As a marketer, your focus is naturally on your business brand. Growing that brand, making it strong and recognisable within your target market and then leveraging its value to create sales are all vital objectives for your marketing strategy. And, as part of this work, it is important to understand the concept of brand equity. Let’s take a closer look.
What is brand equity?
Brand equity is a theory proposed by various academics and marketing consultants to measure the value of a brand. Various definitions exist, but in its simplest form it is the difference in value between a product without a brand attached to it, and the same product but with a brand name.
There are different elements of brand equity. These are generally held to be brand awareness, perceived quality, brand association, brand loyalty and any other assets owned by the brand.
Why does it matter?
If you can assess your brand equity, you can understand how valuable your brand actually is and what this translates into as bottom-line cost and pricing terms, not to mention profits. A company with a strong brand will have an asset that it can leverage to create bottom-line results.
How can you calculate your brand equity?
Many businesses will use specialist help to get a sense of their brand equity and attempt to quantify this value, especially to baseline a current position and then evidence improvements over time. A brand strategy agency such as Really Helpful Marketing can assist with this work.
Typical ways of measuring brand equity might include a blend of hard and soft measures, such as profit margins, growth rate, price elasticity and purchase frequency, plus consumer sentiments, social media buzz and so forth.
Ways to build brand equity
A good brand and marketing strategy will be able to build brand equity over time with appropriate measures such as brand building for awareness, positioning, endorsements and advertising and so forth. A strong brand is a key asset for a business and it can be leveraged for success, so it’s vital to understand this concept and then maximise it.
