You are able to sell your product because it satisfies a particular set of your customers' needs; this is your unique selling propositionor USP.
It is a simple example but a great situation to understand brand and brand equity. If that action is in favor of any brand than is positive brand equity and that action is not favorable than its negative brand equity. Brand equity is a good barometer to understand past action and future course of action for marketers, who are active in formulating strategies for a given brand.
If in present, customer has developed favorable attitude towards the brand then it is a clear indication that past investment time, money, etc have found there mark. The present also leads the way how marketers should plan future course, as to achieve desired results.
Conceptualizing, Measuring, and Managing Customer-Based Brand Equity The author presents a conceptual model of brand equity from the perspective of the individual consumer. Customer-based brand equity is defined as the differential effect of brand knowledge on consumer re-. Customer-based brand equity, in this respect, is the driving force behind incremental financial gains to the firm (Lasser et al., ). Based on the literature of. The customer-based brand equity model incorporates theoretical advances and managerial practices in understanding and influencing consumer behavior. It provides a unique point of view as to what brand equity is and how it should best be build, measured, and managed.
But one aspect is absolutely clear that brand knowledge is a key factor in establishing brand equity. To further stress point of brand knowledge, an experiment was conducted by Larry Percy with respect to brand equity using Beer as product.
Aim was to understand consumer response for the same brands under two different set ups. The first set up was where consumer had no knowledge about the brand and in the second next set up, brand name was not disclosed.
Result showed that consumer were highly critical of preferred beer when they were not aware of brand. A favorable response was recorded after brand disclosure, leading to conclusion that brand knowledge contributes a lot in understanding customer based brand equity.
Brand knowledge which is crucial in evolution of brand equity consists of brand awareness and brand image. Here brand awareness means the ability created by brand with which consumer can recall and recognize in any given environment.
On the other hand brand image are visuals, logo, style etc with which brand is associated. Customer based brand equity results in creation of strong brand and this is achieved when brand awareness and image are at high level.
The customer‐based brand equity scale is developed based on the five underlying dimensions of brand equity: performance, value, social image, trustworthiness and commitment. In empirical tests, brands that scored higher on the customer‐based brand equity scale generally had higher prices. The authors propose a customer-based brand equity model for use in global branding efforts and research, based on a series of qualitative and quantitative studies. They find new dimensions of brand equity that need to be considered by lodging researchers and operators. Building a strong brand, according to the Customer-Based Brand Equity model, can be thought of in terms of a sequence of steps, in which each step is contingent upon the successful completion of the previous step.
But how to create a strong brand based brand equity? A thing to understand here is that brand equity resides in the mind of the customer, so conviction has to be brought in strategy as to permanently occupy consumer mind space. The process is like climbing a ladder, one step at a time.
And at each step an objective is achieved creating leading to a strong brand. First step is to establish a relation between customer need and product offering, meaning for given product the brand is the best customer can get. This is done by appropriate brand awareness and image.
Second step is connection, by churning out predictable, reliable and quality performance during each purchase. Next create emotional connection with customer using brand offering and brand image as to generate response from the customer.
The emotional level response in form of positive reaction or opinion brand creates long term, sustainable and healthy relationship. Both these brands have become synonymous with search engine and entertainment in mind of customers. When brand is able to achieve sense of oneness with its consumer then it can be said that strong brand has been created.
Companies tend to benefit a lot, in terms loyalty as consumer will stick to the brand no matter what price premium they have to shell out. These consumers become sort of brand ambassador and recommending usage of brand. There by creating consumer based brand equity.Professor Nader Tavassoli of London Business School contrasts traditional approaches to branding - where brands are a visual identity and a promise to customers - to brands as a customer experience delivered by the entire organisation.
The course offers a brand workout for your own brands, as well. What is Customer-Based Brand Equity (And Why Should You Care)? Market researchers are sometimes overly fond of charts, models, and graphs–but for good reason.
Charts break down some of the complexities of marketing data so they’re easier to explain to and apply to businesses. Customer-based brand equity The initial interest in brand equity, analyzed from the standpoint of valuation in the financial arena, emerged in the 90s as an important research area in marketing .
Brand equity is the positive effect of the brand on the difference between the prices that the consumer accepts to pay when the brand is known compared to the value of the benefit received.
There are two schools of thought regarding the existence of . The Customer-Based Brand Equity (CBBE) Model maintains that building a strong brand involves a series of logical steps: 1) establishing the proper brand identity, 2) creating the appropriate brand meaning.
And since this brand equity is from customer’s perspective, Customer Based Brand Equity. Brand equity is a good barometer to understand past action and future course of action for marketers, who are active in formulating strategies for a given brand.