BRAND EQUITY

Brand equity refers to the marketing effects or outcomes that accrue to a

product with its brand name compared with those that would accrue if the
same product did not have the brand name. And, at the root of these
marketing effects is consumers' knowledge. In other words, consumers'
knowledge about a brand makes manufacturers/advertisers respond
differently or adopt appropriately adept measures for the marketing of the
brand. The study of brand equity is increasingly popular as some marketing
researchers have concluded that brands are one of the most valuable assets
that a company has Brand equity is one of the factors which can increase the
financial value of a brand to the brand owner, although not the only one.

Measurement

There are many ways to measure a brand. Some measurements

approaches are at the firm level, some at the product level, and still
others are at the consumer level.

Firm Level: Firm level approaches measure the brand as a financial asset. In
short, a calculation is made regarding how much the brand is worth as an
intangible asset. For example, if you were to take the value of the firm, as
derived by its market capitalization - and then subtract tangible assets and
"measurable" intangible assets- the residual would be the brand equity One
high profile firm level approach is by the consulting firm Interbrand. To do
its calculation, Interbrand estimates brand value on the basis of projected
profits discounted to a present value. The discount rate is a subjective rate
determined by Interbrand and Wall Street equity specialists and reflects the
risk profile, market leadership, stability and global reach of the brand.

Product Level: The classic product level brand measurement example is to

compare the price of a no-name or private label product to an "equivalent"
branded product. The difference in price, assuming all things equal, is due to
the brand. More recently a revenue premium approach has been advocated.

Consumer Level: This approach seeks to map the mind of the consumer to
find out what associations with the brand that the consumer has. This
approach seeks to measure the awareness (recall and recognition) and brand
image (the overall associations that the brand has). Free association tests and
projective techniques are commonly used to uncover the tangible and
intangible attributes, attitudes, and intentions about a brand. Brands with
high levels of awareness and strong, favorable and unique associations are
high equity brands.All of these calculations are, at best, approximations. A
more complete understanding of the brand can occur if multiple measures
are used.

Positive brand equity vs. negative brand equity

A brand equity is the positive effect of the brand on the difference

between the prices and that the consumer accepts to pay when the
brand known compared to the value of the benefit received.

There are two schools of thought regarding the existence of negative brand
equity. One perspective states brand equity cannot be negative,
hypothesizing only positive brand equity is created by marketing activities
such as advertising, PR, and promotion. A second perspective is that
negative equity can exist, due to catastrophic events to the brand, such as a
wide product recall or continued negative press attention (Blackwater or
Haliburton, for example).

Colloquially, the term "negative brand equity" may be used to describe a

product or service where an brand has a negligible effect on a product level
when compared to a no-name or private label product. The brand-related
negative intangible assets are called “brand liability”, compared with “brand
equity” .

Family branding vs. individual branding strategies

The greater a company's brand equity, the greater the probability that the
company will use a family branding strategy rather than an individual
branding strategy. This is because family branding allows them to leverage
the equity accumulated in the core brand. Aspects of brand equity includes:
brand loyalty, awareness, association, and perception of quality .
BRAND POSITIONING

In marketing, positioning has come to mean the process by which

marketers try to create an image or identity in the minds of their target
market for its product, brand, or organization.

Re-positioning involves changing the identity of a product, relative to the

identity of competing products, in the collective minds of the target market.

De-positioning involves attempting to change the identity of competing

products, relative to the identity of your own product, in the collective minds
of the target market.

The original work on Positioning was consumer marketing oriented, and was
not as much focused on the question relative to competitive products as
much as it was focused on cutting through the ambient "noise" and
establishing a moment of real contact with the intended recipient. In the
classic example of Avis claiming "No.2, We Try Harder", the point was to
say something so shocking (it was by the standards of the day) that it cleared
space in your brain and made you forget all about who was #1, and not to
make some philosophical point about being "hungry" for business.

The growth of high-tech marketing may have had much to do with the shift
in definition towards competitive positioning.

Definitions

Although there are different definitions of Positioning, probably the most

common is: identifying a market niche for a brand, product or service
utilizing traditional marketing placement strategies (i.e. price, promotion,
distribution, packaging, and competition).

What most will agree on is that Positioning is something (perception) that

happens in the minds of the target market. It is the aggregate perception the
market has of a particular company, product or service in relation to their
perceptions of the competitors in the same category. It will happen whether
or not a company's management is proactive, reactive or passive about the
on-going process of evolving a position. But a company can positively
influence the perceptions through enlightened strategic actions.
Product positioning process

Generally, the product positioning process involves:

1. Defining the market in which the product or brand will compete (who
the relevant buyers are)
2. Identifying the attributes (also called dimensions) that define the
product 'space'
3. Collecting information from a sample of customers about their
perceptions of each product on the relevant attributes
4. Determine each product's share of mind
5. Determine each product's current location in the product space
6. Determine the target market's preferred combination of attributes
(referred to as an ideal vector)
7. Examine the fit between:
o The position of your product
o The position of the ideal vector
8. Position.

The process is similar for positioning your company's services. Services,

however, don't have the physical attributes of products - that is, we can't feel
them or touch them or show nice product pictures. So you need to ask first
your customers and then yourself, what value do clients get from my
services? How are they better off from doing business with me? Also ask: is
there a characteristic that makes my services different?

Write out the value customers derive and the attributes your services offer to
create the first draft of your positioning. Test it on people who don't really
know what you do or what you sell, watch their facial expressions and listen
for their response. When they want to know more because you've piqued
their interest and started a conversation, you'll know you're on the right
track.

Positioning concepts

More generally, there are three types of positioning concepts:

1. Functional positions
o Solve problems
o Provide benefits to customers
 o Get favorable perception by investors (stock profile) and
lenders
2. Symbolic positions
o Self-image enhancement
o Ego identification
o Belongingness and social meaningfulness
o Affective fulfillment
3. Experiential positions
o Provide sensory stimulation
o Provide cognitive stimulation

Measuring the positioning

Positioning is facilitated by a graphical technique called perceptual mapping,

various survey techniques, and statistical techniques like multi dimensional
scaling, factor analysis, conjoint analysis, and logit analysis.

Repositioning a company

In volatile markets, it can be necessary - even urgent - to reposition an entire

company, rather than just a product line or brand. Take, for example, when
Goldman Sachs and Morgan Stanley suddenly shifted from investment to
commercial banks. The expectations of investors, employees, clients and
regulators all need to shift, and each company will need to influence how
these perceptions change. Doing so involves repositioning the entire firm.

This is especially true of small and medium-sized firms, many of which

often lack strong brands for individual product lines. In a prolonged
recession, business approaches that were effective during healthy economies
often become ineffective and it becomes necessary to change a firm's
positioning. Upscale restaurants, for example, which previously flourished
on expense account dinners and corporate events, may for the first time need
to stress value as a sale tool.

Repositioning a company involves more than a marketing challenge. It

involves making hard decisions about how a market is shifting and how a
firm's competitors will react. Often these decisions must be made without
the benefit of sufficient information, simply because the definition of
"volatility" is that change becomes difficult or impossible to predict.