Thursday, July 25, 2024
Marketing

5 Key Sources Of Brand Equity [Explained With Clear Example]

Brand equity can be defined as the value that a brand brings to a particular product or service. It is the difference between the actual price of a product or service and the perceived value of that product or service based on the brand name alone. 

In other words, brand equity is the value that a brand name brings to a product or service.

There are several sources of brand equity, and in this article, I will give you details on some of the most important ones.

Sources Of Brand Equity

Brand Awareness

The level of consumers’ familiarity with a particular brand is referred to as its “brand awareness.” The more aware consumers are of a brand, the more likely they are to purchase products or services associated with that brand.

Advertising is one of the most efficient means of boosting your brand. A well-executed advertising campaign can introduce a brand to a wide audience, making them more likely to remember the brand when they need a product or service that the brand offers.

Brand Loyalty

Brand loyalty is the degree to which consumers prefer one brand over others. Loyal customers are more likely to purchase products or services associated with that brand, even if they are more expensive or less convenient to obtain.

There are several ways to build brand loyalty, such as offering exceptional customer service, providing high-quality products or services, or offering exclusive deals or promotions to loyal customers.

Brand Associations

Brand associations are the mental connections that consumers make between a brand and certain attributes or benefits. 

For example, a brand that is associated with luxury may be perceived as high-end and exclusive, while a brand associated with environmental sustainability may be perceived as eco-friendly and socially responsible.

Creating positive brand associations can be accomplished through various means like sponsorships, partnerships, and cause-related marketing campaigns.

Brand Personality

A brand’s personality can be thought of as the collection of human traits that are associated with the brand. For example, a brand that is fun, friendly and approachable is said to have a “friendly” personality.

Creating a distinct brand personality can help a brand stand out and make it more memorable to consumers. This can be accomplished by consistently communicating the brand’s personality through advertising, packaging, and customer interactions.

Other Factors

There are other factors that can contribute to brand equity, such as the design of the brand’s logo and packaging, the quality of the brand’s website and social media presence, and the reputation of the company behind the brand.

For example, a company with a strong reputation for corporate responsibility may see an increase in brand equity as a result of positive associations with social and environmental causes.

Understanding Brand Equity With an Example!

Let’s take a look at the car brand, Tesla.

Brand Awareness

Tesla is a relatively new car brand, but it has quickly gained widespread recognition through its innovative electric cars and its charismatic CEO, Elon Musk. 

The company has also invested heavily in advertising campaigns, such as its Superbowl commercials, which have helped increase brand awareness among consumers.

Brand Loyalty

Tesla owners are known for being extremely loyal to the brand. This is partly due to the fact that Tesla’s cars are unique and innovative, and partly due to the company’s strong commitment to sustainable transportation. 

Tesla also rewards its loyal customers with perks such as priority access to new models and exclusive events.

Brand Associations

Tesla is associated with innovation, technology, and sustainable transportation. These positive associations have helped the brand to attract environmentally-conscious consumers who are willing to pay a premium for a car that aligns with their values.

Brand Personality

Tesla has a strong, confident and innovative personality, which is reflected in its advertising, product design and its CEO Elon Musk’s public persona. 

This personality has helped the brand to stand out in the crowded automotive market and appeal to a wide range of consumers, from tech-savvy early adopters to environmentally-conscious consumers.

Other Factors

Tesla’s reputation for corporate responsibility also contributes to its brand equity. The company is known for its commitment to sustainable manufacturing and its efforts to reduce its environmental impact. 

This has helped to build positive associations with environmental causes and attract consumers who prioritize sustainability in their purchasing decisions.

So one can say that Tesla’s brand equity is built on a combination of factors, including brand awareness, loyalty, associations, personality, and reputation. 

These elements have helped the brand to establish a unique and differentiated position in the marketplace and command a premium price for its products.

Final Say on Brand Equity!

Building brand equity is a complex and ongoing process that requires a combination of strategies and tactics. If you need any further clarifications on sources of brand equity then please do let me know in the comments!

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