Using the term brand equity, marketers describe the "value" of a brand. Brand equity does not refer to the financial value of a brand. It is determined by consumer perception and is driven by a positive (or negative) customer experience.
Creating brand value
As a business, you must create and nurture brand equity in consumers. That is, build a strong connection with consumers by creating strong, positive and unique thoughts, feelings, experiences, memories and beliefs about your brand in the hearts and minds of consumers. These associations are also called consumer brand knowledge. These associations and knowledge are formed and reinforced by your company's marketing activities, as well as by consumers' experiences with your brand over time. Over time, this results in an automatic activation of brand knowledge when consumers encounter your brand. Every time the brand comes to mind, those positive associations are automatically activated, prompting consumers to buy/consume the product. With a powerful brand value, you can really start to play a role in your customer's life.
Coca Cola sells more than the taste of soda. It sells an experience
Coca-cola's brand value
An example of why creating positive brand associations is important is Coca-cola. Coca-Cola is so valuable because of the ideas, perceptions and expectations about the brand that consumers around the world carry in their minds. So much so that if the company lost all of its manufacturing assets in a disaster, it would survive. But if all consumers had a sudden amnesia and forgot everything about Coca-Cola, the company would go out of business.
Value-added benefits
There are many benefits associated with positive brand equity: for example, consumers are willing to pay more money for similar products, when brands expand their product lines, new products are perceived as positive, and ultimately, brand equity has a direct impact on stock price
Even without a name or description of the brand, brands can be recognized by certain brand elements
Why creating positive brand associations is important
- Brand exposure
Consumers can recognize your brand by your logo, slogan, color, among other things, but also by things like your packaging, jingle, endorser (for example, Georgle Clooney at Espresso), etc. These things are called brand elements. Brand elements are the tools appropriate for brands to identify and differentiate the brand. In a crowded market with sometimes too many companies on one side and too many consumers on the other, it is a struggle to capture the consumer's attention. Brand elements are identifiers of the brand and their presence in can activate the mental associations a consumer has with the brand. Therefore, brand elements must stand out and stand out. In other words, they must be sticky when a consumer is exposed to your brand.
- Activation of unique positive & strong feelings and thoughts
As mentioned earlier, consumer experiences with your brand are very important. Indeed, exposure to your brand elements, in case of a strong brand value, results in an automatic activation of brand knowledge. Every time your brand catches the consumer's eye, positive associations are automatically activated, prompting consumers to choose your brand (again).
- From system 2 to system 1
In a nutshell, System 1 and System 2 encompass two completely different thought processes that a person goes through when making decisions. This is a theory also known as dual-processing model by Daniel Kahneman and is an important way to shape your marketing. System 1 is fast, automatic, emotional and subconscious. System 2 is slower and more deliberate. You think about different considerations, different concepts and weigh all the options.
When you have low brand equity, and therefore consumers do not recognize your brand elements, they will act from system 2. They will think longer, act slower and weigh multiple options, including your competitors. With a strong brand value, you create more recognition of your brand among consumers so they will act from system 1 and thus automatically choose you, the familiar one.
Systems 1 and 2 can also be seen as Homer Simpson and Spock from Start Trek
Getting started with your brand value
Building brand equity doesn't start with creating a logo. That's why at Fitbrand we always start with a strategic session. In this session, we sit down with a creative team with different areas of expertise with the client. We always start with the heart of your brand. This includes your vision, mission, purpose and core values. Furthermore, we will brainstorm who your brand is and wants to be in the future. Then all brand elements are based on the outcomes of this strategic session, which thus actually serves as the foundation for a strong brand value.
Want help strengthening your brand equity? We are of course open for a (free) appointment.
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