Brand Equity

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Table of Contents Page Introduction 3
What is Brand Equity?
Role of Brands
The Scope of Branding

Theoretical Perspectives 4
Brand Equity Models
Brand Asset Valuator
Brand Resonance Pyramid
Building Brand Equity
Measuring Brand Equity
Managing Brand Equity

Conclusion 7

References 8

Introduction

What is Brand Equity?
As defined by the American Marketing Association a Brand is the “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors” [1]. Therefore Brand Equity can then be defined as “a set of assets such as name awareness, loyal customers, perceived quality, and associations (i.e.: being “pure” and “it floats”) that are linked to the brand and add (or subtract) value to the product or service being offered” [2] or in short it is “the added value endowed on products & services” [3].

Role of Brands
Brands help consumers identify the manufacturer or service provider easily and as a result it helps simplify decision making and lower search costs [4]. It is also a stand for quality and thereby establishing a competitive advantage in the market. A strong brand will help create barriers for new entrants in to the market by way of establishing brand loyalty, which in turn would result in securing a price premium. Having a strong brand also warrants for legal protection (by way of patents, trademarks, copyrights etc.) [5].

Scope of Branding
Branding can be applied to anywhere a consumer has a choice [6]. Branding is about creating differences between products and services by giving it its own unique identity as well as helping consumers understand its functionalities. For this to be successful it’s important to convince the consumer of its meaningful differences.

Theoretical Perspectives

Brand Equity Models

Brand Asset Valuator
Advertising agency, Young and Rubicam developed this model to showcase realistic prospects for brands. Based on research with almost more than 700,000 people in 49 countries in relation to 44,000 brands, it measures the value of a brand where it is created: in people’s hearts and minds. According to Y&R there are five key pillars of brand equity [7]; * Differentiation – Measures the degree to which a brand is seen as different from others * Energy – Measure the brand’s sense of momentum

* Relevance – Measure the breadth of a brand’s appeal * Esteem – Measure how well the brand is regarded and respect * Knowledge – Measure how familiar and intimate consumers are with the brand

Based on these, it can be determined whether a brand is capable of establishing itself as a strong power brand, or whether erosion will cause it to lose ground.

Figure 01: BAV Power Grid
Source: http://young-rubicam.de/tools-wissen/tools/brandasset-valuator/?lang=en Brand Resonance Pyramid
Brand resonance is distinguished by the strong connection between the consumer and the brand. * Who are you? (brand identity)
* What are you? (brand meaning)
* What about you? What do I think or feel about you? (brand response) * What about you and me? What kind of association and how much of a connection would I like to have with you? (brand relationships) [8]

According to this model, in order to assess the above, it establishes a pyramid of six “Brand Building Blocks”. This emphasizes the contrast of brands – the rational route to brand building is depicted on...
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