Curious why products with high prices are still being sought and sold in the market? Behind it is a long process, one of which is increasing brand equity . What is Brand Equity? In the world of marketing , brand equity is the value or value of a brand .
How consumers judge your product is different from other similar products on the market, so it has a higher value . Then how important is the role of brand equity for the success of a business? How to build good brand equity? All these questions will be answered in this article. Listen carefully!
What is Brand Equity?
Before going into further explanation, let’s look at what brand equity is and why it is important in a business. Brand equity or brand equity is the added value that a company has when compared to its competitors. Brand equity is also influenced by consumer perceptions and experiences.
Building brand equity is something that is very important for a business. If the company has superior brand equity, then consumers have confidence in the products made. They will choose a product from that brand over other products out there.
Product alone is not enough. A business must be able to offer value to its customers in order to grow. Brands that carry value become closer to their consumers and are superior to their competitors.
Komponen Brand Equity
A brand can be categorized as having brand equity if it meets the following four equity components. Check out the full explanation below!
1. Brand Awareness
The first component of brand equity is brand awareness , which is the level of consumer recognition of the brand. Simply put, at this stage the customer is made familiar with a product. When consumers are familiar with the product, it is hoped that there will be an incentive to buy it.
Strategies to increase brand awareness to consumers can be done with social media & influencer marketing , providing free trials, sponsorships , or even event marketing and conducting product placements in several places.
If you are still starting your business, one of the easiest ways to increase brand awareness is to create a website , create an Instagram account , or write a blog on topics related to your product.
2. Perceived Quality
The second component in brand equity is perceived quality, namely the subjective quality of an item in the eyes of consumers.
When you buy a product, you definitely have an impression of the product and brand. How is the quality, is it as expected, and so on.
Perceived quality is related to consumer perceptions of the superiority of a product related to the goals that have been set. Of course, to build a positive perception of the brand , a strategy is needed to improve product quality.
3. Brand Association
The third component of brand equity is brand association or brand association. This brand association relates to everything that is attached to the consumer’s memory regarding a brand . Brand association can be regarded as a connection between a brand and its concept so that it is easy to remember.
The association in question can be a logo, concept, product name, or emotion related to a person’s experience when interacting with the product.
Examples of brand associations that are often encountered, for example,
- Aqua, air mineral
- Indomie, instant noodles
- Xiaomi, affordable
- Mercedes, luxury cars
A brand is said to have high equity if it has a positive association from consumers. This is closely related to brand positioning , namely how a company positions their brand among its competitors. A brand that is positioned properly will look competitive and attractive in the eyes of consumers.
4. Brand Loyalty
The fourth element in brand equity is brand loyalty or loyalty to a brand. The positive impression that consumers feel on the product of a brand will form a commitment to repurchase the brand consistently.
Brand loyalty refers to consumer loyalty to the product of a brand. When it reaches this stage, consumers will find it difficult to switch to other products even though they are lured by low prices and so on.
Benefits of Brand Equity for Business
There are several reasons why companies continue to compete in increasing brand equity. Here are some of the benefits that can be obtained if you succeed in building positive brand equity in the eyes of consumers.
1. Get loyal customers
Brand equity is one of the effective methods to get loyal customers. With the formation of consistently positive brand equity, consumers are increasingly trusting and loyal to the brand.
This is because brand equity makes consumers believe in product quality. Not surprisingly, some brands that even price their products at high prices are still always sought after by their loyal customers.
2. Increase customer retention
If someone is satisfied with the quality of the iPhone, there is a tendency that he will choose to buy a Smartwatch, Macbook, or iPad product rather than buying products from other brands.
Consumers’ positive experience with a product will make them believe in the quality of other products from the same brand. Customers expect them to get the same quality and comfort as offered in the products they have purchased.
3. Price is no longer a problem
Apple’s latest products always sell well even at high prices. Even buyers have to be willing to queue up to get a cellphone for tens to tens of millions. Consumers dare to spend higher to get the quality they expect.
This is why, companies continue to compete in increasing brand equity. Price is no longer a problem for consumers. That is one of the advantages obtained if a brand has high equity.
4. Resistant to business competition
Brands with high equity are more resistant to business competition. With all the advantages mentioned above, it is undeniable that a company with high brand equity becomes more resilient to increasingly rampant business competition.
How to Build Brand Equity
In order to obtain the above benefits, companies are competing to use various effective methods to build good brand equity in the eyes of consumers. Here are some ways to build brand equity that you can follow.
1. Create a strong brand identity
The first step to building brand equity is establishing a strong identity for your brand. Create a brand identity that stands out and decide what you want your brand to look like from the consumer’s point of view.
Brand identity must be in line with the product being carried. What is the target market like, and why do they need your product compared to other similar products on the market. A strong brand identity will make consumers closer to the brand.
2. Convey brand value
The next step is to communicate the brand value to consumers. Brand identity must also be sustainable with the brand value that is carried.
Consumers tend to find it easier to build bonds with brands that have the same values as their own. For example, a company that is committed to being green will find it easier to bond with consumers who also support these values.
3. Build a positive perception on consumers
Creating a strong brand identity and value if it is not accompanied by satisfactory product quality will be useless. Therefore, in building positive perceptions from consumers, product quality must also be improved.
In addition to quality, consumer ratings of brands can be related to several things. Such as credibility, how relevant the product is to consumer needs, and what are the advantages over products from competitors. These things need to be considered in running a business.
4. Execute an effective marketing strategy
The next step is to apply the right marketing strategy to market the brand. Think about how to effectively reach customers because every business has a different approach, according to the type of industry and target market.
Execute an effective marketing strategy to reach the right consumers. Choose media to promote, make offers and promos to attract buyers.
5. Build bonds with consumers
Building bonds with consumers is important in maintaining the continuity of a business. Indeed this is not an easy thing.
But if this has been achieved, you will get loyal customers, tend to make purchases consistently, and don’t want to be left behind by the latest information by following your brand’s social media.
One way, you can involve consumers in developing products. Consider consumer reviews and see what they need.
Examples of Application of Brand Equity
Let’s look at an example of brand equity from a well-known coffee shop brand, Starbucks.
In 2021, Starbucks is the only food service company to be in the Top 10 World’s Most Admired Companies , among most technology companies.
This American coffee shop brand has successfully opened its outlets in several countries. Even in Indonesia, Starbucks has 440 outlets spread widely in densely populated urban areas, even on several tourist islands.
Starbucks in Indonesia is considered to have achieved success. According to sources , out of a total of 70 countries where Starbucks is located, Indonesia is in the tenth largest revenue contributor country.
Starbucks has succeeded in hooking its target market in Indonesia. Even though they sell drinks starting at IDR 40,000, many people still prefer Starbucks over other coffee shops with lower prices. In fact, many of them become loyal consumers. Why?
Of course, there are many factors that influence it, one of which is because of the existence of the brand. The Starbucks brand itself is a selling point . Not only about coffee, they ‘sell’ the convenience of a meeting place for the community. This is what makes it superior to competitors.
That was the explanation about the brand equity that we could provide. Brand equity is the added value of the company is influenced by consumer perceptions. Brand equity is very important for a company. For that make consumers satisfied with the best products and services that can be provided.
In building good brand equity, of course, effort is not instant. It takes perseverance and thoroughness to find out what the target market needs and build deep bonds with consumers.
I hope this article can help you! Read other informative articles on our blog , best wishes for online success!