BRAND EQUITY

So what is brand equity you ask? Well, Aaker defines brand equity as the brand assets (or
liabilities) linked to brands name and symbol that add to (or subtract from) a product or service
so basically, to put it simply, brand equity derives from consumers perceptions of a brand,
product or service. Brand equity is reflected in the way consumers act, think and feel with
regards to the brand as well as in price, market share and profitability that the brand commands.
Brand equity is strategic; it is the base for competitive advantage as well as long-term
profitability. Brand equity needs to be measured and monitored constantly.
There are many various brand equity models to learn from, however, in this blog post we will
be looking at Aakers Brand Equity Model. This model consists of four dimensions: Brand
Awareness, Perceived Quality, Brand Associations and Brand Loyalty.
1. Brand Awareness:
Brand awareness involves brand recognition and brand recall. Often not enough attention is
paid to the value of brand awareness. Awareness can lead to familiarity, and it is seen that
people like the familiar. Brand Awareness is the extent to which a brand is known among the
public, which can be measured by the following parameters:
Familiarity and likeability
Anchor to which associations can be attached
Commitment to a brand
Brand to be considered during the purchasing process
EXAMPLE: Coca Cola When it comes to brand awareness the one brand that has completely
dominated the market is Coca-Cola. They have achieved brand awareness on all levels, one
can even argue that it is not the product itself that has made Coke one of the most recognisable
brands on the planet, but in fact its brilliant marketing strategies.
2. Perceived quality:
Perceived quality relates to a consumers opinion on the extent to which a particular product
will be able to meet his / her expectations. Perceived quality has a massive effect on
profitability and influences brand associations.
The extent to which a brand is considered to provide good quality products can be measured
on the basis of the following criteria:
Availability in different sales channels (are your products widely available?)
The number of line/ brand extensions
Level of differentiation / position in relation to competitor brands
Price
The quality offered by the product/ brand is a reason to buy it
EXAMPLE: Woolworths There is no denying that when it comes to Woolworths (SA) there
is undeniably a sense of perceived quality associated with the brand. From the materials used
in all their products to the packaging and quality standards of their food products Woolworths
has it waxed, and consumers are willing to pay extra cash dollar for the quality provided by
their products.
3. Brand associations:
Brand association is something that provides meaning to a brand. Associations are key to any
brand, as brand managers/leaders it is our task to determine what associations should be
developed and created. What associations do we want to adopt? Associations include: User
imagery, product attributes, organisational associations, brand personality as well as symbols.
Associations triggered by a brand can be assessed on the basis of the five following
indicators:
The extent to which a brand name is able to retrieve associations from the
consumers brain
 The extent to which association contribute to brand differentiation in relation to the
competition
The extent to which brand associations play a role in the buying process
The extent to which brand associations create positive attitudes / feelings
The number of brand extensions in the market
EXAMPLE: Harley Davidson Anyone can buy a bike however when someone buys a Harley
they are automatically accepted into a society of friends and brothers, regardless of their
different backgrounds. Harley Davidson is associated with a community longing for safe
rebellion and the open road.
4. Brand loyalty:
The heart of a brands value. The goal should be to strengthen the size and intensity of loyalty
segments. Aaker states, A brand with a small but intensely loyal customer base can have
significant equity.
The extent to which people are loyal to a brand is expressed in the following factors:
Reduced marketing costs (Hanging on to loyal customers is cheaper than charming
potential new customers)
Attract new customers current customers can help boost name awareness and bring
in new customers
Trade leverage loyal customers represent a stable source of revenue for the
distributive trade
Time to respond to competitor threats loyal customers that are not quick to jump to
another brand give a company more time to respond to competitive threats
EXAMPLE: Apple Have you ever met an Apple person? If so, Im sure you can agree that
they are VERY passionate about the brand and what it offers. Apple has brand loyalty that most
brands could only dream of. How you ask? Because Apple has created an emotional connection
with its customers, customers know the passion and dedication that goes into making Apple
products and they feel the emotional connection when owning one. Once someone owns an
Apple product, you will find it increasingly difficult to get him/her to change to another brand-
these consumers become part of a brand tribe.