Brand equity is referred to as outcomes that are attached to a product that have brand name compared with the same product that does not have a brand name (Florian, 2012). This means the benefits that a product achieves via the power of its brand name. The brand equity is a significant marketing driver for the business operating in a huge market and via distribution channels in the fast moving consumer products market. This is so because brand equity focuses on drive product and brand investment decisions. Thus, the business should evaluate brand equity as an investment that will receive returns in the future and invest wisely on the type of brand equity that will generate good returns. The business should create brands that can be recognized by consumers whenever they see them because such brands will lead consumers to create an image of the brand that is vital to their needs. Brand equity will be extremely vital in the business of selling cosmetic products.
Brand equity has several components which together make up the concept which include consumer based measures, product market level outcomes and financial market measures (Barlow and Stewart, 2000). On the consumer based measures, the brand value is obtained in the marketplace from the actions of consumers. These measures are based on brand knowledge by consumers that influences hi or her behavior, and brand equity can be captured from awareness, association, attitude and attachment to an activity. On the other hand, product market level outcomes include measures of price premiums, increased advertising and decreased sensitivity to competitor’s prices. The financial market level is where brand equity is measured based on the financial market performance like market share of the business.
The research has indicated that buying intentions and brand loyalty intentions are the consequents of brand equity. A high brand equity for a product in a consumer’s mind ensures a high chance on the part of the consumer to select that product over others. Therefore, it creates a high chance that the consumer will repeat the same purchasing behavior, which is the brand loyalty intention. This shows the brand equity affects the purchase decision of consumers while preferring a particular product over others. Thus, a high brand equity will result in high profitability for the cosmetic business. It should focus on the brand equity by having strategic brand management, coordinating all other elements in such a way which will enhance brand equity.
Brand equity is a main marketing tool which can create a unique and welcomed relationship that differentiate the bond between the business and the owner. It also helps to nurture a long term purchasing behavior of consumers. Understanding the dimensions of brand equity, then investing to develop it raises competitive barriers and drives brand wealth of the business (Barlow and Stewart, 2006). For my cosmetic business , growing brand equity is a main objective that will be achieved via gaining more favorable associations and feelings among target consumers. However, the customer based brand equity will fail to exist if the brand is not favorably associated with the customer’s memory. Therefore, the degree of dislike for a brand because of its unfavorable associations will make that brand to score null on brand equity measure.
A business will have a consistent strategic branding that would lead to a powerful brand equity, which allows the added value brought to the business’s products compared to that of competitors (Florian, 2012). For instance, the cosmetic business will create a strong brand equity, which shows it could increase the price for its product and customer continue paying for the same products at any price. The corporate societal marketing can help the business to improve brand equity because it is designed to help the society. Many marketing strategies end up using the company’s resources but does not have a significant economic objective. Therefore, the business should realize that consumer’ perceptions about its products and its role in society can drastically affect a brand’s equity because consumers prefer brands that assist others.
Brand equity will help the business expand its operations via excellent brand extensions and expansions. This will enhance its sales and revenue, as well as decreasing the cost of production (Florian, 2012). For instance, cosmetic brands with attractive colors will require little promotions because the brand color makes the brand generate a positive equity. This color strategy will demonstrate communication and creativity, which reflect the style. This positive brand equity will sustain the business for a long term success. This is so because consumers will tend to forego the weakness of the brand due to deep emotional connections and loyalties that they have for color brand. Since the cosmetic industry is so dynamic, the business should employ marketing strategies such advertisement and positioning that handles the changing behavior of consumers.
In a recap, brand equity provides great insights into understanding the consumer behavior and creating competitive advantage of the business. It helps business to focus on understanding consumer perceptions, such as awareness, image and association as well as marketing strategies to create brand equity. Brand equity is a vital part of creating a business, but it takes time and strategy to create a positive brand equity.
References
Barlow, J., Stewart, P. (2006). Branded customer service: The new competitive edge. San Francisco, CA: Berrett-Koehler.
Florian, S. (2012). “The Impact of Brand Equity on Customer Acquisition, Retention, and Profit Margin.” Journal of Marketing,Vol. 76 Issue 4, p44-63.
