What do you mean by Brand Equity ?
Concept of brand equity is still under evolution. Equity is defined as value, perception, imagination and association with performance. Every company wants its product to have very high equity. When this terminology gets converted into financial parameters, we get a value of equity.Example:
In the month of February 2016, Google has become more valuable than Apple and has become the most valuable company in the world. At the end it’s linked with performance.
Brand Equity is associated with
- Brand awareness
- Brand attributes
- Perceived quality
- Brand loyalty
- Performance
- Customers increasing preference
- A momentum
- Reputation and goodwill
What is meant by Brand Recall?
Brand recall is a very important aspect to brand management as it helps in getting more customers by increasing your customer base and making customers buy your products repeatedly. If a customer has a nice experience with the brand, it is obvious that the customer will buy that brand’s product even when the product is re-launched. This is what a brand recall is. It’s a measure of how well the brand of the company is connected with the people and how well the people can relate them with it. Most importantly, it’s a qualitative measure.Brand recall is when the in the minds of the consumer, the brand is imprinted. Brand recall is usually categorised into two – aided and un-aided recall. In today’s competitive world, if a customer can remember the brand without any aid, or mention, this means that the brand name is well imprinted and connected with the customer.
Now, the question is, why does a customer need to remember the brand?
It’s because if a customer remembers a brand, there is a high possibility that he will buy that brand. Whereas, if the customer doesn’t recall a particular brand, he will go with the one he remembers. This happens because of a simple logic, i.e. the value of a brand is associated in the memory of the consumer.
Let’s take examples to make it clearer:
- When we think about shoes as a brand, we think of Adidas, Reebok or Nike. This is one of the best examples of brand recall. This happens automatically and hence we can say it is imprinted in our minds.
- On asking about your favourite carbonated beverage, people would either say Coca-Cola or Pepsi immediately.
- In the premium clothing brand who wouldn’t say a Pepe jeans, Zara, Forever 21 or Vero moda.
- And about premium automobiles, you might think of Mercedes or BMW, which is again obvious.
Benefits of investing in brand equity
- Greater customer loyalty
Companies should understand that a positive brand can be helpful in driving customer loyalty which is essential to win the market share in great proportion. Customer loyalty helps in minimising customer churn, so once you get a good customer base, you do not need to worry much. - Deeper customer relationships
It is a fact that when a customer associates with the brand and recalls it, it will be willing to buy it repeatedly. It is a positive brand that helps increase the sales. - Broader brand
A broader brand means a brand with many products and services, so that it becomes an umbrella of brands. If the brand’s equity is strong, a brand can expand and thus the company will be able to offer more. - Enhanced pricing opportunities
Brand equity of a strong and successful company can enable them to charge a high price and therefore, earn a higher margin. So, it is said that a strong brand earns a price premium .
Here, we can take the example of APPLE: Although the iPhones are costly, yet people tend to buy them because along with the product, comes status and position.
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