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What is Brand Equity?

Article Overview: Brand equity is a marketing term used to refer to the marketing impact of a given product in association with a brand name. It tries to examine how a given product will perform in the market if it did not have the privilege of that brand name.

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What is Brand Equity?

Brand equity, reinforces the significance of a brand's value and produce that positive type of recall in the mind of consumers. Marketing research has revealed that brand equity is one of the most important asset to the company.

Three Perspectives of Brand Equity

As an intangible asset, brand equity only gets its meaning out of the perceived quality and associations made by a consumer on a given product. Brand equity can be viewed in three different perspectives:

• Financial: One way to understand the value of brand equity is to calculate the premium that is placed on a product. To further understand, take for example two types of products: one that is of a recognized brand, and the other is unrecognized brand. Consumers are willing to pay a bigger amount for the branded product over those which they are unfamiliar with.

• Brand Extensions: When certain products attain a certain level of commercial success, most companies consider extending their line by introducing newer products under their brand. Because of the existing brand awareness, these companies will no longer invest on large advertising expenditures just to make that newly introduced product known.

• Consumer-based: The trust and attitude exhibited by a customer towards a given product is impacted by the associations they make with that brand. Oftentimes, these associations are a product of their own experience with using the brand. Therefore, actual experience plays a crucial role in the marketing strategy, especially in a developing brand.

Benefits of a Strong Brand Equity

Not all brand equity is positive, therefore most companies invest on building a strong brand equity. After all, it offers several benefits to the company. Below are just some of the helpful benefits that a company can derive of a good brand equity:

• Establishes a more reliable stream of income.

• By increasing brand equity, companies are also able to increase their profits through increased market share and premium pricing for less promotional costs.

• If you have established a good brand, then you can sell that brand name at a given price.

Managing Brand Equity

There are three stages involved in creating, building, and managing your company's brand equity. They are outlined below:

1.) Your first step involves the introduction of a product of a given brand into the market. You must establish a certain standard for that brand to be able to launch products in the future that will sell in the market. Your aim here is to produce a positive response from the consumer to build trust among consumers.

2.) Try to produce a brand that is unique and yet memorable. The attitude of your brand must be accessible to consumers and must also provide benefits to satisfy its users.

3.) Consistency is the key. Your message must be synchronized with your company's overall image and reinforce the value espoused by your organization. This is one of the most effective ways to build a strong brand equity.

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About the Author: Paul Saunders
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I co-founded 977 Media we work in the online broadcasting sector. We own and operate an online radio network that works with indie bands and artists to help them reach their audiences online. I also do voice overs for commercials and audio spots, the Brit accent helps. Yes I have that accent! I was a FM Rock DJ in Denver on 99.5 The Mountain, was then nationally syndicated from the Rock and Roll Hall of Fame in Cleveland, Ohio. When the Cleveland gig ended Katie and I moved back to Denver in 2008, we missed the Mountains too much. Outside of work, I like to spent time in the open air walking and looking at the scenery. Spending time with friends and getting to know new people is important to me, you could say I'm a people person for sure. I am 53 years old lived in London, England till age 44. Was married, had kids son Darryl and daughter Kayleigh both still in the UK, divorced in 2001 moved here to Denver, Colorado in August 2001. Re-married August 2002 to Katie the love of my life. I love most sports, support the Denver Broncos Colorado Rockies and Colorado Rapids. I also like concerts, movies and sports events. My goals for the future are to get truly healthy, lose some weight and improve my financial future all of which I know is possible. I can help you achieve your personal goals - ask me how!

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