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.