Advertisement and brand management(ABM) concept BRANDING and Brand Equity

What is a Brand: A brand is a name, term, sing or a symbol or design or a combination of these that identifies (or) intended to identify the products of service of a manufacturer.

Brand loyalty:  Brand loyalty is the key element to understand the concept of ‘Brand Equity’. It means the extent the which a Brand enjoys customer loyalty. So it is important to discriminate between habitual buying (customer loyalty) and Brand loyalty.

        For ex:- A house wife who repeatedly buys Brand X of detergent power may not necessarily be loyal to it. It might be due to

●      Non – availability of competitors Brands.

●      She didn’t find parity between Brand X and competitors

●      As a habit

From the above it is clear that the repeat purchases are different from Brand loyalty. The real issue in brand loyalty is

1.       Whether the customer is committed one

2.       Will he\she walk an extra mile to get it

3.       Will the customer go to another shop and ask for it

4.       Will he\she leave with the substitutes being offered by the shopkeeper (or) vendor?

Customers can be grouped under 5 categories pertaining to the attitude\de towards the Brand.

The pyramid of Brand loyalty:- 

Committed buyer brand equity high

Like brand clear Brand assets

Satisfied buyer with switching

Cost-Vulnerable equity

Satisfied/habitual buyer

Reason to change-Diffused equity

Price sensitive buyer/Indifferent

Brand-No Loyality, No-Equity

A research by a consumer non-durable goods firm was conducted over 5 decades and surprisingly found that no brand did not have a committed buyer segment. Among the total interviewers 80% of customers were fell in the two lower segments & about 20% were in the third segment of loyalty pyramid.

Brand equity:- Brand equity refers to a “ set of assets and liabilities linked to a brand that add to or subtract from the value provided by a product or service to a firm and or to that firm’s competitors.”

        Brand equity provides value to a firm in the form of price premium, Trade leverage, competitive advantage.

A Brand‘s assets can be categorized in five groups as listed below

1.       Brand loyalty

2.       Brand name awareness

3.       Brand’s perceived Quality

4.       Brand association

5.       Other proprietary brand assets

   Brand               Brand              Perceived           Brand     Proprietary   

Loyalty          awareness            quality            association      assets

                                         Brand equity

 Brand awareness:- Brand awareness is the ability of a potential buyer to recognize / recall that a brand is part of a product category.

                                       (Or)

In other words, the customer should be able to identify a firm’s product in the retail stores or be able to recall its brand whenever he or she thinks of the product class.

The awareness continuum & brand equity:-

To achieve high awareness the following communication tasks are very helpful

a.       Be different & memorable.

b.       Involve a slogan or jingle.

c.        Expose the brand symbol.

d.       Sponsor major events.

e.        Get into the press, as a news item.

f.        Repeat yourself constantly.

Brand association:- customers associate different dimensions of the product, including its use & use situations, to the brands. Brand association therefore is anything linked to the memory of a brand.

        Ex :- A jingle like “Happy days are here again” has been associated in the customer’s mind with Thumps Up.

Perceived quality:- The customers perception of high quality is one of the important association, which the firms always desire. Because if the brand is perceived to be of premium quality, the customer will be willing to pay a premium for it. High perceived quality means higher returns on investment.

 Proprietary assets:- Proprietary assets of a brand include its name, patent, channel relationship, communication of the proc\duct etc...

 Brand valuation:- It is difficult to value a brand exactly. A brand value is a function of the customer’s perception, his/her attitude towards it, and the economic value or price that he/she attaches to it.

    Value  of the Brand = price premium    No of units sold.

i.e The value of brand in the given year will be the price differential times (premium) the no of units sold.

        Ex :- A brand commands a premium of Rs 5/- per unit. It had sold 250000 units.

        The brand value is  = 250000*5 =1250000 /-

Brand positioning:- “Positioning is the act of communicating company’s offer so that it occupies a distinct and valued place in the customers mind”

       

‘ positioning is the act of communicating. But what you do to mind of the prospect, i.e. you position the product in the mind of the prospect’. Ways to position the Brand

The different ways to position the brand are

a.       Use situations.

b.       Emphasizing tangible benefits.

c.        Linking to uses.

d.       Head-on competitive positioning.

e.        Life-style positioning.

f.        Benefits offered.