By Wisdom JONNY-NUEKPE
Building brand equity can help to increase awareness and boost recognition to grow sales and profits long-term. Focusing on customers and how they perceive your brand can allow you to develop lifetime recognition.
Brand’s equity enables brand owners to determine whether the brand is at the top of consumers’ minds when shopping. For instance in Ghana, when someone needs to clean their teeth, they grab a Pepsodent, a brand whose name has become synonymous with toothpastes.
Similarly, when someone needs to wash their cloth, they gravitate toward Omo. Even if it’s a completely different washing powder brand, many call these items by the brand name that holds the most equity in the market.
But what exactly is brand equity, and why should brands strive for it? Building this type of equity gives the brand name sway among consumers and means the brand is identifiable, recognizable, and credible.
By creating good experiences and encouraging consumers to continue using a brand, a brand owner can start to build equity that attracts new clients, retains old customers, and boosts sales.
What is brand equity?
Understanding the brand equity meaning can be confusing because it’s not defined by a single metric. Brand equity is the added value of brand recognition—the perceived quality and superiority of a brand from awareness and reputation.
When we discuss building brand equity, we’re talking about positive brand equity. In our example, positive brand equity results from brand awareness and reputation for being the best tissue brand in the industry with the most market share.
For instance, Pepsodent attained positive brand equity among consumers. Often, brands like these come at a higher price point, but customers are willing to pay a premium for them because they have a positive brand association.
There’s also something called negative brand equity. If you have negative brand equity, you’ll get the opposite result. Therefore, if positive brand equity increases profits and demonstrates your good reputation, negative brand equity indicates a poor reputation and decreases profits.
So what is brand equity in marketing? It’s the same concept. Marketing is more than just promoting your products and services; it’s how you elevate your brand by improving brand awareness, building a reputation, and attaining brand equity.
Every company wants customers to recognize it, but brand equity means clients can identify your brand and your products are perceived as high quality or better than the competition.
Building positive brand equity is crucial for businesses because it allows to offer your products at higher price. However, one cannot build brand equity overnight. Businesses should strive for positive brand equity, but it is crucial to understand the components that go into it. Building a recognizable, quality brand that consumers trust takes time and hard work.
The four essential components of brand equity:
- Brand awareness: No business can have a strong brand equity without brand awareness. If you want to become a household name, customers must know about the brand and identify it while shopping. Branding should be cohesive, with similar messaging and visual elements recognizable across channels.
- Brand attributes: Brand association is how your customers perceive your brand. What words come to mind when customers think of your business? Your brand attributes are characteristics customers might use to describe your products and services, including personality traits; they’re part of your overall brand identity.
For instance, a clothing brand might be inclusive because it offers a wide range of sizes, while a linen brand might be sustainable because its fabrics are made from bamboo or organic cotton. Whatever the case, every business has attributes, and you should know what customers see or think when looking at your brand.
- Perceived quality: Any brand can say it sells quality products, but consumers know not to believe everything they read or hear. Your perceived quality is what customers think about your offerings. You might have a quality product, but you can’t build positive brand equity if your customer doesn’t think it’s high quality or of value. Instead, you want your customers to respond to your brand positively; you have to be the best.
- Brand loyalty: Building loyalty takes time because it’s the sum of past experiences with a brand. The more positive experiences your customers have, the more loyal they’ll feel to you. Building brand loyalty can increase profit margins because it’s much more cost-effective to maintain customers than advertise to new ones.
Conclusion
In Ghana, Brand equity is similarly perceived as the value and positive associations that a brand holds on the market, determined by factors like brand awareness, customer loyalty, perceived quality, and positive brand associations, essentially signifying how much added value a brand has in the eyes of Ghanaian consumers compared to its competitors.
With companies like GCB Bank recently being recognized as having the highest brand equity within the Ghanaian banking sector, this recognition goes a long way to emphasise the Bank as the most visible banking brand on the market including other benefits that translate into profit for the GCB brand.
