How Is Brand Equity Developed?
A brand is a unique name, term, symbol, design or any attribute that identifies one product or service as different from those of others. Branding is the process by which companies associate their names with their products and services. Usually, a well-established brand has achieved this through a long history of innovation, a consistent quality of service and a commitment to quality. It also involves an association or a conjunction of associations, whether it be a group of products, services, processes, etc. Brand equity refers to the totality of the customer relationship with the company.
A brand must capture the imagination and loyalty of consumers to become a household name. Research reveals that most consumers are sensitive to brands, despite the fact that they are repeatedly exposed to various brands. Brands are identified more with consumers’ attitudes, values and expectations rather than the actual attributes of the brand itself. There are several components that constitute a successful brand, including commitment, creativity, integrity, impact, personality and effectiveness. Creating and developing a brand requires extensive market research to gain knowledge on the consumer’s behavior and brand awareness.
Branding, like identity, is an intangible asset that can have a tremendous effect on product recall, brand loyalty and consumer trust. Consumer perceptions of brand names generally exceed sales for many products. Branding is also an important driver of brand equity and the brand equity gap is narrowing as new technologies emerge and consumer attitudes toward products change.
To ensure that a brand is effective at creating and building a positive reputation, marketers conduct a variety of market research, observe consumer behavior and conduct campaigns to build a successful brand. Marketers develop branding strategies based on the results of their studies. Although some aspects may not always yield the anticipated results, such as the reaction of consumers to the “new and improved” versions of existing brands, marketers use these findings to improve future campaigns and establish a solid foundation for brand management. The development of brand equity requires commitment from the brand owner, as well as the investment of financial resources.
Marketing efforts need to distinguish the brand name from similar products to make it stand out in the market. There are two basic ways by which this can be achieved. First, the company can differentiate its products or services from its competitors by positioning itself differently. Second, by communicating key branding messages clearly to consumers. Although some customers do not take brand identity seriously, understanding the importance of positioning helps to create consumer awareness. In addition, a strong positioning strategy helps to differentiate between competing products, while also helping consumers to understand why they should buy from your brand rather than from competitors.
The branding of today is much different from what was seen in the past. Trademarks once belonged to just a select few businesses that controlled the distribution and sale of a product. Today, millions of dollars are spent each year on brand name promotion on the Internet, in advertisements in magazines and newspapers, using social media, and attending conventions. Although some businesses still use the more traditional marketing methods, others have moved into the 21st century and embraced social media. If your brand wants to establish a foothold in the digital world, the social media world offers many avenues for success.