What is brand equity and brand value, and why are they important?
Brand equity is the levels of ‘sway’ a brand name has in consumers minds- leading to an identifiable and well-thought of brand; whereas, brand value is simply the financials, the sum total of how much people are willing to pay a particular brand over others. For example, Heinz Beans, have a massive sway in consumers minds, it’s one of , if not the most popular brand of beans (and while we’re here, ketchup too), and millions of people will decide to pay that little extra money for the brand. While yo might think equity and value come hand in hand, having a positive value, doesn’t automatically give you strong brand equity.
So, now we know what equity and value is, and how they differ, how do we measure them?
Measuring brand value is rather straightforward, but meaning equity can be tricky. Equity is a set of assets (or liabilities) such as brand disability, brand associations and customer loyalty- all things that can add or subtract from the current brand position.
Brand Visibility is the awareness and credibility in regards to a customer need- as a brand, you should be aiming to be the first name that a consumer thinks about when trying to fulfil a specific need or want. If your brand doesn’t come to mind, it isn’t relevant to consumers, it won’t be considered in the first place.
Brand Associations is absolutely anything that has made a positive or negative impact/feeling towards your brand. This could be functional benefits, but even brand personality, emotions and social benefits (just to name a few.)
Finally, customer loyalty means a steady flow of business from consumers, because they are loyal to your brand. When building your brand budget, customer loyalty priority needs to be thought about- these are the people who believe your brand is worth the extra expense.
There are multiple ways your company can improve the over value of its brand- short and long term. Short term, start to look at Attracting are customer through awareness and reassurance, signals regarding commitment of brands and clearer communication of what your brand is, and any other information that consumers would want to know about you.
Long term is building up your equity; looking to the future, you should be estimating the brand role in your business, how are you going to split your brand onto each of your products, and how is this going to help you sell product? Another approach is to look at case studies. Much like with Heinz, see how they have become a household name, or how Apple has managed to reach this innovative reputation world wide.
To last in a competitive market, brands find a way to create lasting value in consumers mind, instead of solely focusing on selling and competing on price.
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