Marketing Essay 3 Brand Equity Coca cola PDF

Preview

Summary

Download Marketing Essay 3 Brand Equity Coca cola PDF

Description

Marketing Essay 3: Name the three components which together lead to brand equity for a firm and provide a brief description of each of the components. Select any brand of your choice, which you believe enjoys high brand equity, referring to each of the three components and provide a brief justification for your choice.

Introduction: Ac c o r d i n gt oAa k e ra n dMc Lo u g h l i n, b r a n de qu i t yi s“ The added value endowed on products and services which may be reflected in the way consumers, think, feel and act with respect to the brand, as well as in the prices, market share and profitability the brand commands”The three componenets which together lead to brand equity are; brand awareness, brand assosiation and brand loyalty. Brand Awareness: 1. Awareness of the brand name among target customers is the first step in the equity building process. Awareness essentially means that customers know about the existence of the brand and can also recall what category the brand is in. 2. The lowest level of awareness is when the customer has to be reminded about the existence of the brand name, and that it is being a part of a particular category. In aided recall, the customer can recognize the company’s brand from among a list of brands in the category. 3. In unaided recall, the customer themself mentions the company’s brand. The highest level of awareness is when the first brand that the customer can recall upon the mention of the product category is the company’s brand. This is called top-of-mind recall. 4. Awareness of the name acts as an anchor to which everything else about the brand is linked, much like the name of a person acting as an anchor for tying all associations about him/her. 5. Building awareness involves making the brand visible to the relevant target audience by various promotional methods such as publicity, sponsorships, events, advertising, instigating word-of-mouth promotion, etc.

Br a ndAs s o s i a t i o n:

1. Anything that is connected to the customer’s memory about the brand is an association. Customers form associations on the basis of quality perceptions, their interactions with employees and the organization, advertisements of the brand, price points at which the brand is sold, product categories that the brand is in, product displays in retail stores, publicity in various media, offerings of competitors, celebrity associations and from what others tell them about the brand. And this is not an exhaustive list. 2. It is absolutely crucial that the company plan each interaction with every customer and relevant others (media, shareholders, employees, government) so as to eliminate even the slightest chances of any negative associations that can emanate from any of these sources. 3. Associations contribute to brand equity, as strong, positive associations

induce brand purchases, besides generating good word-of-mouth publicity. Such associations can also help the company in leveraging the brand, create strong barriers to entry for competitors, give trade leverage to the company and enable the company to achieve differential advantage. Br a ndLo y a l t y : 1. A customer is brand loyal when he purchases one brand from among a set of alternatives consistently over a period of time. In the traditional sense, brand loyalty was always considered to be related to repetitive purchase behaviour. 2. Brand loyalty is usually rated as the most important indicator of brand equity because loyalty develops post purchase and indicates a consistent patronage by a customer over a long period of time whereas all other elements of brand equity may or may not translate into purchases. 3. Brand loyal customers form the bedrock of a company. Higher loyalty levels lead to a decrease in marketing expenditure as such customers act as positive advocates for the brand. Besides, a company can introduce more products in its portfolio that are aimed at the same customers at less expenditure. 4. It also acts as a potential barrier to entry for new players and gives time to the company to respond to competitive threats. 5. The bargaining power of the company with the trade channel members is stronger when there are many loyal customers who would only buy the company’s brand. In this case, the retailer merely distributes the manufacturer’s products.

Ex ampl e :Br a ndwi t hHi g hEqui t y Coca Cola Brand Awareness: Coca Cola is one brand, which is recognised by everyone around the globe. It is available in every county in the world except North Korea and Cuba and it has a product portfolio of 3,500 products. From 1993 until 2006 Coca Cola spent 26.7 billion on advertising making it one of the first companies to spend more money on marketing than on the product itself. They have successfully created brand awareness through their authenticity- curved bottle, red and white branding of cans. They have sponsored many famous events and associations to become one of the most well loved brands in history. Brand Association: Coke has had various celebrities in their advertisements such as Taylor Swift and have come up with marketing strategies to campaign “Open Happiness” and “Hello Happiness” as well as creating memories with their adverts such as the infamous “holidays are coming… always coca cola” which people then associate the red colours of Christmas with coca cola. Brand Loyalty: These memories that Coca cola create around happiness, love and Christmas connect with people on an emotional level keeping them loyal customers to the brand even if it means paying higher prices for their products rather than switching to another brand. Justification: It is evident that Coca Cola has high brand equity as it is listed as one of the top 10 most valuable brands in the world by Forbes magazine and it is the single most valuable beverage brand in the world. This is no doubt credited to Coke successfully utilising the three components of brand equity to gain this position....