Question

Why is a brand important for a company? Discuss brand equity in your answer. How can a company measure its brand equity effectively and increase its brand value?

 

Answer 1

Branding is a practice in which a company creates a symbol, name, or design to distinguish itself from other companies. It helps in making a memorable impression and know about their product and services through its brand name. Branding is important for a company as it makes it easy for a customer to remember the name of the company. It also defines the true representation of a company. The important feature of branding is that it helps in getting recognition between consumers. Consumers recognize a brand by its logo or name. Branding helps in increasing its value, if people start knowing a brand then it secure its place in a well-settled market. One can also introduce new varieties in that same brand line. It also helps in generating new customer, suppose a person likes your product and want to recommend it to some other person, with the help of branding he can easily recommend it to another person. But without a brand name, it wouldn't have possible. A well-known brand wins the trust of the consumers. People like to purchase the product of that brand and also want to work with them. With highly known brand emotions also get attached to the consumers. People use brands to show their status and also able to spend a lot of money on their products. Nowadays, the brand is the only thing on which people trust before buying any new thing as the brand has developed trust within them. There is a thing which people have developed within them that branded things are more durable than non- brand things. That is why companies are trying to develop their brand name in the market with the help of providing good quality products and also advertisement. There is a value of every brand which is called brand equity. Brand Equity is important as it suggests if your brand has a positive impact then you can charge more from your consumers and if you have a negative impact then consumers will choose other products over your brand products. There are several components of Brand Equity-

1) Tangible and Intangible- Tangible includes revenue and price you are charging and intangible includes goodwill and the awareness of your brand.

2) Perception of Your brand- Create higher quality products so that it lasts. For example- If you have ever been to crowded apple store. It seems that Apple is giving away its products but in fact, its prices are too high but because of its brand value and lasting product.

3) Consumer- Always give preference to your consumer. The consumer is King. If the consumer gets satisfied with your product then he will definitely be loyal to you.

You can evaluate your brand equity by reading the perception of your customer and employees. If there are underlying problems with the brand's culture then there will be underperformance issues. Customers should know about your brand. You can use many methods to remind consumers about your product. As it is very important aspect of brand equity. Some methods to know how much customers know about our products are as follows;

1) Surveys and Forms.

2) Search Volume of brand products.

Consumer preference plays an important role in buying decisions, if they are likely to spend more money or not it is known as Preference Metrics. We can measure this by Focus groups, sales data but it should include that according to consumers what is brand relevance and accessibility. There are some ways to measure brand equity through financial metrics such as Average transaction value, customer lifetime value. Financial metrics mean to know about how much your brand is generating revenue and about sales output. There is some other way through which you can measure your brand equity by knowing about your competitive metrics, as it has a direct influence on our company. It will help us to deeply analyze where we are going wrong. It can help us to know some tricks also.

We can improve our brand equity by following these things

1) Strategy- Create a brand strategy so that the consumer can remind your brand again and again. Use advertising to attract consumers and provide your products at every place so that consumers can easily purchase it. There should be an adequate supply of products at every place.

2) Reputation- Nowadays, company reputation can be built in a minute and also can be destroyed within a minute. Always provide good quality products to your consumer. Provide after-sale services and always listen to complaints. These things attract consumers by giving them satisfaction.

3) Awareness- The Internet is growing at a large scale, run your ads on every social media. You can also contact influencers to aware of your product. This a very great platform to connect with your consumer also. The more consumers are aware about your product there is a chance that they will once in a while definitely purchase your product.

4) Communication- It helps in connecting with your consumer. You can use email and messages to inform your consumer about your new launches or great discounts. Not only with consumers, but there should also great communication with financial advisors, legal experts and etc.

5) Value- They should provide satisfaction and by promising superior value to the customers. It will not only attract new customers but will also help in retaining the old consumers too. Providing them products at reasonable price and with good quality.