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Brand equity and Brand Value: measures of branding effectiveness.

To view brand equity and brand value as the culminating effects or the measures of branding effectiveness is not out of place. With these two measures, you can tell if a company’s whole branding process has been successful and promises long term benefits or not.

For brand equity, it is concerned with how you have set up your brand to look in the eyes of your customer while brand value is about the financial stance that results from this positioning your brand currently has in the eyes of your customer, such that if anyone is to buy the brand, this financial effect will be the determine factor. If consumers find your brand highly valuable, then whoever may be looking to buy your brand accepts it as such and vice versa.
In continuation of our branding series, we will discuss these two key factors of branding in details and, en devour to establish the relationship between them and how that could specify the success or failure of your branding process. Let’s begin with brand equity.

BRAND EQUITY

brand equity

Brand equity refers to how the branding process has positioned the product in the eyes of the customer. I.e when considering brand equity, you want to ask questions like, “has the branding process made the product become a household name among its targeted customers? especially in line with awareness and credibility when put side by side with a customer’s need I.e., does it meet a key customer need?”
Brand equity also involves brand association. How has the brand related with it’s consumers so far? has the brand at any time, created a negative impression or feeling in the mind of the consumer towards it? The customer’s report on this really matters. Let’s say a product is branded to be 5 times more effective than its conventional fellows. If the consumer does not find it so, then the brand personality or attributes attached to that product is seen by the consumer as a lie. A customer may not like how a product functions or is not connected with the brand personality of the product, or even the values of the organization. It is not surprising to see the nature of customer service in some organizations causing current customers to leave and/or preventing potential customers from doing business with them. The Branding process, no matter how good, may not be able to help salvage this situation rather, such situations pose huge threats to the branding process itself.

Then, brand equity also involves customer loyalty. The simple explanation to this is that, a customer would rather purchase and use your product even when there are less costly options, because he/she believes that your product is quality. Infact, customer loyalty is to the point where the customer will not even bother considering other options or puting prices side by side at all. He/she already believes your product is superior. I for one believe that Ariel contains more bleach property than any other detergent so, whenever I want my whites to come out sparking after washing, I do not mind the product being more expensive than its counterparts, whether from the same or different organizations. We proceed to brand value.

BRAND VALUE

brand value and brand equity

Consider a product which does the exact thing you bought it for and, no matter how many times you’ve had to buy it, it serves that very purpose with the same high efficiency. If there were 10 persons including you, who perceived this product the way you do, and you all were in the position to advice a closely acquainted business man looking at buying over that product to his company, I can guess readily that if you all were to be genuine in your appraisal of the product, based on how relevant it has proven to be to each of you individually, the buyer can begin to see the product as a goldmine and be willing to beat off as many competitors by offering the right price for its purchase. Therefore, brand value, implies the financial stature of a particular brand. I.e how much profit can the brand generate? If someone wants to buy the brand, how much will it cost the person? it is the financial gains/loss of effective/ineffective branding as the case may be. So, brand value is purely the money aspect of the branding process.
Brand value becomes expedient during mergers and acquisitions. The amount paid to buy the brand in question is dependent on the unit of cash flow that it presently brings the company due to degree of customer patronage and market share. If unit of cash flow is high, the brand sells off at a higher price. If otherwise, the brand sells of at a lower price.

The Brand equity-Brand value Synergy.

brand value and brand equity

There is a meeting point between this two qualities of the branding process because brand equity can very much determine brand value. When brand equity is positive, that is, when consumers bear a high regard of the brand, there’s higher patronage thereby, increasing market share for the brand. This results in more revenue generated for the company and consequently, more unit of cash flow from that particular brand. For a thriving brand like this, the situation during mergers and acquisitions, for both buying and selling company is usually win-win. The selling company is able to cash out at a very profitable price and the buying company too is at an advantage to leverage on the already existing positive vibes among consumers concerning the brand, not only in the marketing strategy for the brand but also for their other products/brand. For brands with negative brand equity, the situation is, almost always otherwise.

You want my advice on how to effectively prevent these branding errors that could grow into disasters? Entrust all your digital marketing needs into the hands of a reliable digital marketing agency like Inclide.com and see how your business runs with top-notch effectiveness. Click on the ‘contact us’ bottom for a conversation with our 24/7 service representative. If you have been following our latest posts on branding, having read this one, you should be able to establish clearly how interwoven the elements of the branding process are and how one foot put right or wrong can make it mar the entire structure. If you haven’t, you’re just a click back to each ‘previous post’.

How did you find this week’s post? informative and right for your business? Let’s get your opinion in the comment section.
See you next week for another dose of wellness for your business’s online presence.

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