BRAND EQUITY DEFINITION:
Brand equity is a marketing term that represents the value of a brand created through customer experience, quality and perception of the consumers. The company will have positive brands equity when its customers think of it in high regard. When the buyers will appreciate the product and spread the word, it will help a company or product build positive brands equity. A company or product will have negative brands equity when the customers lose faith in their products when they are not satisfied with the product quality or pricing.
UNDERSTANDING BRAND EQUITY:
Positive brand equity is significant for a company’s growth and revenue. When a company has good brands equity, it will have high profits in its sales. It can sell the products at a higher price to its customers. It helps them to beat their competitors and acquire their customers. It is a competitive advantage that results in higher sales. The sister companies can benefit from the brands equity of a company. Also, the stock prices of companies are affected by positive or negative brands equity. Brand equity does a lot of good to the companies in the long run.
COMPONENT OF BRAND EQUITY:
The significant components of brand equity are brand awareness, brand association, brand experience, brand loyalty, and quality.
- The very first and essential step for a brand to build positive brands equity is brand awareness. Their customers should know they exist and should think of them while purchasing or using generic products.
- Next is the brand experience. The brand must ensure a pleasant experience for its customers. It profoundly affects the brand-building process.
- Brand associations are also relevant. It helps in retaining a client and leads to new clients through word of mouth from existing customers.
- The key to positive brand equity is quality. A brand should focus the most on quality. If quality is on point, then the rest of the things automatically falls into place.
- The preference of a brand over other brands by the customer is known as brand loyalty. Brand loyalty brings repetitive sales and if it’s high, it helps to reduce marketing and endorsement costs.