Brands vary in the amount of power/value they have in the market place. Some brands may be unknown to most buyers in the market place. Some brands may have fairly high degree of brand awareness measured by brand recall/brand recognition. Few brands have high degree of brand acceptability i.e. most customers would not resist buying them. Some brands enjoy a high degree of brand preference i.e. they are selected over others. Few brands command brand loyalty i.e. if brand is not available at one store, they would go to another store for it, without buying a substitute product.
Brand equity is related to:
• Degree of brand recall/recognition
• Perceived brand quality
• Strong mental/emotional association
• Strong channel relationships
• Percentage of cut who are
• Satisfied with the brand (brand acceptability)
• Who value the brand (brand preference)
• Who are devoted to the brand (brand loyalty)
• Brand equity is difficult to measure. But it may be understood thru
• Price premium that brands command
• Extra volume that the brand generates over that of an average brand
• Other aspects listed above
• High brand equity provides competitive advantage in the form of:
• Reduced marketing costs due to high customer awareness & loyalty
• More trade leverage with distributors/retailers.
• Company may be able to charge a premium to customers
• Brand extensions may help increase profits by passing credibility of brand to other products (Maggi Noodles already had brand recognition. So they named it Maggi sauce) (Park Avenue had shirts & named their toiletries line the same thing)
• May help defend against price competition.
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