In today’s environment, building strong brands and establishing brand equity is becoming more and more challenging. A strong brand acts as a promise, leading faithful customers to pay a premium over competitive products. The most important assets of any business are intangible: its company name, brand, symbols, perceived quality, name awareness, patents, trademarks etc. these assets comprise brand equity, a primary source of competitive advantage.
MEASURING BRAND EQUITY
Most evaluations of brand equity involve utility estimations. Value (utility) of a product features and price level and also measuring the overall utility of a product, including brand name. The difference between total utility and utility of product features is the value of the brand. Monetary value, intangibles and perceived quality are also used in the brand equity measurement.
Brand Equity can provide strategic advantages by: Use leverage when introducing new products.
Brand can be linked to a quality image that buyers want to be associated with
Can lead to greater loyalty from customers. Offer a strong defence against new products and new competitors.
Can lead to higher product trails and repeat purchasing, due to buyer awareness of the brand.
Example: BPL brand has been valued at Rs. 600 Crores
HLL brand has been valued at Rs. 900 Crores