be able to get the same thing from a competitor for less. Customers, in effect, pay a higher price to do business with a firm they know and admire. As the company with the brand equity does not sustain a higher expense than its competitors in order to produce the product and bring it to market, the difference in price goes to their margin. The firm’s brand equity enables it to make a bigger profit on each sale.
What Are The Components Of Brand Equity?
Brand equity usually is dependent on brand awareness, loyalty, perceived quality, strong brand associations and other assets such as patents, trademarks, and channel relationships. It involves fulfilling the promise the business has made to the customers and maintaining the relationship well.
The first step of the brand-building process is to create awareness of the brand name in the mind of consumers. This means that customers are conscious of the brand and able to link it to a particular category. Establishing brand awareness can help digital marketers to increase brand visibility to the target audience through various advertising campaigns.
Brand association is everything that a customer relates to their favourite brand. Getting into interaction with brands permits such associations. Having a great brand association is important as it leads to repeat sales and provides the business with word-of-mouth marketing. Such associations are tapping into the brand and give a difficult time to new entrants into the market.
This is the combination of customer experience with the total brand. When customers have a good brand experience they will have a look at the brand as superior and will start favouring it over others..
Fulfilling brand promise is the key to robust brand equity. Customers tend to compare brands with other comparable brands in accordance with the principle of various quantitative and qualitative parameters. Quality perception also influences the pricing decision of a company. If a company produces quality products, it can apply luxury of premium pricing.
Leveraging your company’s brand equity is a part of brand management.
If you would like to learn additional information about this area of marketing then you need to do our Brand Management Course. For more information, please follow this link.
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