Page 23 - Marketing the Basics 2nd

BRAND EqUITY
As we’ve seen above, companies gain great returns in creating brands. With a brand you’re not merely selling a product, but a set of intangible promises as well. This is what we call brand equity. Brand equity is the added value that a branded product has over a competing generic and unbranded product. Interbrand, in its yearly valuation of global brands, values Coca-Cola’s brand equity at an estimated $66 billion dollars, ranking it in the number one position consecutively since 2000.
One of the reasons behind Coca-Cola’s success has been that consumers see Coca-Cola as far more than a flavoured drink in a red aluminium can. They see the celebration of American culture, the creator of the image of Santa Claus, the loving polar bears and the comforting notion that despite all the upheaval and change that have occurred over the last 120 years, Coca-Cola has never changed. When they tinkered with the formula, consumers reacted negatively. New Coke almost became the last Coke. When Coca- Cola realized that their product was more than just a beverage, it was an experience as well, they reverted to their original formula and reallocated their marketing budgets towards reinforcing the image side of the brand.
How do Coca-Cola and other companies build brand equity? What are the sources of brand equity? To create brand equity, consumers must first know that the brand exists. Brand awareness can be created in consumers’ minds in both depth – related to the likelihood that the brand can be recognized or recalled – and strength – related to the variety of purchase and consumption situations in which the brand comes to mind. Therefore, brand knowledge, and thus brand equity, has two sources upon which it must build itself: brand awareness and brand image.
Brand awareness is the strength of presence of the brand in consumers’ minds as they can identify the brand under different conditions. It can come as brand recognition, which is the ability of consumers to confirm prior exposure to the brand and brand recall, which is the ability of consumers to retrieve the brand when given a cue (i.e. product category). The importance of having consumers aware of the product is in their resulting purchasing actions. Brands with high awareness are ‘top-of-mind’ brands that come first to
What is ManageMent? 15