Strategic marketing management

Presentation

TOPIC: WHAT IS BRAND EQUITY ?

What is Brand Equity?
Introduction to brand equity

 Brand equity is a marketing term that describes a brand’s value. That value is
determined by consumer perception of and experiences with the brand.

 Brand equity is the extra value a company gets from a product with a recognizable name, as
opposed to a generic equivalent.

 Companies give their products brand equity through advertising and messaging, making them
memorable and instantly recognizable, as well as maintaining the reliability and quality
expected by their loyal customer base who know and trust the brand. Although it sounds simple,
it takes patience, time and a lot of hard work to build brand positive brand equity

 If people think highly of a brand, it has positive brand equity. When a brand consistently under-
delivers and disappoints to the point where people recommend that others avoid it, it has
negative brand equity.
 When consumers react positively to a brand, the company’s reputation, products and bottom
line will benefit, whereas a negative consumer reaction will have the opposite effect.
Negative effects can diminish both tangibles and intangibles.
Uber, for example, was trending positively in late 2016, but a series of scandals ranging from
sexism to spying negatively impacted its reputation, bottom line and brand equity

Why this equity and value matters ( importance)

 Price premium: Companies can charge more for a product

 Increases market share: Good brand equity results in loyal customers who prefer one
brand over the other and increases its market share.

 Extension of product line: Having positive brand equity, it is easier to introduce new
product lines. For example, Apple started with Mac operating systems and easily converted its
equity with iPhones.
That equity can be transferred and create value for ancillary products, new lines, or sub
brands

 competitive advantage in like-product markets

Positive brand equity
Products or services with positive brand equity deliver value to the
customer based on its quality, experience, durability, availability,
services, warranty and etc. Companies charge more premiums indicate
higher brand equity.

• Companies can charge more for a product with a great deal of brand equity.

• That equity can be transferred to line extensions – products related to the brand that
include the brand name – so a business can make more money from the brand.

• It can help boost a company’s stock price.

• Positive effects return tangible and intangible value – tangibles include profit or revenue increase;
intangibles are brand awareness and goodwill.
Example of Positive Brand Equity

Apple

Apple is the best example of brand equity. Although all product of this brand
has similar features, the loyalty, demand and price premium is higher than
other similar brands.

Apple have always positioned themselves as something different;

they "Think different." Unlike any other tech company

Their consumers don't think: "I want this because it's a Dual-SIM, 64GB, 12-
megapixel hexa-core processing Smartphone.

" They think: "I want this because it's an Apple iPhone."
Customers are more likely to remember—and purchase—
products and services that make them feel good

 Are you familiar with the term unboxing? Put simply,

unboxing is when consumers record the actual process of
unwrapping their newly purchased Apple products. Why?
Because the products make them feel good.

 Apple has a high brand equity:

 Apple mean quality

 stylish generation
 A Lifestyle indicator
 Consumers don’t mind paying a higher premium
Negative brand equity
 Negative brand equity has a worst impact on the company image.

The cause of negative brand image is

 poor quality
 customer bad experience with the product
 bad word of mouth
 poor performance of the previous product and services.

Customers are not willing to buy the products with negative

brand equity because its not equal to the worth of amount.

Negative effects can diminish both tangibles and intangibles.

Uber, for example, was trending positively in late 2016, but a series of scandals
ranging from sexism to spying negatively impacted its reputation, bottom line and
brand equity
 The company in the past was known for high quality
and low to mid-priced cars, but as of recent the
company has had several hits on its brand equity.
This has been due to the company’s braking problems
in its cars. To restore brand equity and bring sales
back to normal, the company has been forced to
launch various ad campaigns. In addition, they have
had to recall all of the faulty cars.
 Components of Brand Equity
 How Brand Equity Develops

Brand equity includes fulfilling the business promise towards

its customers along with maintaining the business-customer
relationship well.

Here are some steps towards building your own brand equity.
 Brand Awareness
The first step of the brand building process is creating awareness of the brand name in the mind of
consumers.
The brand is introduced to its target audience – often with advertising – in a way that gets it noticed.

 Using the same logo or image to ensure your branding is consistent

 Great customer service
 Keeping the brand in front of your market
 Providing ongoing value
 Keeping in touch via email or newsletters
 Tap into social media and share – blogs, tweets, Facebook groups, Instagram photos all help you develop greater
brand awareness.

Brand Loyalty
Brand loyalty is the preference of a brand by the customer over similar products in the
market. This results in repetitive sales and is the best way to spread word of mouth. If a
company has a higher brand loyalty, it can help to reduce marketing cost.

When customers have a warm feeling towards your product, they’re more likely to become loyal customers
and pass the word on. And feel attached to your brand and make repeat purchases
Perceived Quality
 Perceived quality can be defined as the customer’s perception of
the overall quality or superiority of a product or service relative to
alternatives. Quality is something that you need to have from the
start, especially when you are new to the market.

 perceived quality gives a powerful reason for the customer to

consider and buy a specific brand.

 Example: Apple iPhones are renowned for their quality.

Consumers can see and feel it, with time this gets them to trust the
brand and lead to better brand equity.
Brand Preference
When the consumer has a good experience with the brand, it becomes the preferred choice.  this
requires organizations to assure that customers have good experiences and associations with the
brand.

Therefore Brand Equity is the value that the brand carries with it, something that
influences the purchase decision, and how the consumer thinks, feels, and acts
according to the relationship that he has with the brand.

 Brand Experience

This is the aggregation of customer experience with the overall brand. When
customers have the good brand experience they will consider the brand as superior
and will start preferring it over others.

For example, how you feel when eating at McDonald’s? How is the overall inner
environment, how the staff behaves and what is the quality of the food? To provide the same
experience, the company have to maintain uniform standards all over the outlets in the world .
 conclusion
 Building a strong brand is widely recognized as an effective means of securing a
competitive edge and capturing market share. Strategies designed towards brand
building invariably consider brand equity as a key component. building strong brand
equity positively impacts on consumer attitudes and purchase intentions.

 Having brand equity means that a company has successfully differentiated itself from its
competitors in some way. Whether it is superior product quality, excellent customer
service, or an effective marketing campaign.

 Establishing brand equity can have numerous advantages for a company. Brands with
this competitive advantage might enjoy higher revenues as customers pay more for
their product than others, as well as having a larger customer base. Additionally, it is
generally easier for companies with strong branding to expand into different product
lines, since the consumer trust of the brand will follow any new product a company
creates.
With the last example I will
sum up my presentation
 I will make it more clear to you in the following

 Imagine a plain white shirt without a visible mark, what would be its
value in the market? May be 300 or 400?

Now if we add to that same shirt a brand, through a label or logo

visible. Think of something great, a powerful and valuable brand like
Adidas or Nike, now what would be the value of this shirt? Maybe in a
thousands or more?

In short, this difference in value is what we call Brand Equity, that is,
the power and value of a brand when it comes to pricing a product, and
that addition in the final value comes directly from the strength that the
brand has acquired over of time.
 The End

 I would now like to give you the opportunity to ask questions

…

Thank you