Introduction
In the current era of globalization, brands are major drivers of the financial performance of companies. Brands enable an organization to add value to the products of a company, and increase market performance of the products offered. Brand equity is therefore an effective measure for marketers who are active in developing strategies for particular brands to enable them understand past and future courses of action. Customer-based equity refers to the differential result of brand knowledge on customer response to the brand marketing (Keller 212). When customers react more favorably to an aspect of the marketing mix for the brand than they would do to other fictitious brands, then the brand is said to have positive brand equity. On the contrary, if customers react less favorably to an element of the marketing mix, then the brand has negative customer-based brand equity. Brand equity happens when customers are familiar with the brands and hold positive associations with the brand. Thus, brand equity enables marketers to understand brand loyalty and knowledge better when consumers prefer branded products to unbranded products. This paper analyses the various elements of consumer-based brand equity and the value to market performance.
How to build customer-based brand equity
Building strong brands has become a top objective of most organizations because of the financial rewards associated with strong brands. Strong brands with indicative equity have been seen to provide numerous benefits to an organization such as customer loyalty, brand-extension opportunities, greater profit margins, and less vulnerability to competitor’s actions among other benefits. The consumer-based equity model enables a marketer to understand what makes strong brands and the ways of building strong brands. According to this model, building strong brands is a series of steps in which each step depends on the successful completion of the previous steps. The process of building strong consumer-based brands involves four stages.
The first stage is about brand identity with consumers and ensuring an association of the brand in the consumers mind (Keller 121). In order to achieve the right consumer identity, marketers need to create brand salience. Brand salience deals with elements of customer awareness with the brand. Salience is about how often certain circumstances or situations evoke brand and how often customers easily remember or recognize brands. Salience provides the basis for building customer equity by performing three crucial functions. The first function is that salience affects the development of consumer brands and the strong associations that provide the brand with meaning and make up the image of the brand. Brand salience also enables consumers to consider certain brands and helps consumers in consumption setting to maximize potential use. The last function of brand salience is that it enables with low involvement with certain product categories to make choices.
The second step in building strong brands involves establishing brand meaning in the minds of customers through connecting several tangible and intangible brand associations (Keller 111). Developing consumers brand meaning involves creating a brand image in the customer’s mind. Two major categories of brand associations make up brand meaning. The first category is brand performance that deals with the experiences of customers with brands and information they get from others or from the company about brands. Thus, brand performance involves inherent characteristics of the brand that help in satisfying consumer needs. These features of consumer brand performance include product durability, reliability, style, design, service efficiency, and effectiveness. Other attributes include the primary and secondary characteristics of the product. The other category of brand meaning is brand imagery. Consumer brand equity needs to have meaning and create an image in the customer’s mind. It involves the abstract thinking of brands rather than actual performance of brands. Thus, it is what the consumers think about brands abstractly such as value, experience, usage, and purchase situations.
The third step in building consumer brand equity is to draw out the right consumer responses to the brand equity and brand meaning. It refers to what the customers feel about the brand and its marketing activities (Keller 67). It is possible to differentiate brand responses in terms of brand judgments or brand feelings for customers. Customer brand judgments concentrate on consumer’s personal evaluations and views regarding the brand. Customers are likely to form several judgments regarding brands, but four types of judgments are common. These include brand quality, credibility, consideration, and superiority. Consumer brand feelings, on the other hand, refer to customer’s emotions and reactions regarding the brand. Some of the most important brand-building emotions include excitement, fun, warmth, self-respect, security, and social approval.
The final step in building strong customer-based brand equity involves converting the brand response to develop a deep and active loyal relationship between the brand and the consumer. Consumer brand resonance is the characteristic of the relationship between the customer and the brand in terms of intensity and depth of the bond. Consumer resonance can be in four categories that are active engagement, behavioral loyalty, attitudinal attachment and a sense of community.
Elements of consumer based brand equity- Brand loyalty
Brand loyalty is one of the major elements of consumer brand equity. It measures the attachment of a customer to a certain brand (Vazquez et al. 32). Brand loyalty enables marketers to develop and retain a comfortable lasting position in the market. Consumer brand loyalty happens because of the consumer’s perception that the chosen brand offers the proper quality, product features, image, and the right price. The positive perception becomes the basis for the new buying habit for the consumer. At first consumers make trial purchases of the brand and if it offers satisfaction, consumers make repeat purchases and develop a habit of buying the same product because of its familiarity and security. Consumer loyalty is important to organizations because it creates increased sales volume because the brand customers purchase the brand repeatedly. With increase in brand loyalty, consumers are less sensitive to changes in price and continue to seek a particular brand because they are familiar with it. Consumers are willing to pay higher prices for their brands because of perceived remarkable features not found in alternative brands. In addition, consumers that are loyal to certain brands are less responsive to competitive forces and pursue their favorite brands to the end. Therefore, companies incur less advertising costs, marketing and distribution costs. Customer loyalty is the foundation of consumer brand equity developed by many factors such as use experience (Fayrene and Gee 35). Therefore, customer loyalty to certain brands results to customer-based brand equity when favorable feature lead to repeat purchases.
Brand knowledge
Brand knowledge is another important element of consumer-based brand equity, which creates the differential effect for driving brand equity. Customer knowledge about brands enables marketers to make the right choices by equipping them with knowledge about loyalty, customer satisfaction, branding, and innovation among others. “Brand knowledge is a function of awareness, which relates to consumer’s ability to recall or recognize the brand and image that consists of customer’s perceptions and of association for the brand” (Fayrene and Gee 38). Therefore, consumer knowledge can be identified in terms of two major features i.e. brand awareness and brand image. Customer awareness assists marketers in quantifying the trends and levels of consumer knowledge and awareness of the existence of a particular brand. On the other hand, customer image refers to the perceptions regarding a brand as shown in the consumer’s memory with brand association. Marketers can create a positive brand image through linking favorable and unique features of the brand to the customer’s memory. Customer knowledge involves important activities that lead to consumer brand equity and customer loyalty. It covers the ability of the consumer regarding awareness of the product, product attributes, where the consumer can get the product, the company that makes the product, the usage of the product, its purpose, and other unique attributes of the product. Thus, marketers should aim at creating customer knowledge by changing experiences to beliefs and beliefs to experiences.
Brand awareness
Consumer brand awareness occurs when consumers recognize companies’ brands as theirs. It refers to the degree by which consumers can recognize a brand and appropriately associate it with certain products. It enables marketers to be able to promote a product because the product has unique features from that of its competitors. Customer awareness involves both brand recall and brand recognition. Customer recognition refers to consumer’s ability to differentiate brands because the consumer recognizes the brand from having seen it earlier or having heard of the brand before.
Consumer recall on the other hand, refers to the ability of a customer to remember a certain brand after someone gives the customer a clue about the brand. Generally, it is easier for a customer to recognize a brand rather than recall it from his or her memory (Washburn and Plank 54). To improve consumer awareness, marketers should select brand names that are easy to pronounce, simple, unique as well as unmistakable names. It is vital for marketers to build consumer awareness because it aids in building customer-based brand equity. Marketers can build awareness by using advertising, publicity, social media, and sponsorship. Marketers should communicate consistent messages in awareness campaigns to achieve greater sales and a wide market share. Therefore, brand awareness refers to the manner in which consumers familiarize themselves with particular brands and can be able to recognize them hence develop loyalty and eventually consumer brand equity.
Brand association
For marketers to develop consumer brand equity, it is crucial that the brand has a firm, favorable and distinct consumer association. Developing a firm, favorable and distinct association can be challenging to marketers, however, it is significant in building customer-based brand equity. Marketers create associations by convincing consumers that the brand possesses useful features and benefits that satisfy the needs, wants of customers, and ensure they form positive judgments about the brands. Marketers classify consumer brands into three main categories i.e. attribute, attitudes, and benefits. Attributes refer to those descriptive characteristics that define a product or service. Benefits refer to personal values that consumers attach to products or services and they can be divided into functional, experimental, and symbolic benefits (Vazquez et al. 33). Finally, consumer attitudes are the evaluations of the brand by the consumer that associates the consumer with the buying behavior.
Purchase decision
Consumers face purchase decisions when presented with choices between two alternative courses of action. A consumer is often interested in purchasing value when faced with a purchase decision and the purchase decision depends on the terms of sale or past experiences with the seller. Essentially, consumers make two types of purchase decisions. The first decision involves analyzing alternatives in order to make a choice and these are referred to as assortment decisions. Market related decisions are the second, which involve a choice of the specific brand and ways of obtaining it. After evaluating the available alternatives, consumers make the choice if to purchase the brand or not in order to determine the payment methods, delivery, and other issues. Consumers develop brand equity through purchasing a product because it contains benefits. Brand equity leads to increased sales when consumers make a decision to purchase the brand.
Post Purchase Behavior
Customers are likely to experience satisfaction or dissatisfaction after the decision to purchase a particular brand. It is paramount that marketers analyze the post purchase behavior of consumers because it determines brand loyalty and equity for the purchased brands. A satisfied customer will make a repeat purchase of the product but an unsatisfied one will exhibit a higher likelihood of not purchasing the product on the following occasion (Washburn and Plank 60). The post purchase evaluation entails comparing expectations with the actual performance of the brand. Performance can exceed customer’s expectations, fall below expectations, or have no impact on expectations. This evaluation enables marketers to determine if customers will recommend the products to others or patronize the company.
Value to market performance
Customer-based brand equity adds value to the performance of company’s products in the market. People develop brand loyalty and purchase those products because they trust them having used them for a long time. Strong brands offer benefits to the market by ensuring less vulnerability to competition, enhancing customer loyalty, greater trade, and higher profit margins for the company (Keller 77). Marketers can measure the value of the brand in the market by conducting surveys to determine consumer awareness, knowledge, loyalty, and association of customers with certain brands. Marketers can use both qualitative and quantitative techniques to measure and determine sources of brand equity. Focus groups offer information about customer perceptions motivation. The scales used to measure brand equity enable the company to determine the overall financial performance of the firm.
Conclusion
In conclusion, customer-based brand equity depends on brand loyalty, brand awareness, association, purchase decisions, and post purchase behavior. Thus, it is crucial that marketers build strong brand loyalty in their customers through brand identity, meaning, response, and relationship with the brand. Customers develop loyalty for a brand when they have knowledge about it and can recall the brand or recognize the brand in the market. In the end, consumers develop brand equity because they are able to differentiate brands based on their brand knowledge and response to marketing. Brands with positive customer-based brand equity are likely to result to increasing sales, increased market share, reduced promotion costs for the marketer and increased customer loyalty that result to repeat purchases. Therefore, marketers should take the initiative of building customer-based brand equity in order to enjoy the numerous benefits that come with it.
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