Brand Equity

When branding a product, it is very important to have a lot of value in the brand strength in the market. Having a quality brand name is key in maintaining a successful business operation. The more well-managed a brand is, the more of an asset it is to the organization, and this is called brand equity. There are 4 main elements that contribute to brand equity: brand name awareness, brand loyalty, perceived brand quality, and brand associations.

Brand name awareness is very important for a company because the more familiar a customer is with a product, the more likely they are to purchase that product of a competitors'. For example, a customer is more likely to buy a Coke or Pepsi product because they are very familiar with both companies and have most likely grown up watching a plethora of celebrities endorse both products. I believe this also ties in with brand loyalty, since the more familiar a customer is with a product and they more likely they are to buy it and enjoy it, the more they will become loyal to the company. If a customer enjoys a product a lot and feels that they are getting a good deal on the product, they are probably likely to become brand loyal. Many people are brand loyal to Coke over Pepsi, or vice versa, based on taste.

Coke and Pepsi can also be applied to perceived brand quality because they have been around for a very long time and continue to each own a huge percentage of the soft drink market share. The high quality soda that they deliver keeps customers coming back to buy more and more of their drinks. The reason many customers continue to buy a product could be because of a brand association. Many people grew up drinking Coke or Pepsi and every time they sip one, it reminds them of their childhood or another fond memory that makes them happy. This could be why brand association can be so important. Do you think any factor is more important than another? Why or why not?