What is Brand Equity? Assets: Awareness, Image, Associations, Perceived Quality

Introduction of Brand Equity

A brand is considered an asset for a company. Fundamentally, branding is about endowing products and services with the power of brand equity. The brand equity concept stresses the importance of the role of the brand in marketing strategies. The concept of brand equity builds on many previously identified principles of brand management.


What is Brand Equity?

Brand equity represents ‘the total accumulated value or worth of a brand’. Knapp (2000) considers brand equity as the “totality of a brand’s perception”. He includes the feelings of consumers, employees and all stakeholders while measuring brand equity.

Keller (1993) defines brand equity in terms of marketing effects whereby certain outcomes occur as a result of a brand name. Brand equity represents ‘the total accumulated value or worth of a brand’. Knapp (2000) considers brand equity as the “totality of a brand’s perception”.

He includes the feelings of consumers, employees and all stakeholders while measuring brand equity. Keller (1993) defines brand equity in terms of marketing effects whereby certain outcomes occur as a result of a brand name.

Diagrammatically, brand equity can be presented as


Assets of Brand Equity

Brand equity is a set of assets associated with the brand. Brand awareness, perceived quality of the brand and brand associations are assets that brand managers create and enhance to build brand equity.

Brand Awareness

Brand awareness consists of brand recognition and brand recall performance. Brand recognition relates to consumers’ ability to confirm prior exposure to the brand when given the brand as a cue. Or otherwise, we can say that the brands are recognized when the consumers can correctly discriminate the brand as having been previously seen or heard.

For example, when we think of detergents the brands like Ariel, Surf, and Henko come to our mind. The brand recall relates to consumers’ ability to retrieve the brand from memory when given the product category, the needs fulfilled by the category, or a purchase or usage situation as a cue. In other words, brand recall requires that consumers correctly generate the brand from memory when given a relevant cue.

For example, recall of Nescafe Sunrise will depend on consumers’ ability to retrieve the brand when they think of purchasing coffee powder.

With most information in memory, it is generally easier to recognize a brand than it is to recall it from memory. The relative importance of brand recall and recognition will depend on the extent to which consumers make product-related.

Decisions with the brand present or not.

Consequences of Brand Awareness

Brand awareness plays an important role in consumer decision-making for three main reasons.

  • Learning Advantages: The first way that brand awareness affects consumer decision making by influencing the formation and strength of the brand associations that make up the brand image.
    A necessary condition for the creation of a brand image is that a brand node has been established in memory. The first step in building brand equity is to register the brands in the minds of consumers.

  • Consideration Advantages: Consumers must think of and consider the brand whenever they are consuming a product whose needs the brand could potentially satisfy. The set of brands that receive serious consideration for purchase is called the consideration set. Raising brand awareness increases the likelihood that the brand will be a member of the consideration set.

  • Choice Advantages: The third advantage of creating a high level of brand awareness is that brand awareness can affect choices among brands in the consideration set, even if there are essentially no other associations to those brands. For example, consumers have been shown to adopt a decision rule to buy only more familiar, well-established brands in some cases.

    Thus, in low-involvement decision settings, a minimum level of brand awareness may be sufficient for product choice, even in the absence of a well-formed attitude. Consumers may make choices based on brand awareness considerations when they have low involvement.

    The third advantage of creating a high level of brand awareness is that brand awareness can affect choices among brands in the consideration set, even if there are essentially no other associations to those brands. For example, consumers have been shown to adopt a decision rule to buy only more familiar, well-established brands in some cases.

    Thus, in low-involvement decision settings, a minimum level of brand awareness may be sufficient for product choice, even in the absence of a well-formed attitude. Consumers may make choices based on brand awareness considerations when they have low involvement.

Establishing Brand Awareness

The level of awareness can range from mere recognition to recall to top-of-mind to dominant. One can recognize a brand on account of the experience. Recognition by itself leads to positive feelings. Familiarity also means that a company is spending money to keep it in the consumers’ memory. Though recognition is a positive sign, it does not necessarily indicate the brand’s strength.

The weak brands may also be recognized. Brand awareness is created by increasing the familiarity of the brand through repeated exposure. That is, the more a consumer experiences the brand by seeing it, hearing it, or thinking about it, the brand will become strongly registered in memory.

Thus anything the brand elements such as brand name, logo, character, packaging, or slogan can potentially increase familiarity and awareness of that brand.

While creating awareness, the businessmen make use of advertising, promotion, public relation, sponsorship and event marketing. Moreover, it is important to visually and verbally reinforce the brand name with a full complement of brand elements.

To build awareness, it is often desirable to develop a slogan or jingle that creatively links the brand and the appropriate product category or purchase or consumption cues.Additional use can be made of the other brand elements-logos, symbols, characters and packaging.

Thus brand awareness is created by increasing the familiarity of the brand through repeated exposure and strong associations with the appropriate product category or other relevant purchase or consumption cues.

Some brands have a small life, and so it will be uneconomical to incur heavy promotional expenses for them. It is economical to use corporate brand names in such cases. As promotion is expensive, a policy must be formulated regarding the number of brands selected for brand building.

Awareness ultimately enhances brand equity. Some brands should have a different kind of awareness as they are strategic brands. A brand that is promoted over a while retains the cumulative level of name recognition.

Brand Image

A positive brand image is created by marketing A positive brand image is created by marketing programs that link strong, favorable, and unique associations to the brand in memory.

Besides these marketing programs, brand associations can also be created in a variety of other ways; by direct experience, from information communicated about the brand from the firm programs that link strong, favorable, and unique associations to the brand in memory.

Besides these marketing programs, brand associations can also be created in a variety of other ways; by direct experience, from information communicated about the brand from the firm or

Brand Associations

Consumers associate the brand with certain tangible and intangible attributes, a celebrity endorser or a visual symbol. Most of these associations are derived from brand identity and brand image. Consumer beliefs about brand attributes and benefits can be formed in different ways.

Brand attributes are those descriptive features that characterize a product or service. Brand benefits are the personal value and meaning that consumers attach to the product or service attributes. In general, the source of information creating the strongest brand attribute and benefit associations is direct experience.

This type of information can be particularly influential in consumers’ product decisions. The next strongest associations are likely to be formed based on word of mouth. Word of mouth is particularly important for restaurants, entertainment, banking and personal services.

Favourability of Brand Associations: Favorable brand associations are created by convincing consumers that the brand possesses relevant attributes and benefits that satisfy their needs and wants, such that they form positive overall brand judgments. Thus, favorable associations for a brand are those associations that are desirable to consumers and are successfully delivered by the product and conveyed by the supporting marketing program for the brand.

Uniqueness of Brand Associations: Brand associations may or may not be shared with other competing brands. The essence of brand positioning is that the brand has a sustainable competitive advantage or “Unique Selling Proposition” that gives consumers a compelling reason why they should buy that particular brand. These differences may be highlighted implicitly without stating a competitive point of reference. Further, they may be based on product-related or non-product related attributes or benefits.

Perceived Quality

Perceived quality becomes an important asset for a brand as it is a major thrust area of a business. It affects all other elements of a brand identity. Perceived quality is a result of an understanding of the requirements of customer segments. Perceived quality leads to financial performance.

It is a key positioning dimension, and often a part of the company’s mission statement. Perceived quality is based on judgments of quality. It is necessary to understand the cues associated with quality.

Perceived quality is not the same as actual quality. Suppose the physical quality of the product improves, but the consumers still carry a poor image of the product had, the perceived quality will be low.


Keller’s Approach to Brand Equity

Keller has focused on the relationship of a brand with the consumers. According to him, brand equity is related to a consumer’s familiarity with the brand, and his favorable associations with it. These associations are strong, congruent, unique and leverageable.

Both these lead to greater consumer preference. Keller’s approach is diagrammatically represented in the following figure:

It can be seen from the above figure that brand associations relate to the attributes of the brand, or benefits or attitudes towards it. Brand associations generally contribute to brand image. A brand is just not a physical entity. It is what the consumer thinks and feels it is or visualizes it to be when he comes across the brand name or its symbol.

Keller has focused on the relationship of a brand with the consumers. Consumers’ brand knowledge results from brand awareness and brand image. Brand knowledge evaluates the consumer’s interpretation of the values linked to a brand.

The brand image reflects the consumer’s perception of the brand’s characteristics. Thus these two are core components at the bottom of brand attributes. Brand awareness reflects the salience of the brand and helps consumers identify the brand with a specific product category.

It can be measured through brand recognition. Brand associations relate to the attributes of the brand or benefits or attitude towards it. These generally contribute to the brand image. Strong brands are brands with a substance they evoke more favorable associations.


ARTICLE SOURCES

Investortonight requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

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  • Harsh V. Verma, Brand Management, Excel Books, New Delhi.

  • Tapan K Panda, Building Brands in the Indian Market, Excel Books, New Delhi.

  • Kapferer, Strategic Brand Management, Kogan Page, New Delhi.

  • Kevin Lane Killer, Strategic Brand Management, Pearson, New Delhi.

Brand Management Topics


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