MBA Distance Education Learning / Building Brand Equity

Q: Discuss the concept of brand equity?

Ans: Brand equity refers to the value goodwill and image of the brand that is carefully nurtured and marketed over a period of time so consumers feel real value and trust towards that brand.

The added value that a brand brings to a product or service beyond the functional benefits provided. Major asset categories are: brand name awareness, brand loyalty, perceived quality, and brand associations.

Brand Awareness

Awareness refers to the strength of a brand’s presence in the consumer mind.

It is the popularity or the recognition of the brand among potential customers. Like in Indian market Lifebuoy, Colgate, Hero Honda etc have very high level of brand awareness.

.Brand Loyalty

It is belief and faith shown by the consumers towards a particular brand, expressed trough their repeat purchases irrespective of presence of competitive brands. like customer always ask for Zodiac shirt, or Levi’s Jeans

Perceived Quality

It is the quality expected by the consumer in a brand or product. The seller tries to create favorable perceived quality and then matching the perceived quality. like before second world war Japanese products were considered poor and cheap but after that they improved the quality of products. So now we consider their product of good quality.

Q: What are the parameters of Brand Equity Measurement?

Ans: the parameters of Brand Equity Measurement are:

1. Brand Personality
2. Differentiation of brand
3. Brand association
4. Perceived quality of a brand
5. Knowledge- what a brand stands for?

The parameters used by Equity and  Brand Equity Measurement are;

A) Salience: the percentage of respondents who have an opinion about the brand.

B) Perceived Quality

c) Use satisfaction. 

David Aeker suggested “Brand Equity Ten” for construction of a compositeBrand Equity measure. These reflected Brand Equity, market share, sensitivity and usability for all brands and category.

1. Price premium

2. Satisfaction

3. Perceived Quality

4. Popularity or leadership

5. Brand personality

6. Organization association

7. Brand Awareness

8. Market share

9. Perceived value

10. Market price and distribution coverage. 

Q: How does Brand Equity is build?

Ans: Followings are the guidelines proposed for building Brand Equity.

1. Using mix and match brand elements ; brand names, logo, symbols, characters, slogans etc.
2. Creating rich brand image and perceived quality by using product and non-product associations like Reid & Tailors’ James Bond feel, The Royal BMW.
3. Value Based Pricing: Setting prices and discount policies over time to reflect value.
4. Using Secondary Associations like company, channel, other brands, celebrities, endorsers etc.s