Chapter11: Product Concepts, Branding, And Packaging
Section: Chapter Questions
Problem 7DRQ
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Question
What are the components of brand equity?
Expert Solution
Step 1
Brand equity is essential to point out the differences that lead to competitive gains based on priceless competition. It is the power and ability in the minds of consumers to identify a product. Then the purchase of the product leads to increased sales and increased profits against similar competing brands.
Step 2
Following are the components of brand equity:
- Brand Awareness: The initial step in the brand-building procedure is to create awareness about the brand name in the minds of consumers. This means that users are aware of the brand and can relate to a particular category. Building brand identity can boost marketers to increase brand visibility to target audiences through various promotional campaigns.
- Brand Association: Anything a consumer has to do with their favourite brand is a brand association. It is important to have a good brand association because it leads to repeated sales and gives the business word of mouth marketing. Such associations influence the brand and give new time to those entering the market.
- Brand Experience: It is a combination of customer experience with the overall brand. When consumers have a good brand experience they will consider the brand to be the best and prioritize it over others.
- Brand Loyalty: Brand loyalty is the brand preference of the consumer compared to similar products in the market. This can lead to repeated sales and is the best way to gain word of mouth. If a company has high brand loyalty, this will help reduce marketing costs. The company can also introduce new products aiming at the same customer base.
- Brand Preference: This is another component of brand equity and can be overcharged for a similar product. However, organizations need to ensure that users have a good experience and relationship with the brand.
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