Brand Equity: Definition, Elements, and Benefits

Brand equity is a solution to increase your company's closeness to customers.

In an era of easily accessible information like today, customer relationships with companies are no longer limited to the quality of their products. However, image is also influenced by other factors, such as the treatment of employees, concern for the environment, and the company's contribution to society.

To stay ahead of the competition, companies must start considering initiatives that can improve the company's image. As the company's image improves, customers will be more loyal and revenue will increase.

Brand equity includes how customers view and respond to the entire company ecosystem. This includes the values ​​that are held firmly and the extent to which the company maintains its commitment to non-product aspects.

Understand more about what is meant by brand equity, its elements, and its benefits for companies in the following review.

What is Brand Equity?

Brand equity is the added value of a company compared to competitors which is reflected in customer and market perceptions.

Companies build brand equity by creating positive experiences that attract customers to make their products more preferred than other products.

Brand equity is formed when a company's campaign is in line with customer values ​​and retention efforts after product use.

There are several elements of brand equity that can produce loyal customers if implemented properly by the company.

Elements of Brand Equity

David Aaker, a modern branding expert, formulated the elements of brand equity. Here are the four most important elements:

Brand awareness

Brand awareness is the first step in building brand equity. This is because customers must first know and remember your brand before they can form a positive perception of it.

In addition, brand awareness also involves the ability of customers to remember your brand when they are presented with a stimulus. These stimuli include advertisements or conversations with friends.

Companies must ensure that their marketing strategies create strong and adequate brand recognition.

Brand attributes

Brand attributes are special characteristics that are inherent in a brand and help shape the brand's image in the eyes of consumers. This element plays a very important role in forming brand equity because it creates differentiation among competitors.

Brand attributes include product characteristics, brand values, packaging design, or other elements that make the brand stand out. For example, a clothing brand may be known for its superior quality materials or innovative designs.

Perceived Quality

The perceived quality element reflects customers’ perceptions of the level of quality of a brand and its products.

Customers will not only assess it once, but also consider the consistency of quality after repeated use. Maintaining this quality will continuously increase overall brand equity.

Brand Loyalty

This element describes the extent to which customers are willing and inclined to choose your brand consistently and loyally over a period of time.

This stage can be seen when customers consistently choose your brand in various purchasing situations. Even when they have to pay more or travel further.

By understanding and managing these elements, companies can create strong customer loyalty and increase their brand value in the market.

Benefits of Brand Equity for Companies

Are the series of elements above worth fighting for in order to achieve brand equity? Yes, because brand equity is the key to providing the following benefits for your company:

Developing a larger market share

Through customer trust and loyalty, brand equity will make your market share even larger.

In addition, customers also tend to tell their positive experiences with your brand to their audience. So, the market share can be even wider.

Raise prices

Brand equity creates a higher perception of value in the eyes of customers. Customers already trust the quality and reliability of your products. So, it doesn't matter when they have to spend more.

However, price increases must still be done carefully and in accordance with customer perceptions. Otherwise, price increases will actually get a negative reaction.

Easier to add product lines

Brand equity can give companies significant advantages in adding product lines.

When the audience is familiar with a brand's products, customers will be more encouraged to try other new products. Moreover, regarding the quality assurance that the brand has provided for a long time, launching a new product line will not be too difficult.

Opening up greater opportunities

Ultimately, brand equity will provide greater opportunities for the company.

The company will have better bargaining power when negotiating with business partners including suppliers, distributors, and retailers.

With strong brand equity, the company will be more solid in facing market fluctuations and other economic challenges.

That's the information you need to know about what brand equity is, its elements, and its benefits for the company. Promotion may create attraction, but customer loyalty and brand attachment form a longer relationship.

Brand equity is one of the many brand strategy managements that exist. You can learn more by following the Strategic Brand Management short program from Prasmul Eli.

In the 2-day program, the learning scope includes:

• Product and Brand Management
• Brand Element
• Brand Identity
• Brand Loyalty
• Brand Extensions

There are also two workshop sessions and presentations as practice. Come on, register yourself through the following link to join the class that will be held on October 22-23, 2024.