Brand Equity

Brand Management
Module II
 Brand equity
• Brand equity is the name given to the value of a company’s
brand. It’s a measure of overall consumer perceptions of any
brand. Those perceptions get shaped by the customer
experience that a brand offers. 

• If consumers get treated well, they’ll develop favorable

perceptions of a company. Thus, positive brand equity gets
generated. Poor customer experiences, meanwhile, create
unfavorable opinions of a business. That’s when negative
brand equity results. And once it has, it can be tough to turn
around.     
Components of Brand Equity
 Brand equity examples
• Apple : Apple, the technology giant enjoys a very positive and strong
Brand Equity not only in the country of USA but all across the globe as
its offerings of mobile phones, I-pads, watches, televisions, computer
systems, and laptops amongst others are manufactured on the objectives
of quality and operational excellence and the brand has caught the nerve
of the market and consumer requirement. Even if their new line of
mobile phones have more or less the same features as compared to the
previous version but the brand is still able to command a premium and
enjoy a huge loyal customer base. Since last seven years, it is one of the
top brands in the mobile and technology industry.

• Facebook : There are many social networking sites that have got
introduced and vanished from the market, but as Facebook has a strong
and powerful Brand Equity, it is constant in the market with millions of
users all over the world. Facebook must also be appreciated on
increasing its Product line by adding Whatsapp and Instagram to its
portfolio.
 How to Manage Brand Equity?
• Build amazing Value in your offerings - Samsung has
many products but it is a clear market leader in
Smartphones. However, the brand equity which Samsung
has earned in smartphones have added value across its
televisions, refrigerators and others. Now imagine
Samsung giving very good products in refrigerators and
televisions as well
• Continuous Differentiation - Apple as a brand was
known for its innovation and strong differentiation by
launching Ipad, Ipod, Iphone
• Maintaining the brand image - Louis Vuitton, Hermes,
Prada, Chanel, Gucci, Dior – all are brands which are to be
found only in premium locations or which have their very
own premium outlets.
• Continuous Expansion (product or geographical)
Google, the number 1 brand in the world has a presence in
practically all the countries in the world and is Present in so
many diverse digital products with so much capacity.
Google search, Google maps, Android OS are all
indispensable products from the house of Google and
Google keeps expanding and giving delight to its customers.
Naturally, Google faces not much difficulty in managing
brand equity because its products and their vast presence is
a delight for its customers.

• Building Brand awareness - P&G spends $4 billion

on an average to build brand awareness for the
various products it has in its portfolio. It keeps
launching new products and new variants.
• Brand recall - AT&T is a brand which is known to advertise
heavily. The same goes for Verizon. These are brands which
have similar products and both of them advertise heavily.
This advertisement is not for awareness but it is more for
recall, which has resulted in Verizon repeatedly being the top
10 brands ranked by brand equity in the world.

• Managing Social Media - Wendy’s is known for its

wisecracks and for taking on McDonald’s and Burger King
even though it is a smaller chain than both. It is therefore not
a surprise that many people like Wendy’s just because of the
connect they made with the brand on social media. If you
learn to handle social media properly, you will find it easier
to manage brand equity.
• Being Proactive - The success of Amazon is not only
because of its online business model, it is also because of
the genius of the Amazon Marketing team and its focus on
being proactive towards brand building. Right from the
logo of amazon, the packaging boxes, the transportation
vehicles, the warehouses, the ATL and BTL ads, everything
shouts AMAZON clearly.

• Reactions are important too - Maggi was once banned in

India because of high lead content. At that time, Nestle as
the parent brand received a lot backlash. Nestle revised the
contents of Maggi and got the brand back on its tracks.
After Maggi ban was lifted, Nestle launched many variants
of Maggi and started heavy advertising for its products. The
net result is that Maggi’s brand image is still positive today.
• Focus - Walmart which has regularly ranked as one of the top
brands in the world has a clear directive – They are a firm which
has pioneered “Everyday low prices” and that is their brand
motto and tagline as well. As a result, across the organization,
everyone has one single focus – To bring the cost down as much
as possible. This focus helps Walmart achieve its vision and
manage brand equity.

• Consistency - Brands like Walmart, Microsoft, P&G, HUL,

Verizon, AT&T, Apple, Google are all brands which have
maintained a consistent approach towards customer satisfaction
and towards brand building. They have repeatedly delighted
their customers and have rules and profiles of managing brand
equity thereby maintaining a consistency in their brand promise.
• Understanding Trends & Preferences - McDonald’s is an example
of a brand which has been managing brand equity by understanding
people’s preferences. Every country you go to, you will find a
different menu of McDonald’s. This is because the preferences of
local people is different. McDonald’s proactively launches variants of
burgers to match the local preference. As a result, all the elements of
brand equity rise in value, thereby giving a higher brand equity to
McDonald’s in every region it operates in.

• Understanding the Consumer psyche - Netflix is one brand which

looked towards the future and changing customer lifestyle. It
launched a product which allows you to watch fantastic television
series right from your home. This simple understanding of consumer
psyche, brought down the BLOCKBUSTER retail chain within some
time. Netflix now has a market capitalization of 62 Billion dollars!
All because it focused on understanding the consumer psyche.
 Keller’s Brand equity model 
Customer based brand equity (CBBE)
• Keller’s Brand equity model is brilliant as it tells
a brand which stage the brand belongs to and
what it can do to go higher up the stage.
• It guides brands on building brand equity. There
are numerous stages of the Brand equity
pyramid and moving from one stage to the other
might take years.
• The CBBE model or the Brand equity pyramid is
actually a pyramid which tells us how to build brand
equity by understanding your customers and
implementing strategies accordingly.
• By using the Brand equity pyramid or the CBBE model,
brands know which strategies to implement and how to
give the right experiences to their audience so that they
create the WOW factor.
• Level 1 – Brand Identity or Who you are
Brand identity is the way the customers look up to a brand and how
they distinguish each brand from another. It is how the brand defines
itself in the eyes of the customer.

Brand identity is built when customers are unaware of your products.

The work for the brand here is to build a strong brand identity for the
benefit of the brand and to attract the customers. 

Because brand identity is the first step in Keller’s Brand equity

model, it is the most important step and the base of the Brand equity
pyramid. If the base is strong, the pyramid will be stronger. Thus, the
stronger the brand identity you build from the start, the better it is for
your brand.
• How to use Brand identity to build equity?
Many online companies nowadays spend
billions on advertising and creating awareness
even before they have profits in the firm. This
is done to create a brand identity and
build brand awareness right from the start. A
massive advertising campaign right at the start
ensures that every target customer is aware of
the brand and its values are being
communicated directly to the customer.
 Level 2 – Brand Meaning – What are you?

• The second level of Keller’s Brand equity model is

divided into 2 parts – factors which define the brand
meaning for customers.

• A) Brand Performance – The performance of the

brand is important for the customer. Companies
like Bosch, Siemens and many others have become
what they are because of their performance over time.
Nor only physical products, even services
like Google, Microsoft, Apple Operating systems are
loved and trusted because of their performance over
time. 
• B) Brand Imagery – What is the image of the
brand in the eyes of the customer? How does the
customer perceive the brand if it were a human?
Does he think the Brand is rugged, or does it think
the brand is soft? BMW needs to be rugged but
Barbie needs to be soft as a brand. Targeted
marketing and word of mouth can build a
strong brand image for the brand. Here is an article
on how to build a brand image.
 Level 3 – Brand Response – What are the feelings for the brand?

• Once a customer buys your product, he builds up

expectations towards the brand and the
purchase. If the reality matches his expectations,
then the customer is very happy and has positive
feelings about the brand. If the product goes
beyond expectations, it generates huge word of
mouth and may turn the customer to become a
brand advocate. Such positive experiences
generate “Feelings” in the minds of customers.
• However, if the experience is bad, the customer
is left with negative feelings for the brand which
can also be known as “Judgements”. As per
Keller’s Brand equity model, a brand which has
more feelings then judgements is a brand which
benefits in building brand equity. Hence, the
Brand response is higher up in the Brand equity
pyramid.
 Level 4 – Brand Resonance – A strong relationship

• A brand advocate is one who has reached the final level of

the Brand equity pyramid in Keller’s Brand equity model.
• There are very few brands which reach this level. This is a
level where there is a huge social and psychological
connect of the brand with the customer.
The various factors for brand resonance are
• Behavior
• Values and attitude
• Engagement of customers
• Connection and feelings
Pioneer brands try to achieve the level of Brand resonance
in the Keller’s Brand equity model.