Brand Equity

What is a ‘brand’?A brand is a “name, term, sign, symbol, design or a combination of them intended to identify the goods and services of one seller or group of sellers and differentiate them from those of competition”.- American Marketing Association.

Difference between a product and a brand

A product is something that is made in a factory; a brand is something that is bought by a customer.

A product can be copied by a competitor, a brand is unique.

A product can be quickly outdated whereas a successful brand is timeless.

A brand is something that resides in the minds of consumer.

The role of a brand (Consumers)• Identification of the source of the product• Assignment of responsibility to product maker• Search cost reducer• Promise, bond or pact with product maker• Symbolic device• Signal of quality

The role of a brand (Manufacturer)• Means of identification to simplify handling or tracing • Means of legally protecting unique features• Signal of quality level to satisfied customers• Source of competitive advantage • Source of financial returns

Brand EquityBrand equity is the added value that endowed to products and services. This value may be reflected in how consumers think, feel and act with respect of that brand, as well as the prices, market share and profitability that the brand commands for the firm.

Brand equity is an important intangible asset that had psychological and financial value to the firm.

Brand Knowledge

Knowledge

Thoughts

Experiences

BeliefsImages

Feelings

World’s 6 most valuable brands 2014

Brand Brand Value (Billions $ )

Company Advertising (Millions $)

Industry

1 Apple 124.2 1,100 Technology

2 Microsoft 63.0 2,300 Technology

3 Google 56.6 2,848 Technology

4 Coca-Cola 56.1 3,266 Beverages

5 IBM 47.9 1,294 Technology

6 McDonald’s 39.9 808 Restaurants

7 General Electric 37.1 - Diversified

Source: Forbes

Customer based approaches to Brand Equity• The brand is viewed from the perspective of the

customer, an individual or an organization. • The power of the brand lies in what customers have

seen, read, heard, learned, thought and thought about the product over time. • A brand is said to have positive customer brand equity

when consumers react more favourably to that brand.• A brand is said to have negative customer brand

equity when consumers react less favourably to that brand.

Brand Equity Models:Brand Asset Valuator

It is developed by Advertising agency Young and Rubicam (Y&R)According to BAV, there are four pillars of brand equity:-

DifferentiationRelevance EsteemKnowledge

Differenciation and relevance point to the brand’s future value and Esteem and Knowledge reflects to the past performance of the firm.

Aaker ModelViewed by UC-Berkeley professor David Aaker.There are set of 5 categories of brand assets and liabilities which add value to the product. They are:

Brand loyaltyBrand awarenessPerceived qualityBrand association Other proprietary assets

BrandzDeveloped by marketing research consultants Millward and WPPAs per this model, brand building involves series of steps and the objectives of those steps are based on the following:

Presence Relevance Performance Advantage bonding

Measuring brand equityThere are two approaches to the measurement of brand equity. Indirect approach and direct approach

• Brand audit: It is a customer-focused exercise that involves a series of

procedures to access the health of the brand, uncover its sources of equity and suggest ways to improve and leverage its equity.

Brand Tracking: Tracking studies, collect information from the consumers on a

routine basis over time. Tracking studies employ quantitative study methods.

It provides a basis for decision making It provides insights to marketing activities.

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