BRAND EQUITY

Brand Equity what is it?

BY SHILLA FLORA.M. BAPRM 42669(31^st May)

Brand equity is the value of the brand in the marketplace. Simply put, a high equity brand has high value in the marketplace. However, what this means exactly is often not fully or clearly understood. High brand value, a brand with high equity, means that the brand has the ability to create some sort of positive differential response in the marketplace. This can mean that your brand is easily recognizable when encountered in advertising or seen on a yard sign. It can mean that your brand is one of the first ones recalled when a relevant prompt is used “who would I call to discuss listing my house?”It could mean that individuals would be willing to pay a premium price for your brand’s offering. In the case of a real estate transaction, individuals would pay a standard commission and feel as if they received a valuable high quality service from a well known and trusted brand. It could mean that when someone asks for a referral, your brand is the first one that is recommended to others. All of these are positive responses to the brand a readily recognizable brand, a brand that is recalled quickly and easily when needed, one that individuals are willing to pay a premium price to acquire, and a brand that is recommended to others.

These are all characteristics of a high equity brand. But, how is this overall positive response created?

What creates this positive response?

So if brand equity is simply the value of the brand in the marketplace and this value is the positive differential response to the brand, what is it that creates this response? The answer to this question lies in understanding the source of the brand’s value. Essentially, where does brand equity reside? An interesting question to ask anyone with a decent understanding of business and financial statements would be “where on the financial statements is brand equity listed?” The answers you would hear would vary from “in retained earnings “to “it’s listed as goodwill” or “I’m not really sure.”

When your brand is well known, has high brand awareness, it is easily recognized in the marketplace and easily recalled when faced with a brand related need.

A high level of awareness with your target market is a necessary dimension for a strong brand. Well known brands must also carefully manage what it is they represent their image.

Given that a brand is a perceptual entity, it is not surprising that when we think of brand image we use psychology to understand this concept. The brand’s image, what is known about the brand, is information and associations with the brand stored in your memory.

When you see an ad or a yard sign, recognition of the brand leads to the retrieval of these associations from memory.

Managing Your Branding Elements to Create a High Equity Brand

You create these associations in everything you do advertising messages, logos, names used, segments served, etc. If you use a statement in your advertising that you are the “Team to Trust” you hope that “trust “will become a brand association.

If you serve a specific segment, then that segment is likely to become associated with your brand.

Everything you do in terms of marketing and actions creates brand associations.