The Power of Brand Equity: Building Strong and Resonant Brands

Karin

Welcome, everyone, to today’s episode where we unravel the mysteries of brand equity! I’m your host, Karin, and joining me is branding and advertising expert David. We’re going to explore what brand equity is, why it matters, and how you can build it to create a brand that truly resonates with your customers. So, David, what do you think brand equity means to most people?

David

Hi, Karin! I think a lot of people hear ‘brand equity’ and they think it’s just about how much a brand is worth. But there’s so much more to it, isn’t there? It’s about the emotional and cognitive connections people have with a brand, right?

Karin

Exactly, David! Brand equity is more than just a financial measure. It’s about the value a brand holds in the minds of its customers. Kevin Lane Keller, a renowned marketing expert, defines it as the power of a brand that resides in the customers’ thoughts, feelings, and experiences. This equity can lead to increased loyalty, better customer retention, and even higher price premiums. So, why do you think brand equity is so crucial for businesses today?

David

Hmm, I think brand equity is crucial because it’s like a shield against competition. If a customer has a strong emotional connection with a brand, they’re more likely to stick with it even if a competitor offers a similar product. For example, Apple has such a loyal following that even when other companies release new gadgets, many people still choose Apple. It’s almost like a cult following!

Karin

Absolutely, and that’s a perfect example! Apple’s brand equity is built on a combination of high-quality products, innovative design, and a strong community of fans. Now, let’s dive into the first step of building brand equity: brand identity. This is all about making sure customers know who you are. What do you think are the key elements of establishing a strong brand identity?

David

Oh, that’s a great question! I think brand identity is about creating a clear and consistent brand message. For instance, Coca-Cola has been incredibly successful in this area. They’ve always positioned themselves as the quintessential American brand, and their advertising consistently reinforces this message. But it’s not just about the message, right? It’s also about making sure the brand is top-of-mind and easily recallable in various situations.

Karin

Exactly! Brand identity involves both depth and breadth of brand awareness. Depth is about how easily customers can recall your brand, and breadth is about the range of situations where they think of it. For example, if you’re a soup brand, you want to ensure that customers think of you not just for lunch but also for dinner, and maybe even for a quick snack. This means your brand needs to be salient—easily evoked in various contexts. What other examples can you think of where a brand has successfully built its identity?

David

Umm, well, Nike is another great example. They’ve done an amazing job of linking their brand with athletic performance and innovation. When you think of sports or fitness, Nike is one of the first brands that come to mind. And they’ve achieved this through consistent and powerful advertising, sponsorships, and even their product design. It’s like they’ve made it a part of our collective consciousness!

Karin

That’s a very good point! Nike has definitely mastered brand identity. Now, let’s move on to the next step: brand meaning. This is all about the associations customers have with your brand. How do you think a brand can create strong, favorable, and unique associations?

David

Oh, this is where things get really interesting! I think it’s all about delivering on your brand promise and creating a rich, multi-dimensional brand image. For example, Patagonia is known for its commitment to environmental sustainability. This isn’t just a marketing gimmick; it’s a core part of their brand meaning. When customers buy Patagonia, they feel like they’re supporting a company that shares their values. What are some other ways brands can build this kind of meaning?

Karin

Great question! Brands can build meaning through a combination of product performance and imagery. Product performance is about how well your product meets customer needs. For instance, Dyson vacuums are known for their superior suction and innovative design. On the other hand, imagery is about the psychological and social associations customers have with your brand. Think of brands like Harley-Davidson, which evokes a sense of rebellion and freedom. Both of these elements are crucial for building a strong brand. What do you think about brands that fail to establish strong meaning?

David

Well, I think brands that fail to establish strong meaning often struggle to differentiate themselves. For example, a lot of banks and airlines have trouble creating strong brand equity because they all seem to offer the same services. Southwest Airlines is an exception, though. They’ve built a brand meaning around being fun, affordable, and customer-friendly, which sets them apart from the competition. What are some other examples of brands that have failed to establish strong meaning?

Karin

Good point, David. Another example is Nokia. They failed to innovate and stay relevant in the mobile phone category, which led to a decline in their brand meaning. Customers didn’t see them as modern or exciting, and that ultimately hurt their brand equity. Now, let’s talk about brand responses. This is where customers start to think and feel about your brand. What do you think are the key types of brand responses?

David

I think the key types of brand responses are judgments and feelings. Judgments are more cognitive, like perceptions of quality and credibility. For example, Intel is known for its high performance and reliability, which are cognitive responses. Feelings, on the other hand, are more emotional, like warmth, fun, and excitement. Think of brands like Disney, which evoke a sense of magic and joy. How do you think brands can elicit these positive responses?

Karin

Brands can elicit positive responses by consistently delivering on their promises and creating meaningful experiences. For example, Starbucks is known for its warm and inviting atmosphere, which makes customers feel good about their visit. They’ve also built a strong sense of community around their brand, which enhances these positive feelings. Now, let’s move on to brand relationships. This is the final and most crucial step in building brand equity. What do you think are the key aspects of brand relationships?

David

I think brand relationships are all about creating a deep and active loyalty with customers. It’s not just about them buying your product; it’s about them feeling a strong connection to your brand. For example, Harley-Davidson has a loyal community of enthusiasts who actively engage with the brand through events, clubs, and even merchandise. This level of engagement is what sets strong brands apart. What are some other examples of brands with strong relationships?

Karin

Absolutely, David. Apple is another great example of a brand with strong relationships with its customers. Their customers are incredibly loyal and often go out of their way to recommend the brand to others. They even create fan content and attend Apple events. This active engagement is a hallmark of brand resonance, which is the pinnacle of the Customer-Based Brand Equity (CBBE) model. Now, let’s talk about brand salience. This is about making sure your brand is top-of-mind. How do you think brands can achieve this?

David

I think it’s all about consistent and targeted branding and brand communications. For example, McDonald’s has been successful in making their brand salient through catchy jingles, recognizable mascots, and a presence in almost every city. When people think of fast food, McDonald’s is often the first brand that comes to mind. But it’s not just about advertising; it’s also about creating a strong brand presence in various settings. What other strategies do you think can help with brand salience?

Karin

Great point! Another strategy is to leverage customer experiences and word-of-mouth. For example, Tesla has built its brand salience largely through the positive experiences of its customers and the buzz generated by its innovative products. They’ve also used strategic partnerships and events to keep their brand top-of-mind. Now, let’s move on to brand performance. This is about how well your product or service meets customer needs. What do you think are the key performance attributes?

David

I think the key performance attributes are reliability, durability, and serviceability. Customers want a product that they can depend on and that will last. For example, Toyota is known for its reliable and durable cars. They’ve built a strong reputation for quality, which is a crucial part of brand performance. What about more intangible attributes, like style and design?

Karin

Style and design are incredibly important, especially in categories where aesthetics matter. Think of brands like Louis Vuitton or Gucci. Their products are not just functional; they’re also beautiful and evoke a sense of luxury. Even in more practical categories, like kitchen appliances, brands like KitchenAid have built their equity on their stylish and innovative designs. Now, let’s talk about brand imagery. This is about the psychological and social associations customers have with your brand. How do you think brands can create a strong image?

David

I think it’s all about storytelling and creating a brand narrative. For example, Levi’s has built a strong image around being a classic American brand with a rich history. Their marketing often features vintage ads and stories about how their jeans have been worn by generations of Americans. This creates a strong emotional connection with customers. What are some other ways brands can create a strong image?

Karin

Another way is through consistent and engaging brand experiences. For example, Sephora has created a strong image by offering in-store beauty consultations and a wide range of products. They’ve also built a community around their brand through their loyalty program and online forums. This helps customers feel like they’re part of something special. Now, let’s talk about the ultimate goal: brand resonance. What do you think are the key components of brand resonance?

David

I think brand resonance is about creating a deep and active loyalty relationship. It’s when customers not only love your brand but also actively seek ways to engage with it and share their experiences. For example, Nike has a strong sense of community around their brand, with customers participating in Nike events and sharing their fitness journeys. This active engagement is what makes a brand truly resonate. What are some other examples of brands with high resonance?

Karin

Absolutely, David. Amazon is another great example. They’ve built a strong resonance through their customer-centric approach, vast product selection, and innovative services like Prime. Customers feel like Amazon is always there for them, and they actively engage with the brand through reviews, shopping lists, and recommendations. This level of resonance is what every brand should strive for. So, to wrap up, what are the key takeaways from today’s discussion?

David

I think the key takeaways are that brand equity is built through a series of logical steps: establishing brand identity, creating brand meaning, eliciting positive brand responses, and forging strong brand relationships. Each step is crucial and builds on the previous one. And the ultimate goal is to achieve brand resonance, where customers feel a deep and active connection with your brand. It’s a challenging but incredibly rewarding process!

Karin

Exactly! Building brand equity is a journey that requires consistent effort and a deep understanding of your customers. But the rewards are immense, from increased loyalty to higher price premiums. Thanks, David, for an interesting discussion, and thank you, listeners, for joining us today. Until next time, keep building those strong brands and use this information to WOW us with your brand strategy portfolio Part I!