30-01-2013, 04:08 PM
Brand Equity and Brand Associations
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What is Brand?
Brand is a strategic asset that is key to perform long-term performance for a company. Nowadays brand is not all about products or packaged goods but also deals with the ideal processes.
A successful brand is the most valuable resource a company has. So we can say that it is a living organism and should be managed properly. This kind of a proper management provides an emotional link with the customers and the company.
Brands are used as external cues to taste, design, quality, prestige, value and etc. Such as ETİ, ÜLKER, SARAY, BİFA all of these brands have different psychological perception. We percieve these brands because of their quality even though they may taste similar. In other words, consumers associate the value of a product with the brand.
If we make a definiton; a brand is a distinguishing name, symbol, sign, design, figure or all of them intended to identity the goods and services of either one seller or group of sellers to differentiate those goods and services from compertitors’. Among some of the strong brand in the world are; Disney, CocaCola, Nike, Microsoft, Sony, Nestle, Mercedes...
A brand signals to the customer the source of the product and protects both the customer and the producer from competitors’ identical and / or similar products.
Consumers associate the value of the product with the brand. The underlying value of a brand is often based upon specific associations of a “use context”. Such as Becel margarine that protect the heart may influence customer decisions and provide a strong reason to purchase those products. Similarly, Kalbim Benecol or Yovita are aslo helath care products which consider “use context”.
What is Brand Equity ?
Brand equity, basically, is a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm’s customer.
If the brand’s name and smbol should change, some or all of the assets or liabilities could be affected an deven lost, altough some might be shifted to a new name and symbol. The assets and liabilities on which brand equity is based will differ from context to context.
Brand equity can be grouped into five categories:
Brand Loyalty
Name Awareness
Percieved Quality
Brand Associations
Other Brand Assets
Brand equity has a value both for the customer and the company. Let me tell you what it means for the customer.
What is the value for the customer?
Brand equity help customers to interpret, process and store huge quantities of information about products and brands. It can also effect the customers’ confidence in the purchase decision.
Potentially more important to fact that the perceived quality and brand associations can enhance customers’ satisfaction with the use experience.
What is the value for the company?
Brand equity has the potential to add value for the firm by generating cash flow.
Brand equity can enhance programs to attract new customers or recapture old ones.
By perceived quality, the associations and the well known name can enhance brand loyalty and provide reason to buy which can affect use satisfaction.
Brand equity will usually allow higher margins by permitting both premium pricing and reduced reliance upon promotions. (An average Nike sneakers cost around 75 – 100$ where as aless known brand would sell for half of this price.)
Brand equity provide a platform for growth via brand extentions. Sütaş such as, yogurth or milk has many flavors and varieties they keep extanding to new product. As you may recall there are strong wars for shelf space in the supermarket. Those brands there are strong and well known brands have an prominant advantage over weak ones.