Brand equity refers to the intangible value that accrues to a company as a result of itssuccessful efforts to establish a strong brand. A brand is a name, symbol, or otherfeature that distinguishes the companys goods or services in the marketplace.Consumers often rely upon brands to guide their purchase decisions. The positivefeelings consumers accumulate about a particular brand are what makes the brand avaluable asset for the company that owns it. Alan Mitchell of Marketing Weekdescribed brand equity as "the storehouse of future profits which result from pastmarketing activities."
Positive brand equity can help a company in avariety of ways. The most common is thefinancial benefit which enables a company tocharge a price premium for that brand. Forexample, the Tiffany’s brand has enoughequity that a price premium isn’t justaccepted, it’s expected.
Key Drivers of Corporate and Brand IdentitySalience: relates to the depth and breath of brand awareness in terms of ease of brand recognitionand recallPerformance: satisfaction of the customer functional needs such as the product’s characteristicsand features i.e. reliability, durability, style, design and priceImagery: satisfaction of customer’s psychological needs such as type of purchase and usagesituations, and any perceived values from customersJudgments: focus on customer’s opinions based on Performance and Imagery dimensions i.e.Brand quality, brand credibility, brand consideration and brand superiorityFeelings: customer’s emotional responses and reactions to the brand such as warmth, excitement,fun, security etc.Resonance: relationship and level of identification of the customer with the brand. This typicallyallows customers to be proud of owning the brand, creating a sense of behavioral loyalty andactive engagement, resulting in potential repeat purchases
Good to Good to excellent excellent extension candidates for candidates extension within within the parent and outside category parent category Weak extension Weak extension candidates candidatesBrand extensions are are certainly less expensive than building a new brand from thescratch. If a brand has strong equity and an established customer franchise, theextensions may even have a ready-made market. The problem arises when companiesstretch brands in ways and directions that don’t make sense.
What makes a brand relevantin 2012? Curiously not thesame as in 2011. In a time ofsocial media, Facebook,cloud computing, financialcrisis, emerging markets,disruption and changingvalues brands are evolvingand the DNA of a successfulbrand is partly done throughthe way you engage youraudiences, network andcreate value, renewal theprojection strength.