A Case Study On Brand Equity Marketing Essay

Published Date: 23 Mar 2015

Brand equity can be viewed both as an intangible or tangible asset and or liability. The tangible being the monetary value of a brand and best viewed as the amount of additional income expected from a branded product over and above what might be expected from an identical, but unbranded product. To best illustrate this point would be a supermarket, they frequently sell unbranded versions of name brand products. The branded and unbranded products are produced by the same companies, but they carry a generic brand or store brand label like No Name or Home brand. Store brands sell for significantly less than their name brand counterparts, even when the contents are identical. This price difference is the monetary value of the brand name.

However, according to (Aaker,1996) the most important assets of any business are intangible: its company name, brand, symbols, and slogans, and their underlying associations, perceived quality, name awareness, customer base, and proprietary resources such as patents, trademarks, and channel relationships.

The intangible value associated with a product that can not be accounted for by price or features is illustrated by globally renowned company Nike. I has created many intangible benefits for their athletic products by associating them with star athletes. Children and adults want to wear Nike's products to feel some association with these star athletes ("be like Mike." ) The marketing image that has been created for Nike is the driving force of the demand for the products rather than the physical features. Buyers are willing to pay extremely high price premiums over lesser known brands which may offer the same, or better, product quality and features.

Ideally brand equity is a set of assets (and liabilities) linked to a brand's name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm's customers.(Aaker,1996) These assets, which comprise brand equity, are a primary source of competitive advantage and future earnings. (Aaker, 1996)

The overall description of Brand Equity incorporates the ability to provide added value to company's products and services. This added value can be an advantage to charge price premiums, lower marketing costs and offer greater opportunities for customer purchase

The assets/ advantages of brand equity:

Allows you to charge a price premium compared to competitors with less brand equity.

Strong brand names simplify the decision process for low-cost and non-essential products.

Brand name can give comfort to buyers unsure of their decision by reducing their perceived risk.

Maintain higher awareness of your products.

Use as leverage when introducing new products.

Often interpreted as an indicator of quality.

High Brand Equity makes sure your products are included in most consumers consideration set.

Your brand can be linked to a quality image that buyers want to be associated with.

Offer a strong defense against new products and new competitors.

Can lead to higher rates of product trial and repeat purchasing due to buyers' awareness of your brand, approval of its image/reputation and trust in its quality.

Brand names are company assets that must be invested in, protected and nurtured to maximize their long-term value to your company. Brands have many of the same implications as capital assets (like equipment and plant purchases) on a company's bottom line, including the ability to be bought and sold and the ability to provide strategic advantages.

Although in the rush to compromise brand for short term performance a badly mismanaged brand can actually have negative Brand Equity.

Potential customers may have such low perceptions of the brand that they prescribe less value to the product than they would if they objectively assessed all its attributes/features.

One of the best examples of Brand Equity is Coca-Cola. Without a brand name and all of the marketing dollars that have gone into it probably would never have taken off. Due to the company's long-term marketing efforts and protection, enhancement and nurturing of their brand name, Coke is one of the most recognizable brands in the world.

However if handled improperly and someone suddenly took their brand name and Brand Equity away from them, Coke would lose hundreds of millions, if not billions, of dollars. This includes lost sales, lost marketing dollars and lost promotions, additional marketing costs to promote a new brand, and significantly lower awareness and trial rates for their new brand.

In the same field as Coca Cola is Pepsi, a few years ago Pepsi undertook a multi-million dollar advertising campaign in which they tried to associated and build a brand image around the famous Michael Jackson. At the time it was a good idea a way of consumers of identifying with a celebrity the same way in which Nike was successful with Michael Jordan Pepsi hoped to that building an image to associated with Pepsi would increase sales however a month or so after the commercial was released Michael Jackson started receiving unfavorable press. Pepsi in turn pulled the commercial and would have suffered not only the monetary loss of now not paying for and not being able to use the commercial but also the loss of brand image and would have been opened to bad customer perception.

However in today's market consumers are becoming increasingly more value centered opting to make the switch from luxury and prestige to lower cost brands.

The basic reason for sensitivity for value and price is due to the fact that so many competitors are entering the market with similar products and market price. So existing competitors are fighting back with sales promotion instead of quality and as a result, customers come to believe that the brands are not very different; brand loyalty erodes, and customers focus on features and price. As fewer and fewer customers are willing to pay the historical brand premium, market share starts falling (sometimes dramatically) for those who maintain their price levels. New technology is also paving ways for new competitors in different markets so the traditional products and service tend to lose their market share.

By strengthening the dimensions of brand equity, we can generate brand equity.

Understanding the brand equity phenomenon properly requires tapping the full

scope of brand equity, including awareness, perceived quality, loyalty, and

The definition perceived quality as "the consumer's [subjective]

judgment about a product's overall excellence or superiority" (p. 3). Personal

product experiences, unique needs, and consumption situations may influence the

consumer's subjective judgment of quality. High perceived quality means that,

through the long-term experience related to the brand, consumers recognize the

differentiation and superiority of the brand. we can identify perceived

quality as a component of brand value; therefore, high perceived quality would

drive a consumer to choose the brand rather than other competing brands.

Therefore, to the degree that brand quality is perceived by consumers, brand

We can define brand loyalty as "a deeply held commitment to rebuy or

re visit a preferred product or service consistently in the future, despite

situational influences and marketing efforts having the potential to cause

switching behavior". Loyal consumers are believed to show more favorable responses to a brand than nonloyal or switching consumers do.

Brand loyalty makes consumers purchase a brand routinely and resist switching to

another brand. Hence, to the extent that consumers are loyal to the brand, brand

Brand awareness with strong associations forms a specific brand image. Aaker

(1991) defines brand associations as "anything linked in memory to a brand" and

brand image as "a set of [brand] associations, usually in some meaningful way"

Brand associations are complicated and connected to one another, and

consist of multiple ideas, episodes, instances, and facts that establish a solid network of brand knowledge. The associations are stronger when they are based on many experiences or exposures to communications, rather than a few (Aaker 1991;).

Brand associations, which result in high brand awareness, are positively related to brand equity because they can be a signal of quality and commitment and they help a buyer consider the brand at the point of purchase, which leads to a favorable behavior for the brand.

When dealing with two products there is always a perceived quality or image that goes hand in hand with a branded product. For example all consumers have an impression of what Levis conveys about a product, but they do not have a similar impression about what no-name conveys.

Levis brand equity is the extra value embedded in its name, as perceived by

the consumer, compared with an otherwise equal product without the name

In summary, high brand equity implies that customers have a lot of positive and strong associations related to the brand, perceive the brand is of high quality, and are loyal to the brand.

Customer-based brand equity is defined as the differential effect of brand knowledge on consumer response to the marketing of the brand. A brand is said to have positive (negative) customer-based brand equity when consumers react more (less) favorably to an element. Customer-based brand equity occurs when the consumer is familiar with the brand and holds some favorable, strong, and unique brand associations in memory.

Brand personality attributes may also reflect emotions or feelings evoked by the brand.

Benefits are the personal value consumers attach to the product or service

attributes--that is, what consumers think the product or service can do for them.

Brand knowledge is defined in terms of brand awareness and brand image and is conceptualized according to the characteristics and relationships of brand associations described previously. Consumer response to marketing is defined in terms of consumer perceptions, preferences, and behavior arising from marketing mix activity (e.g., brand choice, comprehension of copy points from an ad, reactions to a coupon promotion, or evaluations of a proposed brand extension). (Keller,1993)

Consumers will usually form their own opinion, experience and conditioning to a degree and relate back to that when making a purchase. These associations will have an impact on their purchasing habits whether it be favorable or not. It will also have an influence on the people around them and vice versa. i.e. when two friends go out shopping and one asks an opinion on a purchase the friend can say one of two things "oh yes that label is very fashionable it's very in" or "no way, that label went out last season, the fashion magazine says its very out of date." This illustrates how brand equity and association can work for against products and services.

Thus, according to this definition, a brand is said to have positive (negative)

customer-based brand equity if consumers react more (less) favorably to the

product, price, promotion, or distribution of the brand than they do to the same marketing mix element when it is attributed to a unnamed version of the product or service. Favorable consumer response and positive customer-based brand equity, in turn, can lead to enhanced revenue, lower costs, and greater profits.

The only time brand equity can be viewed as an unfavorable event is when it has been managed incorrectly i.e. bad publicity, experiences and image, will it have a negative impact on sales and customer perception also when it is not maintained and revamped to change with the times and new technologies.

Aaker, David A. (1982), "Positioning Your Product," Business Horizons, 25 (May/June), 56-62.

(1991), Managing Brand Equity. New York: The Free Press.

Keller, K (1993) "Conceptualizing, measuring, managing customer-based brand equity" Journal of Marketing, Jan93, Vol. 57 Issue 1, p1

Rainer, D (Oct 1995)"Some handy hints on patents and trade marks," Asia Business Review

http//msc.citywest.unisa.edu.au/JEMS_articles.html

, 5th ed., Prentice-Hall, London.