According to The American Marketing Association, a brand is defined as anything used to identify a product that includes critical factors such as brand name, symbol, image, logo, and design. When creating a reputation, you are also creating value which is how often people buy your products over other alternatives. Customers develop relationships with companies, and when they feel they are unique and align with their values, it can lead to a new competitive advantage and loyalty.
Customers are not buying from brands for their function's characteristics but also for the image, which is part of the value. For instance, purchasing Coca-Cola over Pepsi goes beyond taste and price; factors such as elements, associations, recognition, and trust come into play when deciding.
Companies like "Kantar" publish ladder boards of the most valuable brands every year. This ladder board is constantly changing, and firms are trying to make a yearly list. According to Kantar, the most valuable brands currently include Amazon, Apple, Microsoft, and Google. We can analyze what these companies are doing well and what we can take from their current strategies. All four companies have established awareness, perceived quality, loyalty, and positive associations.
On the other hand, brand value is all assets associated with the company, and they can either increase or decrease the value. Firms are spending millions of dollars to create and maintain these factors mentioned below. The main four assets of brand value, according to Aaker, a marketing expert, are:
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Brand awareness
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Brand perceived quality
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Brand loyalty
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Brand associations
Brand awareness measures if customers have already seen our brand in the past. As the first step in the marketing funnel, it is fundamental to eventually acquire new customers and create the ability of recognition and recollection of your firm. When increasing recognition can be interpreted as a competitive advantage since it can significantly influence customers' decisions at the vital moment of purchase, a higher awareness can also attract new customers and traffic to your firm's website.
Brand perceived quality is one of the most important associations. When a customer is deciding between multiple brands, comparing price-quality ratio and their perception of the overall experience relative to other alternatives in the market. For the price of a product, the customer is looking for adequate quality. Companies associated with higher attributes can charge more for their products and companies with loyal clients. Customers' perceived quality can be different from the actual quality, as customers' negative experiences can influence it.
Customers have plenty of options nowadays, and some markets are saturated with choices, which are no longer restricted to purchasing only from one store, which is where loyalty comes into play. Commitment can be achieved by providing a top-tier quality experience for your customers, as they will see you as the best option. It has been proven that loyal and satisfied clients are more likely to refer your brand to others, increasing sales and a new customer base. It also increases the chances for loyal shoppers to try other products within your company, making it much easier to introduce a new product line.
Another factor influencing value is brand associations. Associations are factors that come to mind when thinking of a specific brand. The company's image must reflect positive associations to establish an excellent reputation and align with its identity, vision, message, and values. For instance, when we see the swoosh logo or the words “Just Do it”, we often think of Nike first. If we need new shoes for running, chances are customers may include Nike as a possible choice. This is a positive brand association every brand wants to achieve, but hard to develop overnight. This strategy can set you apart from other competitors and portray why you are memorable as a company. The best way to achieve a positive association includes tone of voice, graphic design, logo, colors, composition, elements, images, etc. The crucial part of positive associations is the brand identity built by the company's positioning. A company with a well-set positioning will strengthen customers' perceptions of your products.
Branding in today's world plays a more prominent role in customer decisions between products or services; therefore, brand marketing strategy plays a crucial role in whether the customers will accept the products or services. Brand and its value are one of the most significant assets a company can have, and it can compete by creating loyal customers. Companies want to build recognition, make people come back for their products, and portray an enthusiastic side to which people can relate.
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