What is Brand Equity? Brand equity is nothing but the total worth of your brand in relation to other brands (in the same category as customer loyalty). By this definition, the total worth of the brand names is the discounted value of all future earnings related to brand names, less any existing liabilities. Essentially, the owner of an already well-known brand name will earn more income from brand equity just because consumers perceive the goods of that brand as better than those of other brands. Let’s take a closer look at what exactly is brand equity and what it means to a business.
Definition of Brand Equity
- Brand Equity is rooted in the fundamental values of fairness, integrity, and quality. It is not the product or service itself that makes a brand a top choice but rather the perception of that product or service by consumers. It is the total worth of an identified by brand, including both the financial and non-financial value attributed to the brand.
Brand equity refers to the extent of perceived value. So, if the consumer witnesses a great product, she will be more inclined to buy the product or use it more often, provided that she has awareness of the brand it is associated with. Similarly, if she is aware of the existence of another brand which offers similar goods, then she is likely to buy from the first brand because it offers greater value. This value-attitude or awareness-effect is referred to as brand awareness. If one has an awareness of the existence of other brands, then it is very easy for her to buy from one brand over another, provided that she is aware of the existence of other brands which offer similar goods.
Tylenol Home Depot is a brand that is well known to most consumers in the United States. A consumer may come across many Home Depots in her area, on the Internet, and through other sources, such as catalogues and promotional material. If Tylenol Home Depot is a brand which she has come across in the past, or even if she has bought other branded goods advertised on TV, then she is likely to form a familiarity and a perception of that brand over other brands which are not as well known. Hence, if a consumer searches on the Internet for Home Depot products, she is likely to find the brand of her choice at the top of the list which will be given as the result of an online search engine.
Another factor which can affect a consumer’s decision on which brand to choose is his or her level of social media engagement. A consumer may be highly social on Twitter, Facebook, LinkedIn, YouTube or any other social media platform. These consumers are considered as high profile, since they have millions of loyal users, and can create a significant amount of impact through their words and actions. This social media platform has been known to give a lot of weight on the social media equity of brands, especially on the brand awareness and perceived value created through those brands. Brands can earn a significant amount of social media traffic, if they are able to build a solid social media presence and create a solid social media buzz about their brands. Tylenol Home Depot is a very successful brand on all of these social media platforms, which can be attributed to its high visibility and user-friendliness.
A brand’s financial health can also be reflected in its brand equity. A company’s market share can be measured by looking into its competitors’ overall profitability. If a company has a higher market share, it is expected to have a better profit margin than its competitors. Therefore, a company’s market share is a key determinant of its profitability and it affects the consumer’s overall decisions on which brand to choose.
Consumers’ preferences can also be used to assess a company’s brand equity and its profitability. An example of this is found when consumers search for a particular brand on the Internet. The search results may be based on a brand equity analysis. If the results lists more competitors that offer the same product, consumers may consider this as a negative signal that the competitors are offering lower profit margins or better quality. On the other hand, if the brands has a positive brand equity ranking, it may mean that consumers are more likely to purchase the brands because they believe that the product is worth the premium price. Positive brand equity implies that consumers value the product, which boosts profit margins.
Brand equity is also influenced by target audience. A successful marketing campaign should not only be designed to meet the needs of the target audience. A good marketing strategy should also take into account the opportunity the brand gives to the target audience. For instance, an edgy, cutting-edge style for men is more likely to appeal to women than a stylish and laid back style for men. However, research reveals that if a product has strong brand awareness, it is more likely to be purchased by men with a high income than by women who earn less.
Tylenol can also affect the brand equity of the product or service. When consumers purchase products containing Tylenol, they are more likely to buy health products that are derived from natural plants, which contain low amounts of contaminants. These chemicals can cause adverse effects to the skin. Brand equity is also affected by the quality and safety measures used to manufacture the product.