Brand Equity Definition

740 Words3 Pages
Before defining brand equity, we must first understand what a brand actually is. A brand is a name or symbol that a company uses to identify a product or service. Branding is an integral part of company development; companies cannot afford to overlook it. A brand brings value to a company. This brings us to brand equity. Brand equity is well known and highly recognized brand that leaves a good impression on consumers. Companies achieved brand equity by creating high quality and reliable products that surpasses competition. Sometimes spending enormous amounts of money will create brand equity as well. A great example, and now cliché form of brand equity is Apple, Inc. Apple has created a brand of creating high quality, reliable, and memorable…show more content…
The price a brand commands over a similar product is called a financial method; a brand equity method that can be measured. For example, some consumers are willing to pay premium prices over a branded Samsung phone versus its unbranded counterpart. Brand extensions are used to launch new products. A brand with strong brand equity can use its leverage in the market to attach its name to a product reducing advertising cost. This also benefits the consumer who will assume the branded item will come with much lower risk. Unlike the financial method, the brand extension method is difficult to measure quantitatively. Consumer based is how strong a consumer’s attitude is towards a brand. How strongly a consumer feels about a particular brand is built with experience with a product offered by the company. A strong brand attitude leads to perceived quality and ultimately brand loyalty. Strong brand equity will increase cash flow, offer a strong asset that cannot be sold, and makes room for easier marketing. Brand…show more content…
Target stores are branded as the cleaner, sleeker versions of Wal-Mart. Often times a shoppers can easily forget that Target is a discount store. Target cleverly partners with high end fashion designers to create one of a kind limited editions product that send customers in a frenzy. Target offers incomparable retail shopping experience; something unheard of in Wal-Mart. Target keeps its name clean in the media and works to leave a lasting positive impression on consumers. "Why is brand management so important to the identity and value of a product or service?" Brand management is important to the identity and value of a product or service because it determines the financial outcome of a company. A poorly managed brand can send a company into a hole that is difficult to climb out of. It will be a bad idea for Louis Vuitton to sell its luxury handbags in Big Lots. Doing so would greatly diminish the value of the brand. A diminished value will give Luis Vuitton little justification to command higher prices for its handbags. I find myself more likely to purchase new products that are stamped with the approval of an established brand. I tell myself that I will not be shorted on quality. A strong brand reduces any risk that I may associate with the purchasing of a new
Open Document