Explain Brand equity? Also describe the factors considered for selecting and combining brand elements.

What are the factors considered for selecting and combining brand elements?
American Marketing Association has defined brand equity as –

“The value of a brand. From a consumer perspective, brand equity is based on consumer attitudes about positive brand attributes and favourable consequences of brand use.”

Professor Philip Kotler has defined brand equity as –
“The positive differential effect that knowing the brand name has on customer response to the product or service.”

David Aaker defined brand equity as –
“A set of assets and liabilities linked to a brand, its name and symbol, that adds to or subtracts from the value provided by a product or service to a firm and/or to that firm’s customers.”

Brand equity is the value of the brand that it offers to the customer considering that a well-known brand name will generate more revenue to the manufacturer as compared to a less-known brand name. So a customer will have preference of a particular brand over an adjacent product from a different brand basis its brand equity.

A strong brand equity or positive brand equity will have brand awareness, brand recognition, brand preference, and brand loyalty in the market. This will have an upper edge in the market relative to other brands which will result in high revenues and high market share.

A positive brand equity helps an organisation in many ways like financial benefits, easy prediction of revenue, ease on entering new markets, introduce new products, etc. The customers loyal to a brand mostly overlook the shortcomings in the long term for a product from that brand.

Similarly, a brand with high and strong equity saves costs as there is less need to promote the product. Mostly communication on product availability and its features in the target market does the job of making a product successful with strong brand equity. The organisation saves on other promotion tools like publicity, direct marketing, and personal selling.

Brand equity is an intangible asset of great value to the company which is generally an approximate value. It can be viewed from different perspectives –

• Organisations level – the premium that an organisation can demand from the customer basis its brand value. For example, a smart phone from Apple demands more premium as compared to Nokia. Similarly a television from a well-known brand will charge more than a less-known brand (Sony Bravia against Micromax or Intextelevesions).

• Product level – the flexibility with which a product line or product mix can be extended basis the brand value. It is easier for an organisation to introduce new products under the same brand in the market, basis the success of its previously launched products. For example, Samsung had easily launched new smartphones under its “galaxy” range of handsets like Galaxy core, Galaxy Alpha, etc.

• Consumer level – the attributes, awareness of brand image in the minds of customers. Here these attributes of the brand are mapped from the customer’s perspective via various tools. Brands with high awareness, loyalty, and strong and favourable associations are considered as high equity brands.

Factors considered for selecting and combining brand elements –
“Apple” as a brand name is simple, distinctive and a well-known word. It also has a friendly and positive appeal.

A marketer should consider the following factors while selecting and combining band elements-
1) Brand awareness improves to a large extent when brand names are selected basis the below criteria-
• Brand name should be easy to pronounce, spell, and remember.
• Brand name should be strongly unique, interesting, fun, and has a “friendly shine”. For example, Apple, Amul, and Blue star.
• Brand name should suggest something about the product benefits.
• Brand name should be transferable to a wide variety of products or product lines.
• It could be used across geographical locations.

2) Logos and Symbols-
Apart from the brand name itself, visual symbols also play a big role in increasing brand awareness. Logos help recognition by means of symbols. Logos indicate origin and ownership of a product. They can be corporate names or trademarks written in distinctive forms, pictures, mascots, designs, plain alphabets or even splash of colours. For example, Apple’s a little chomped apple. Non worded logos are called symbols. Examples of strong word marks – Coca-Cola, Dell, Samsung, etc. Examples of strong non-worded logos – Golden arch (McDonald’s), Olympic rings (Audi), Check mark (Nike), Globe (AT&T), etc.

3) Characters – Companies sometimes use characters as brand symbols. They help in brand awareness as they are unique and attractive. For example, Kelvinator’s penguin, Marlboro’s cowboy, Quantas Airline’s Koala bear.

4) Slogans – Slogans are short phrases that communicate information about the brand. For example, Subway’s “Eat fresh”, McDonald’s “I’m loving it”, Honda “you meet the nicest people on Honda”, etc.

5) Packaging – Good packaging is like a 5 second advertisement at getting customers interested in exploring the product. Packaging is the external wrapper which aims at avoiding damage of the product during transportation, maintaining the quality over a long period, etc. It should achieve the following objectives-

• Identify the brand
• Facilitate product protection and transportation
• Easy to store at home as well as stores
• Convey descriptive information about the product and brand
All the above brand elements contribute to brand identity which help in creating favourable impression for customers during shopping.