Brand Equity: The value put by Brand’s consumers and channel members which permit the brand to earn larger volumes and margins than it would without the brand name and which adds as differentiating factor for the brand over its competitors is defined as the brand equity. The values, consumers associate with the brand are reflected in their brand loyalty. A positive perception of the brand results in brand awareness and less marketing effort. Consumer’s perception of organization and loyalty depend on the value they put on brand which is measured in terms of brand equity which might add value. Brand equity is an intangible asset to the company.
Brand Equity is important for three major reasons:
1. Brand Equity creates shareholder value
2. Brand Equity Building is a competency that can be mastered to create competitive advantage
3. Brand Equity management creates an array of growth opportunities for business.
Frame work for Measuring Brand Equity:
Brand Awareness: Brand awareness is key determinant in measuring brand equity. It measures the ability of customers to recognise a brand and recall the logo, symbol etc to certain associations in their memory. Apart from brand recall and recognition, brand knowledge, brand dominance, brand opinion also is included in brand awareness.
Brand associations: Brand associations consist of all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes and is anything linked in memory to a brand. Associations represent the basis for purchase decision and for brand loyalty.
Brand association can be derived from either the product association or the association with the organization. Product association: can be a result of either the functional benefits of the brand that are tangible features of the product itself or non-functional benefits such as social image, perceived value, distinction