Brand Equity • A brand equity is the positive effect of the brand on the difference between the prices that the consumer accepts to pay when the brand known compared to the value of the benefit received. • Brand equity refers to the marketing effects and outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name. • Brand equity is created through aggressive mass marketing campaigns. • Taking Advantage of the well known brand name the company some time charges premium prices from the consumer.
Brand Equity • Consumers' knowledge about a brand makes manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand • Brand equity is one of the factors which can increase the financial value of a brand to the brand owner, although not the only one. • Elements that can be included in the benefits and valuation of brand equity include changing market share, profit margins, consumer recognition of logos, consumers' perceptions of quality, etc
Brand Equity • The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are one of the most valuable assets that a company has • Examples: Firms with strong brand equity are Nike and Coca-Cola, whose corporate logos are recognized worldwide.
Brand Equity • There are many ways to measure a brand. • Some measurements approaches are at the • Firm level, • Product level, and • Consumer level.
Brand Equity • Firm Level: Firm level approaches measure the brand as a financial asset. A calculation is made regarding how much the brand is worth as an intangible asset. • For example, if you were to take the value of the firm, as derived by its market capitalization - and then subtract tangible assets and "measurable" intangible assets- the residual would be the brand equity.
Brand Equity • Product Level: The classic product level brand measurement example is to compare the price of a no-name or private label product to an "equivalent" branded product. • The difference in price, assuming all things equal, is due to the brand. More recently a revenue premium approach has been advocated practiced worldwide.
Brand Equity • Consumer Level: This approach seeks to map the mind of the consumer to find out what associations with the brand the consumer has. • This approach seeks to measure the awareness (recall and recognition) and brand image (the overall associations that the brand has. • Brands with high levels of awareness and strong, favorable and unique associations are considered as high equity brands.
Brand Equity IS BRAND EQUITY ALWAYS POSITIVE ??? • There are two schools of thought regarding the existence of negative brand equity. • One perspective states brand equity cannot be negative, hypothesizing only positive brand equity is created by marketing activities such as advertising, PR, and promotion. • A second perspective is that negative equity can exist, due to catastrophic events to the brand, such as a wide product recall or continued negative press attention
Brand Equity EXAMPLES OF NEGATIVE BRAND EQUITY??? • COKE – pesticide content • AIR FRANCE – Unexpected Air Crash • TATA INDICA/ NANO – Defects in manufacturing • MARKS & SPENCER – Poor Innovation in Fashion Trends Impact on Brand Negative – but confined to short time Frame
Brand Equity EXAMPLES OF NEGATIVE BRAND EQUITY??? • McDONALDS: Suffering negative brand equity from some consumer segments due to its association with obesity risks. • Alternatively, it can occur due to external factors, such as Burberry brands being damaged by their association with hooliganism and violence.
Brand Equity EXAMPLES OF POSITIVE BRAND EQUITY: SONY – Most Powerful Brand for electronic Goods MUL – Cars with variety of features & unmatchable Service VODAFONE – Uninterrupted service – value for money GOOGLE – Most user friendly Internet Search Engine MICROSOFT – Best Software Package acceptable globally 3 M – Outstanding Innovative product Features GE – Biggest and reliable producer of Jet engines, and Leasing Co NOKIA – Afforable and user friendly mobile handsets