How Brand Equity Impacts Your Business
Serious about your building your brand? Then create a brand that consumers can grow to love. Consider establishing or increasing your brand equity.
Creating equity takes a lot of hard work; nonetheless, it has the power to extend your business line of products—potentially an increase in revenue. Considering brand equity and the role it plays in bringing added value to your business has potentially great benefits.
This article will guide you through a simple concept of brand equity that underlines the value it brings to your business.
Understanding Brand Equity
It is the perceived value of a recognizable name based on consumer behavior and market credibility
Three Advantages of Positive Brand Equity
1. Companies can raise their product or service price if their brand has positive brand equity.
2. Brands will attract more consumers
3. It helps your brand become memorable in consumers’ minds
Positive equity will boost customer loyalty and secure customer connections. Let’s take a look at Johnson & Johnson. The company succeeded in building strong brand equity for its line of baby products, which you can discover and learn more about here.
Amazon also has substantial brand equity. The company provides a continuous brand message to its consumers. The convenience, ability to evolve to meet the needs of consumers, loyalty and delivering on its promise results in rapid growth over these years.
Brand equity correlates with the attributes of brand loyalty, awareness, and perceived quality. If there is negative brand equity, there will be a direct effect on customer loyalty and consequently impact on sales.
Negative Brand Equity
When a company has negative brand equity, it impacts the business negatively. Several reasons cause negative equity, such as brands:
1. A Brand’s inability to evolve as consumers need change
2. Low-quality product or service offered to consumers
3. Inconsistent brand message
4. Unclear purpose
5. Marketing to the wrong audience amongst others. All these lead to customer dissatisfaction.
When it comes to negative brand equity, company’s have to be aware of what’s going on in the market. With rising commodity costs, Kellog had raised its price several years ago and reported a decline in net sales.
Strive to build positive brand equity and distinguish your brand from the competition. Learn more about how consumer perception and equity—positive and negative can impact your brand.