I would define brand equity as:
the measure of the loyalty built by a brand in the mind of satisfied customers in relation to the total number of customers knows about it”. It’s measures how customers are emotionally connected with the brand.
I classify the term “measure” into two: positive measure and negative measure. Just like in directed numbers (number line in mathematics), positive measures increase the level of brand equity while negative measures decrease it. Positivity in brand equity is brought about by satisfied customers who are happy and loyal with the brand offers. The loyalty comes with the trust and confidence they feel in their mind each time they hear and speak about the brand.
These loyal base customers become the best and fastest promotional element possible for the brand. Customers become satisfied when a brand finally solves their problems at a satisfactory cost. Through advertising and promotion, company tend to market their brands but with the power of loyal customers, brand equity increases even when the potential customers haven’t yet tested the brand.
Take for instance, I as a loyal customer have used shell gear oil to lubricate my differential and it works perfectly well. If a friend is in need of a gear oil, definitely I wouldn’t just recommend shell but I will educate him on the product in such a way that even when his problem is not solved efficiently, he would blame his device rather than shell product because his trust for shell has been won already and he confirmed it from me his friend (afterall, I showed him where it worked). This is what a loyal base customer does to build up brand equity.
Advertising and promotion also build brand equity in the mind of individuals. When individuals continuously keep hearing about a particular product every where and time, they begin to trust it even without having tested it. These individuals always recommend such products to people that may need it. For example, I haven’t purchased any product from Imperial Interior Dubai but because I have seen people talking about them and I always see their 3D flooring being discussed in several blogs, I would recommend them for someone from Dubai who desires for such services.
Indirectly, brand equity level increases also through brand partnership with other companies and following open innovation. When a company partners with other companies, these partners help them market their brand. Knowing fully well that the company which happen to be its partner have lots of loyal base customers, so out of the trust and confidence these customers have for the company, they can easily be influenced because they believe that whatever the company does or whoever it relates with should be as great as it is. Open innovation also helps to build brand equity where a company gives open room for developments from other technological firms, these allies can as well get loyal base customers which can be won for their partners.
Building Brand Equity is of critical importance to the market value of the brand’s owner because the higher the brand equity, the easier it becomes to win customers from competitors and the greater the market share of the company. Brand is the factor or collection of factors that catalyzes a customer’s purchase experience till building of loyalty in the customer’s mind after being satisfied. While brand equity measures the level of loyalty (trust and confidence) built by a brand with respect to the total number of customers who are aware and/or have tested the brand.
5 Stages of Brand Experience Which Leads to Positive Brand Equity
Brand equity is typically the result of brand loyalty, and with brand loyalty comes increased market share. In fact, there are 5 stages of brand experience that lead to positive brand equity:
- Brand awareness : Consumers are aware of the brand.
- Brand recognition: Consumers recognize the brand and know what it offers versus competitors.
- Brand trial : Consumers have tried the brand.
- Brand preference : Consumers like the brand and become repeat purchasers. They begin to develop emotional connections to the brand.
- Brand loyalty : Consumers demand the brand and will travel distances to find it. As loyalty increases so do emotional connections until there is no adequate substitute for the brand in the consumer’s mind.
Once consumers reach the brand loyalty stage, your work isn’t done. The challenge is not only building brand equity to reach widespread loyalty, but also to sustain that loyalty and positive brand equity for years to come. Therefore I would advice that brand equity should be quantitatively and continuously be assessed and company should focus on ways to retain and increase the level of positive measures of its brand.