Building Strong Brands

1. Brand equity is a set of assets that add value to a product or service

Brand equity is a set of assets (and liabilities) linked to a brand's name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm's customers.

Brand awareness is the strength of a brand's presence in consumers' minds. It ranges from recognition to recall to top-of-mind awareness. High awareness can lead to familiarity and liking, which can influence purchase decisions.

Perceived quality is a key dimension of brand equity. It drives financial performance, often serves as a strategic thrust for businesses, and is linked to other brand perception aspects. Perceived quality can differentiate a brand and justify premium pricing.

Brand loyalty is a core dimension of brand equity. It provides:

• Predictable sales and profit stream
• Reduced marketing costs
• Barrier to competitor entry
• Time to respond to competitive threats

2. A strong brand identity is crucial for building and maintaining brand equity

A brand identity is a unique set of brand associations that the brand strategist aspires to create or maintain. These associations represent what the brand stands for and imply a promise to customers from the organization members.

Brand identity structure includes:

• Core identity: The central, timeless essence of the brand
• Extended identity: Elements that provide texture and completeness
• Value proposition: Functional, emotional, and self-expressive benefits

Avoiding identity traps is essential:

• Brand image trap: Letting customers dictate the brand
• Brand position trap: Focusing only on advertising taglines
• External perspective trap: Ignoring internal brand-building
• Product-attribute fixation trap: Neglecting other brand dimensions

3. Organizational associations can provide a sustainable competitive advantage

An organization is usually more enduring, complex, and permanent than a particular product line. A perception of an organization is therefore more difficult for competitors to combat than specific brand attributes, which can be easily surpassed.

Types of organizational associations:

• Society/community orientation
• Perceived quality
• Innovation
• Customer focus
• Presence and success
• Local vs. global orientation

Benefits of organizational associations:

• Differentiation in crowded markets
• Credibility for product claims
• Emotional connection with customers
• Basis for brand extensions

4. Brand personality helps create emotional connections with customers

Brand personality can be defined as the set of human characteristics associated with a given brand.

The Big Five brand personality dimensions:

1. Sincerity (down-to-earth, honest, wholesome, cheerful)
2. Excitement (daring, spirited, imaginative, up-to-date)
3. Competence (reliable, intelligent, successful)
4. Sophistication (upper class, charming)
5. Ruggedness (outdoorsy, tough)

Benefits of brand personality:

• Vehicle for customer self-expression
• Basis for customer-brand relationships
• Representation of functional benefits

5. Consistency in brand identity over time is key to building strong brands

There is no doubt that the goal should be to create an effective identity whose position and execution will endure and not become obsolete and/or tired.

Benefits of consistency:

• Ownership of a position in consumers' minds
• Ownership of identity symbols
• Cost efficiencies in marketing

Challenges to maintaining consistency:

• Pressure to compete on price
• Proliferation of competitors
• Fragmentation of media and markets
• Temptation to change a sound strategy
• Pressure for short-term results

6. Leveraging brand equity through extensions can create new growth opportunities

One recipe for strategic success is to create and leverage assets. With its awareness, perceived quality, associations and customer loyalty, a brand is usually the most powerful asset that a firm owns.

Types of brand leveraging:

• Line extensions: New versions within the same product class
• Vertical extensions: Moving up or down in price/quality
• Brand extensions: Entering new product categories
• Co-branding: Partnering with other brands

Considerations for brand extensions:

• Fit with brand identity
• Ability to provide a competitive advantage
• Potential to enhance or dilute brand equity
• Opportunity cost of not developing a new brand

7. Measuring brand equity across products and markets provides valuable insights

Good management starts with good measurement, and the key to managing a portfolio is a common set of measures.

The Brand Equity Ten:

1. Price premium
2. Satisfaction/Loyalty
3. Perceived Quality
4. Leadership/Popularity
5. Perceived Value
6. Brand Personality
7. Organizational Associations
8. Brand Awareness
9. Market Share
10. Price and Distribution Indices

Benefits of cross-category measurement:

• Benchmarking against the best
• Insights into brand-building strategies
• Tools to manage brand portfolios
• Balance short-term financial measures with long-term brand asset measures

Last updated: November 19, 2024