Friday, 30 November 2012

Beyond Figures: Brand Equity for Beginners

Touching upon a related topic now - Brand Equity (very closely related to Brand Value.)

To quickly Wikipedia it, Brand Equity is a phrase used in the marketing industry which describes the value of having a well-known brand name based on the idea that owner of a well-known brand name can generate more money from products with that brand name than from products with a lesser known name. This is because the consumers believe that a product with a better known name is better than the product with the lesser known name.

Makes sense. But how would you 'measure' Brand Equity?

Without trying to sound overwhelming, BE is measured by the popular Aaker Model. Now David Aaker says that BE is a psychological measurement of the retention strength in a person's mind. In marketing, this would be the strength of retention of 'Brand Presence' without aggravation. Hence, recognition plays a significant role in garnering every foothold of awareness.

Let's quickly explore each of these Brand Assets in very simple terms -


Plainly speaking, recognition of a friend's face from another's, or a product from its closest rival is the discerning factor of differences between each. Brand recognition answers why one brand differs from another, which could be positive or negative.

However, types of awareness in Marketing also differ from each other depending on the point of view of the customer or audience.

Brand Recall:

This refers to a particular product class. This is often seen in basic fashion and footwear wherein a particular model stands out. For example, premium basketball shoes equates to the Nike Air Jordan.

Brand Name Dominance:

This occurs when the audience can only recall the name of a single brand. For example, Xerox for photocopiers, Kodak for films, and Coke for soft-drinks.

To create awareness is no easy thing to do or achieve. For most, it takes decades such as those mentioned above; and for some, just a short amount of time is needed with the help of advertising., Flipkart, Kingfisher have made it big among people with an online shopping OCD, a reading interest, and of course a large beer belly. The companies behind them only took 3 to 5 years to be on the leader board and take market share. It also took them millions, may be even billions, of Rupees of spending on advertising costs alone.


Perceived Quality has been shown to directly affect Financial Performance.

It is the single most important contribution to Return On Investment (ROI) which enhances price of the product and the company's stock price.

We often see this among high-end luxury goods like a Sabyasachi, Hidesign, Ritu Kumar etc. Moreover, it is a major driver of customer satisfaction.

Perceived Quality as a Strategic Thrust.

This forms the foundation by which companies base how their own company brand should be perceived as, and reinforced by the right mix of the 4P’s in Marketing (price, product, promotion, and place.)

For example Saravana Bhavan (or take an Adigas) -brands catering to fast, efficient and delicious meals, is priced towards the base of the marketing pyramid. With a  greater majority of the population belonging to the middle to lower classes in India, good food at modest prices makes perfect sense.

Perceived Quality is linked to and often drives other aspects of how a Brand is perceived.

Given the strategic thrust mentioned above, true understanding of a customer's point of view of 'world class service', should be of utmost importance. However, Perceived Quality is not equal to the Actual Quality. The prominence of a particular product in Advertising overshadows the Actual Quality of a product.

One of the top Cellular Telecommunication companies (you know who!) spends billions of Rupees and promises to provide the fastest mobile Internet connection, widest coverage etc. 

But in reality, customers find difficulty in connecting to the Internet and experience slow speeds. Customer service is, likewise, abysmal. In this scenario, it is very important to protect the overall brand than the product.


There is a saying in Marketing which holds true, “It is less costly to retain customers than to attract new ones”. Brand Loyalty encourages and justifies loyalty building programs. Loyal customers will always provide value to a commodity or service through referrals and endorsements with multiple purchases. Empower your current customer to be sellers themselves, multiplying your sales base/manpower immediately. No form of advertising can equal true testimonies of real customers.


Brand Identity can simply mean the colours, shape and look of a company's or product's logo – the yellow arches of McDonald’s or the swoosh of Nike.

However, one should look beyond the obvious and classify Brand Identity as an establishment of relationships between the Brand and Customer by generating a value proposition involving functional, emotional and self expression.


Brand Association reflects the same or equal status of two or more brands in competition with one another or otherwise. In events-marketing, companies often approach similar non-competing brands for sponsorship purposes. Brand Managers from FMCG companies often ask, “Who else is sponsoring this event?” – because brand associations are critical in building a strong brand.
For instance, Nike strategically aligned with another premium brand that is known to think differently. Nike hooked up with Apple for its Nike + Ipod campaign where Nike shoes are fitted with an Apple transmitter that can record the pace, distance and location of its customers. 

More recently, we saw Sunsilk collaborating with the top hair experts from around the world - from New York to Japan. As if stating that they are also a premium brand that’s supported by experts who charge $1,000 per haircut!
Brand Associations can easily position or elevate a brand simply with partnerships and alliances with other brands in creating a new service, product or advocacy for that matter.

Given a brief understanding of the key components of Brand Equity and how it goes beyond the figures, so as to speak, companies can easily identify their position and strategy in creating their own marketing campaigns and promotions effectively.

Ultimately, it is our Brand that forms the very foundation of our business!


  1. I am one of more dissapointed customer of I had placed an online order of a pair of shoes and dress. I got this order timely and was impressed with their services but after unwrapping my order I was shocked to see the packet. That was containing both of the products but the shoes were not like I had seen on their site. When I called at customer care they told me to replace that pair of shoes. But still no one came from their after calling them thrice in a week.
    I have filed an complaint against them on their site as well as at Consumer Court site but so far no action has been taken on this case. Please help find me the relevant solution or just be aware while online shopping.

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