In this article you will recognize the causes and consequences of brand equity, and get practical guidance on how to build, measure and manage brand equity.
Brand Equity was emerged and created by the diversity of consumer response. If there is no characteristic or something different, then the brand of a product will not be superior to other products, and will be considered generic / no different than other products.
The differences of consumer responses are a result by knowledge of consumers about your product. So, although consumers constantly bombarded by all the companies marketing activities, brand equity ultimately depends on just what is in consumers mind. The difference of consumer responses that create brand equity is reflected in perceptions, preferences, and consumer behavior related to all aspects of marketing activity.
Customer-based brand equity
Understanding needs and desires of consumers is essence of the science of marketing. So in creating and managing brand equity, we should realize how important of customer factor. Thus, a customer-based brand equity of a product can be useful to have characteristics and has a special meaning for the customer.
A product is said have a good customer-based brand equity if customers respond positively to a brand or product being marketed. The key to branding is that the consumers can clearly differentiate our products when compared with competitor products.
Customer-based brand equity itself is created when the consumer already has high awareness and sensitivity with a brand, and will have a unique perception of the brand in their memory.
So, by creating awareness and positive image in mind of consumers, then we will be able to educate consumers so that they can influence their behavior and create a wide range of customer-based brand equity. In some cases, brand awareness is not enough to get a positive response to the consumer because consumer usually will only select products that are familiar to them.
Customer-based brand equity is created because there is a difference or diversity of consumer response to marketing activity when they already know the brand. Usually the difference / diversity of that response will depend on how much the level of awareness and consumer ratings of the product. Several advantages can be gained from a strong brand, both in greater revenue, or lower costs. The advantages are as follows:
- Customer loyalty is much greater.
- Can be more likely to survive in the face of competition.
- A greater profit margin.
- Consumers may be more tolerant when we raise the price.
- Consumers could be more fun if you lower the price.
- Get support and better cooperation.
- Communication and promotion more effective.
- Opportunities for development or brand extensions are more open.