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Branding and Brand Equity

Discuss Branding and Brand Equity within the Marketing Management ( RM , IM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; Branding is mostly about building and maintaining brand equity. Brand Equity is a set of brand assets and liabilities linked ...



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Branding and Brand Equity
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Sunanda K. Chavan
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Branding and Brand Equity - September 16th, 2010

Branding is mostly about building and maintaining brand equity.

Brand Equity 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 without the brand identified.

Brand equity and brand value come from keeping the promise.

“Brand equity” refers to the value of a brand. Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations.

Brand equity also includes other “intangible” assets such as patents, trademarks and channel relationships.
A brand has certain attributes and values linked to it.

Brand equity is the assortment of qualities that differentiates the brand from other commodities.

Brand equity facilitates the brand in gaining sustainable competitive advantage in the market.

Proper management of the brand equity is essential for the success of the brand in the long run
People are willing to spend more for a brand due to the perception it creates.

The brand may generate a perception of quality, exclusivity, value, or even a sense of community.

The brand, its image, and its equity all allow the customer to perceive a promise of value, accept and buy into a suggestion of quality, and have confidence in the purchase decision.

Together, the brand provides competitive advantages in the marketplace, one of which is the ability to have higher prices and larger profit margins. Brand is a key factor in the purchase decision of consumers.

Brand equity, in its working form in the consumers mind and marketplace, is by and large an emotional asset. Deals and sales come and go, but brand equity can last, if properly managed and protected.

Brand Equity: Coca-Cola and Kodak.The need to select a brand name that could be as effective internationally as nationally was a factor that was appreciated early on by companies.

It is interesting to examine the ways in which some of the most famous names originated and to see to what extent they have actually become effective in the many different languages of the world.

Two well-known brand names that were created within a year or two of each other (both in the United States) are Coca-Cola and Kodak.

The first of these is a meaningful name, while the other has no meaning.

The name Coca-Cola is based on two of the product's original constituents extracts from coca leaves and from the cola nut.

Sales of the drink grew so rapidly that its name was soon popularly shortened to Coke.

The product is today unique in having two equally well-known brand names; one chiefly used for the international market (Coca-Cola) and the other one mainly adopted by English-speaking consumers (Coke).

Both names are, however, of identical legal status in most countries.

Even so, the fact that there are now many types of cola drink on the market constantly prompts the company to remind the public of the interconnection between the two names.

Hence the clever slogan of the mid-1980s – 'Coca-Cola is Coke, Coke is Coca-Cola'. "Brand equity refers to the value inherent in a well-known brand name".

It only exists if income streams over and above the average for the sector or segment result from putting a particular brand name on a product or service.

Regardless of the measures selected, it is essential that managers track their brand equity on regular basis. Managers are continually striving to fine-tune their strategies over the brand's life cycle.

To effectively measure brand equity, managers need to appreciate that brand equity is a dynamic concept and thus it needs tracking.

The dynamic nature of brand equity can be appreciated from a particularly helpful evolutionary model developed by Gordon and his colleagues (1994), When a new brand is developed, it initially exists only through its physical characteristics.

For the brand to be born, two decisions must be taken: a brand name and a positioning strategy must be agreed.

The former is critical because it contributes to the brand identity and can also communicate information about the product performance or ease of use.

Brand names, on the other hand, started to develop little more than a century ago and many of them have been in existence for a much shorter time than that.

Meanwhile, the creation of new brand names continues, and although methods of devising and selecting them that are infinitely more sophisticated today that at any previous time.

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