You must have noticed that managers frequently determine what their brand is worth. Several brand experts including Berkowitz, Kotler, and Keller defines brand equity differently mainly because of the fact that a brand’s equity is a mixture of numerous factors. These might be the added value of a product due to the brand name, the financial and psychological value of a brand or what the customers perceive about the brand.
Why is Brand Equity Important?
Brand equity determines how well your brand is taken in the market by consumers and other businesses. With a high brand equity, consumers are willing to pay the premium price for your products and the market share gradually increases. It acts as an asset to your enterprise as brands with high equity can sell their equity to other businesses as an intangible asset.
On the other hand, there is negative brand equity as well. This can be a disaster for your brand as you witness the exact opposite results stated above.
How to Build Brand Equity?
For these reasons, brand managers are constantly focusing on improving their brand equity and the following are some of the most successful strategies:
Improving and Maintaining Quality:
Since one definition of brand equity is the customer’s perception of your brand, it is imperative to continue working on the quality of your products. Given the competition, consumers are very conscious about the products they use. Therefore, if they trust the quality of your products and witness an improvement over time, the brand equity is likely to go up.
Give Customers What They Want:
The most important task in the entire marketing process is market research and consumer insights. If your brand recognizes consumer preferences at all times, you are likely to improve brand equity with time. However, one mistake can lead to a sharp decline in brand equity and a popular example is that of when Coca-Cola introduced the “New Coke” when consumers preferred Pepsi’s taste over coke.
Keeping Up with the Pace:
Finally, you have to stay updated with the latest market trends and actions of competitors. This will help you devise suitable strategies for branding and eventually help you build brand equity.
Consistently high brand equity can be very beneficial in terms of increasing market share and improving brand loyalty.