Brand Equity
 A brand equity is the positive effect of the brand on the difference
between the prices that the consumer accepts to pay when the
brand known compared to the value of the benefit received.
 Brand equity refers to the marketing effects and outcomes that
accrue to a product with its brand name compared with those that
would accrue if the same product did not have the brand name.
 Brand equity is created through aggressive mass marketing
campaigns.
 Taking Advantage of the well known brand name the company
some time charges premium prices from the consumer.
Brand Equity
 Consumers'
knowledge about a brand
makes
manufacturers/advertisers respond differently or adopt
appropriately adept measures for the marketing of the
brand
 Brand equity is one of the factors which can increase the
financial value of a brand to the brand owner, although not
the only one.
 Elements that can be included in the benefits and
valuation of brand equity include changing market share,
profit margins, consumer recognition of logos, consumers'
perceptions of quality, etc
Brand Equity
 The study of brand equity is increasingly popular as
some marketing researchers have concluded that
brands are one of the most valuable assets that a
company has
 Examples: Firms with strong brand equity are Nike
and Coca-Cola, whose corporate logos are
recognized worldwide.
Brand Equity
 There are many ways to measure a brand.
 Some measurements approaches are at the
1.
2.
3.
Firm level,
Product level, and
Consumer level.
Brand Equity
 Firm Level: Firm level approaches measure the
brand as a financial asset. A calculation is made
regarding how much the brand is worth as an
intangible asset.
 For example, if you were to take the value of the firm,
as derived by its market capitalization - and then
subtract tangible assets and "measurable" intangible
assets- the residual would be the brand equity.
Brand Equity
 Product Level: The classic product level brand
measurement example is to compare the price of a
no-name or private label product to an "equivalent"
branded product.
 The difference in price, assuming all things equal, is
due to the brand. More recently a revenue premium
approach has been advocated practiced worldwide.
Brand Equity
 Consumer Level: This approach seeks to map the
mind of the consumer to find out what associations
with the brand the consumer has.
 This approach seeks to measure the awareness
(recall and recognition) and brand image (the
overall associations that the brand has.
 Brands with high levels of awareness and strong,
favorable and unique associations are considered
as high equity brands.
Brand Equity
IS BRAND EQUITY ALWAYS POSITIVE ???
 There are two schools of thought regarding the
existence of negative brand equity.
 One perspective states brand equity cannot be
negative, hypothesizing only positive brand equity is
created by marketing activities such as advertising,
PR, and promotion.
 A second perspective is that negative equity can
exist, due to catastrophic events to the brand, such
as a wide product recall or continued negative press
attention
Brand Equity
EXAMPLES OF NEGATIVE BRAND EQUITY???
 COKE – pesticide content
 AIR FRANCE – Unexpected Air Crash
 TATA INDICA/ NANO – Defects in manufacturing
 MARKS & SPENCER – Poor Innovation in Fashion
Trends
Impact on Brand Negative – but confined to short time Frame
Brand Equity
EXAMPLES OF NEGATIVE BRAND EQUITY???
 McDONALDS: Suffering negative brand equity from
some consumer segments due to its association with
obesity risks.
 Alternatively, it can occur due to external factors, such as
Burberry brands being damaged by their association
with hooliganism and violence.
Brand Equity
EXAMPLES OF POSITIVE BRAND EQUITY:
SONY – Most Powerful Brand for electronic Goods
MUL – Cars with variety of features & unmatchable Service
VODAFONE – Uninterrupted service – value for money
GOOGLE – Most user friendly Internet Search Engine
MICROSOFT – Best Software Package acceptable globally
3 M – Outstanding Innovative product Features
GE – Biggest and reliable producer of Jet engines, and Leasing Co
NOKIA – Afforable and user friendly mobile handsets