Building Brand Equity
By Tom Hickman
Branding has existed for centuries as a way for producers to distinguish their products from those of the competition. Successful branding is critical since brands that do not have positive differentiation from the competition are essentially seen as generic options in their product category. For example, for a consumer that sees no meaningful difference between Coke and Pepsi, these brands become completely interchangeable and a price-based choice is the likely result.
Importantly, anything can be successfully branded. The key to success is that customers understand how the
brand is different and that they assign value to that difference. Brand equity is commonly referred to as the value of the customer perception of the brand, as opposed to the value that is created from the actual products or services. Building brand equity is a key component to the overall health of an organization
since it is associated with larger margins, greater support from business partners, increased loyalty, assistance in new product introduction, and insulation from competitive marketing tactics.
BUILDING THE BRAND
The four building blocks for the creation of a strong brand all hinge on consistency in messaging to the target market. You need to understand what your target market values and how your brand meets those needs. Then, you need to have an unwavering commitment to consistency in explaining how your brand is able to satisfy the customer.
1. Brand Salience
The first building block to creating a strong brand is to simply have customers know that your brand exists. Eventually, you want them to have top of mind awareness of your brand when they think of the product or service category that you are in, rather than to remember you only after they have done an internet search of businesses in the area. Focus on communicating the key elements of your brand that are highly valued by the target market.
2.Brand Meaning
This component has two distinct facets—brand performance and brand imagery.
Brand performance relates to the target market’s assessment of the functionality of the brand. In other words, does it meet the needs of the customer? Focus marketing communications on things that matter to the customers. These include service effectiveness, product reliability, product serviceability, innovation, potentially price, as well as other attributes that your target market values. Always supplement any pricing messaging with important information about quality. You would much rather customers think about how good your brand is, as 4 opposed to it being cheap!
Brand imagery is focused on meeting the psychological and social needs of the target market. The goal is for customers to possess a mental image of idealized users of the brand. This can be accomplished through creating a brand personality that reflects the human values that you want your brand to portray. For instance, Mountain Dew has long been effective at creating an exciting brand though imagery that connects Mountain Dew to activities such as hang gliding and the X-Games. To put this in action for your brand, think about the personality you want your brand to exude and then go to work to find ways to consistently tie your brand to that imagery.
3 Brand Response
This element of brand building concerns what customers think about the brand as it relates to their brand judgments and feelings about the brand.
Brand judgments include how customers think about the quality of your brand and how credible your brand is based on their assessment of expertise, trustworthiness, and likability. The key factors here can be summed up as being perceived as having superior product knowledge, keeping the interests of the customer in mind, and being likable. Crafting the brand personality with these issues in mind leads to favorable brand judgments.
Brand feelings are the customer’s emotional responses to your brand. Focusing on tapping into emotions that align with the brand is the goal. Key emotions to consider are warmth, fun, excitement, sincerity, and security. Again, the brand personality you create has a major impact on the feelings that come to mind for the customer about your brand. Alternatively, if your brand has no personality, creating strong and positive feelings about the brand is an uphill struggle!
Brand Relationships
Ultimately, you want to get to the point where your brand is the only brand customers consider in that product category. To attain this level of loyalty, customers must feel an attachment to the brand. Iconic examples include Apple, Harley- Davidson and Jeep. The creation of a community of users is impactful to develop this strong brand relationship. Social media can be used to encourage engagement with the brand and to bring customers together to share stories about the brand. Events, such as Harley-Davidson’s Harley Owners Group and Jeep’s Jamborees can also be used to build camaraderie with other brand loyalists.
THE BRAND AUDIT MEASURING THE EFFECTIVENESS OF THE BRAND BUILDING STRATEGY
After you have carefully considered how to build brand equity and have implemented actions that include improving brand awareness, increasing the perception of the brand’s performance, and attaching a meaningful personality to the brand, how do you know if the customer is receiving the message that you are sending? A brand audit is the answer. It can be thought of as a way to determine the sources of brand equity from the customer’s point of view. This exercise should be completed on an annual basis. It is very customer- focused and provides guidance for future brand building efforts. There are two steps to the audit – the brand inventory and the brand exploratory.
1 Brand Inventory
The idea behind the brand inventory is to create a comprehensive list of all of the things the brand is doing to market its products and services. For example, Rolex uses its crown logo, exclusive dealers, communication about the usage of superior materials, celebrity brand ambassadors, and philanthropic activities such as their Mentor and Protégé Arts Initiative. All of this is focused on building the brand into one that is associated with prestige and excellence.
2 Brand Exploratory
This phase of the brand audit is dedicated to determining exactly what the customer thinks of your brand as it relates to all of the elements of the brand building process. Ideally, this step is completed in two parts. First, interviews should be conducted with members of the target market to determine an in-depth understanding of their perception of the brand. Then, those insights can be used to help create a questionnaire that can be given to a larger number of target market members to obtain a very good idea of how current and potential customers view your brand. Sample findings from the Rolex study determined that it has the highest brand awareness of any luxury watch brand, that it is associated with being hand-crafted, and possesses social value through its high-status imagery. On the negative side, some members of the target market associated it with being flashy and mostly for older men. Therefore, the brand exploratory provides important guidance for future marketing efforts to both capitalize on the positive interpretations of the brand and address the negative perceptions.
Summary
In building your brand, you need to have a complete understanding of the message that you want to communicate. This revolves around understanding what the customer wants and how your brand delivers. You need to have a balance of fact- based information and an emotional component that builds the personality you want for your brand. Resist the temptation to talk too much about price. You cannot build a strong brand by training your customers to focus on the price tag. Instead focus on creating a connection with the customer on quality dimensions that are meaningful to them. Finally, continually track the success of your brand building through regular brand audits and make changes as needed.
Tom Hickman is the MBA Director and an Associate Professor of Marketing for the Washburn University School of Business.
