Brands has been around for centuries and play a major role in our lives today it helps us identify a good or service from one seller to another and separate it from the competitors satisfying the same need. These differences could be tangible or intangible which ultimately helps to improve consumers’ lives and enhance the financial value of firms.
What is Brand Equity?
Brand equity has number of perspectives, but in essence means the value or perception created to a product or service in the minds of the consumer through the activities leading to create a strong consistent brand. This is also called “Brand goodwill” by accountants.
The Role of brands
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The weakness in this model is there are not links among attributes and their individual weighs in the total brand equity which makes it superficial.
This is a consumer based brand equity model developed by professor K. L. Keller that views brand equity as a development process which focus on building strong connections between customer and the brand.
According to Kotler et al (2012), the first stage of brand development is brand identity where the consumers are beginning to understand what the brand is. Salience refers to how often and how easily consumer thinks of the brand under various purchasing situations.
The second stage is meaning, where consumers begin to understand the points of difference and parity through the brand performance, reliability and functionality. The case demonstrate the value of the brand by marketing on the functional stylish design feature of its products and changing or modifying its products to suit different type of customers.
Third stage is response, where the consumers begin to judge the brand, give personal opinions and evaluation. The case talks about the disgruntled customer at cash registers and the founders’ links with pro-Nazi organization having an effect on the IKEA brand.
The final stage is resonance, This is where it shows the extent of the relationship or connection the brand has. There is evidence in the case showing customer queuing up days before grand opening of IKEA shops.
Brand Asset Valuator
Brand asset valuator (BAV) according to Scribd (2010) is unique since it is predictive, focusing on leading indicators, the size and scope of data helps evaluate a brand in entire world of brands and across many categories and can help managers understand market opportunities and type of risks that come with them and manage brands in the long term.
There are 4 key attributes identified by Ruta et al. (2010) and a fifth one as “Energy” identified in Kotler et al (2012).
Differentiation: the degree to which a brand is seen different from others.
Relevance: measures the breath of a brand’s appeal.
Esteem: how well a brand is regarded and respected.
Knowledge: how consumers are knowledgeable and familiar with the brand.
Energy: measures the sense of momentum of the brand.
Building Brand Equity
According to Kotler et al (2012) there are 3 equity drives.
1. Choosing the right brand elements or identities making up the brand
2. Holistic marketing activities and programs supporting the brand and all products and services endorsed by the brand
3. Use of other entities like (a person, place or thing) to indirectly transfer the associations to the brand.
Are the unique properties or trademarks that identify and differentiate the brand. Brand names, URLs, logos, slogans, symbols, packages, characters, spokespeople and signage.
Eg: in the case the meaning of the name “IKEA” what each character represents, its distinguishing blue and...