Understanding, Building and Measuring Brand Equity

Brand Equity (BE) is a crucial aspect of a brand's success in today's competitive market. It represents the difference between the value of a branded product and that without the brand name. Understanding BE is essential for a brand to fulfil its competitive potential. It is a complex concept with various interpretations and definitions by academics and professionals. A popular definition is that it consists of assets or liabilities like brand visibility, brand associations, and customer loyalty that add or subtract from the value of a product or service driven by the brand. This value manifests in consumer loyalty, preference over competitors, willingness to pay premium prices and brand advocacy.?

Brand Equity Comprises Four Key Components:

1. Brand Awareness: The extent to which consumers recognize and recall the brand. A brand with high equity is one that consumers instantly recognize and remember.

2. Brand Associations: The mental and emotional connections consumers make with the brand, including attributes like quality, trust, and prestige.

3. Perceived Quality: How consumers evaluate the quality of the brand's products or services relative to competitors.

4. Brand Loyalty: The degree to which consumers prefer and consistently choose the brand over others, leading to repeated purchases and long-term relationships.

How to Build Brand Equity

BE is a crucial aspect of a company's image and can be strengthened through strategic branding and marketing efforts. Key steps include creating a consistent brand identity, delivering high-quality products and services, engaging with consumers, developing a unique value proposition, and motivating patrons for brand advocacy. A strong brand identity, incorporating visual elements like logos, color schemes, and typography, helps consumers associate specific qualities with the brand across all platforms.?

Consistent delivery of high-quality products and services strengthens trust and satisfaction while engaging with consumers on a deeper level through public relations, social media, email marketing, and personalized experiences, which can build emotional bonds between a brand and its users. Emotional branding, which associates products with positive feelings or experiences, can enhance brand equity. Finally, brand advocacy through word-of-mouth marketing and customer testimonials can increase brand credibility and trustworthiness.

How PR Bolsters Brand Equity?

The most crucial role of Public Relations (PR) is to establish a brand's credibility and authority in its industry. It contributes to BE by creating and maintaining relationships with key stakeholders, such as customers, investors, and the media. PR professionals ensure effective communication with stakeholders, responding to their opinions and needs, building trust and loyalty among customers and increasing investor confidence. In addition to these merits, PR can increase brand awareness and exposure by ensuring a sizable Share of Voice (SOV), which reflects upon the brand’s recognition in the market compared to competitors.?

How to Measure Brand Equity

BE is crucial for understanding a brand's impact and making informed decisions. Companies can use various metrics to measure brand equity, including brand awareness surveys, Net Promoter Score (NPS), Customer Lifetime Value (CLTV), sales and market share, social media metrics, and price premiums. High brand awareness correlates with strong BE, while a high NPS indicates strong brand loyalty and advocacy. A higher CLTV suggests how frequently customers purchase the brand to fulfil their needs, as loyal customers contribute more to a brand's long-term success. Sales growth and market share can clearly indicate brand equity, while social media engagement metrics offer insights into brand resonance and emotional connections. Finally, tracking the price differential between a brand's products and competitors can provide insight into the financial value of BE.

Conclusion

Building and maintaining brand equity is an ongoing process that requires a thoughtful strategy and consistent effort. By tapping on strong emotional connections, ensuring consistent quality, and creating a distinct and recognizable brand identity, companies can establish valuable brand equity that contributes to long-term success. Measuring brand equity is equally important for tracking progress and making data-driven decisions, continually strengthening the brand’s position in the marketplace.

As the saying goes, a strong brand is not built overnight, but through deliberate efforts to understand, engage, and meet the needs of consumers, BE can become a key asset in a company’s growth and sustainability.