What is a brand? It is a way of creating an identity for a product, which is like identifying a specific person within a large crowd. A quick example that comes to mind is Amitabh Bachchan whose name evokes a certain identity. When you think of Amitabh Bachchan you automatically identify him through certain characteristics and qualities which make him distinguishable from the other stars. A better example is the SUN. There are millions of stars but when we talk of the SUN, we immediately know which star we are referring to. This is the identity we are talking about. Similarly, when we want to sell or buy a product, we do not think in terms of the product in general – we are required to identify the particular brand within the entire product range which we like. For example when we go to buy a packet of tea, we do not ask for any packet of tea, we ask for a specific, i.e., Lipton’s Green Label or Brooke Bond’s Red Label.

             Is it as simple as that? Of course not. It has taken a lot of time and effort to become the ‘Big B’ as we know him today. That is how a brand is built.

            A brand is essentially the sum total of the particular satisfaction that it delivers to the customer who buys that specific brand. This sum total relates in its integrality to its name, ingredients, price, packaging, distribution, reputation and ultimately to its performance.

             We, therefore, relate to brands. As consumers, we can remember some brands with which we are familiar and, therefore, we expect certain standards of quality from these brands.

 

Brand Equity

 

              Brand Equity comprehends a set of assets linked to a brand’s name and symbol that adds to the value provided by a product or service to a company’s customers. There is always the underlying expectation that the brand will deliver the satisfaction it has promised. A consumer expects a certain standard of quality and the manufacturer has to make sure that the product lives up to that expectation, otherwise the consumer will stop buying the brand. Simply speaking, brand identities primarily exist in the minds of its consumers. A brand is his or her evaluation of the performance of that brand. And if this evaluation is positive the customer is willing to pay more for one particular brand over another similar product. This is the strength of Brand Equity.

             One may well ask why there is such fascination with brands, and what are they worth? The reasons are many. Firstly, it is because brands create Trust, and trust is the basic precondition to Loyalty. Ultimately it is loyalty that ensures sustainable income to the companies that own these brands. It is this relationship, born out of loyalty, that ensures continuous sales, and therefore profit to the company. Secondly, it is because brands can be shown to be valuable to the shareholders.

             So why is Brand Equity important? It is important because a strong Brand Equity enables the brand to command a premium. The reason why the customers are prepared to pay a premium is because of the perceived reliability, trustworthiness, as well as the positive image of superior quality that the brand commands. As emphasized, the major assets of Brand Equity can be categorized as:

 

1. Brand Awareness: This refers to the strength of a brand’s presence in the consumer’s mind. A Brand’s awareness is measured according to the recognition and recall of the brand.

2. Perceived Quality: Perceived quality lies at the heart of what customers are buying; and in that sense, it is the ultimate measure of the impact of a brand.

3. Brand Loyalty: A brand’s value to the company is largely created by the customer loyalty it commands. Since a company considers loyalty as a major asset, it encourages and justifies loyalty building programmes which, in turn, help to create and enhance Brand Equity. In a way, the loyal customer gets emotionally attached to the brand.

 

              Brands are built block-by-block and the best analogy one can give is how a building is constructed. The building of a brand is a three-part process. The first part relates to the idea. Like an Architect, the Marketing Team must not only be able to visualize whether there is a consumer need for a particular product but also in what form. It is only when the team has been able to pinpoint their particular need, then they can proceed further in terms of satisfying that need.

              This leads to the second part. How is the brand going to be positioned? How will it look? What should its price be and so on. These are the inputs through which the brand is built.

              The third part relates to the process. In other words, all the ingredients we saw in the second part – how are we going to use these ingredients to make the brand? This process includes research, the logic behind the introduction of the brand, creativity in terms of how to project the brand to the consumer and of course, make sure there is adequate quality control to ensure that the product delivers what it promises.

 

           This process is a continuous one. For any further stages of development, research has to be done to make sure that the brand is being developed along the right lines. The concept that a brand is built brick-by-brick, doesn’t mean that it only takes time, the most important thing is that it takes money and practice. A fair amount of time and money is necessary to build a brand and very rarely does a brand become profitable before the first three introductory years are over. Naturally the brand loses money in the first two years, it may make some money in the third; but cumulatively it will still lose money in the third year. Most businessmen are not willing to absorb this loss or wait patiently for the fourth year. It is for this reason that, today, most of the successful brands in the market are owned by multinationals baring of course a few like Nirma, Titan, etc

            In other words, a no-profit, no-loss deal for company was indicated for the first year. Forecast did indicate that in second year, there would be a small profit; but the third year would definitely show substantial increase, both in business and profit.

            Brand Equity is critically important to a company’s success, yet because of its reservoir-like nature, it is often taken for granted, overly drawn upon, and not adequately replenished, especially in times of crisis or to meet short-term needs.

 

 

 

 

girish

Article Source:http://www.articlesbase.com/branding-articles/understanding-the-language-of-branding-1027183.html