Role of Brand Elements in Developing Brand Equity - Essay Example

Role of Brand Elements in Developing Brand Equity Introduction “Brand can be defined as “A name, symbol, logo, signature or a combination thereof that defines a manufacturer's products or services through differentiating them from competitors' products or services and offers perceptions such as quality, value, prestige to the consumers”(Pars & Gulsert, 2011, p.228). Competition is immense in current business world and prominent companies are looking for every opportunity to increase their competitive power. Brand building is one way of increasing competitive power. Branding is a process intended for building awareness about a product or service. It enhances customer loyalty towards a particular product or service. It helps a product or service to distinguish itself from other products or services. Brands have different attributes which help them to cement their place in the minds of consumers. According to Kathiravana, et al., (2010) “Brand attributes consist of ‘bits’ of information that are linked to a brand name in consumer memory and that, when combined with the brand name, make up a brand’s image”( p.21) “Brand Equity is the value and strength of the Brand that decides its worth. It can also be defined as the differential impact of brand knowledge on consumer’s response to the Brand Marketing” (Brand Equity - Meaning and Measuring Brand Equity, 2013). It is the value that a consumer gives to a particular brand. For example, iPhone 5, Nokia Lumia and Samsung Galaxy S3 are some of the leading smartphones available in the market at present. Apple Inc. is the second largest company in the world in terms of market capitalization and they are the most valuable technology company in the world at present. Samsung on the other hand is one of the rapidly emerging consumer electronics company in the world and its products are well accepted in the market. Nokia was the leader in the mobile phone manufacturing industry until recent times. All these factors or brand elements will influence the consumers when they go for the purchasing of a smartphone. This paper analyses the role of brand elements in developing brand equity. Role of brand elements in developing brand equity Some of the major elements of brand equity are; changing market share, profit margins, consumer recognition of logos and other visual elements, brand language associations made by consumers, consumers' perceptions of quality and other relevant brand values (Wilson C. 2008). Brand elements such as brand names, URLs, logos, characters, slogans, jingles and packaging are playing an important role in developing the brand equity. Brand names “Consumer behaviour blends elements from psychology, sociology, social anthropology and economics”(Zeb et al., 2011, p.225). For example, the name Apple actually represents a fruit. However, in consumer electronics industry, Apple represents Apple Company. A fruit stall owner may not be confused when a consumer asks for Apple. Same way, an electronics product dealer may not be confused when a consumer asks for Apple. The name Bill Gates remind us about Microsoft even through there are plenty of people in that name. In short, names play an important role in identifying the brand and building brand equity. According to Mishra & Datta (2011), “Brand Name (BN) was seen to have a strong impact on Customer Based Brand Equity (CBBE), Brand Association (BAS) and Perceived Brand Quality (PBQ) in case of students whereas for professionals brand name had a stronger impact on Brand Awareness (BA)”(p.109). Students and professionals interpret brand names in different ways. It should be noted that students or teenagers consider the opinions of others while taking any purchasing decision. In other words, they will purchase products based on the mouth publicity. “Young consumers did not consider themselves to be passive victims or conformist. They need to feel they are cool and in”(Pyšnˇakova, n. d, p.32). On the other hand, professionals show more maturity while taking any purchasing decision. They will compare the brand value or reputation before taking any purchasing decision. Mouth publicity or viral marketing techniques may not affect them very much. The following figure illustrates how brand name is associated with customer based brand equity, brand awareness, brand association, brand personality, brand communication, brand image, perceived brand quality and brand loyalty. (Mishra & Datta, 2011, p.111) Customer-based brand equity “Customer-based brand equity is evaluating the consumer’s response to a brand name” (Fayrene & Lee, 2011, p.34). It is not necessary that two customer responses to a particular brand would be the same. In other words, different consumers have different perceptions about a brand. Maruti is India’s favorite car whereas in America or Europe, Benz or BMW outscores the other entire car brands. This is because of the differences in customer perception about some particular brands. It should be noted that Maruti is promoting its vehicle mainly in India whereas Benz and BMW are promoting their vehicles in America or Europe. Brand awareness Imagine, Apple Inc. is going to manufacture automobiles or cars. Even though Apple has no experience at all in car making, people may still purchase Apple cars because of their awareness about Apple brand and its capabilities. As mentioned earlier, Apple Inc. is the second largest company in the world. Therefore people might think that Apple has enough resources in building decent passenger cars. At the same time, Enron Corporation is another American company which is working in the field of energy commodities. Recently this company caught the attention of media because of some of its unethical behaviour. Right now this company is in the black list of Americans. Suppose Enron is coming up with another product; a smartphone or passenger car. People all over the world may not purchase these Enron products because of its poor brand value at present. In short, brand awareness plays an important role in the consumer decision making. Brand associations Brand Associations are not benefits, but are images and symbols associated with a brand or a brand benefit. Associations are not “reasons-to-buy” but provide acquaintance and differentiation that’s not replicable” (Brand Association, 2013). Whenever, people see the symbol or logo of an apple with a bite, they will think about Apple Company. Same way, Nokia has a particular ring tone to remind the people about their brand. Blue colour has strong brand association with Pepsi. Blue colour often reminds Pepsi Cola whereas BMW is famous for superior passenger cars. When people hear the name of Steve Jobs and Bill Gates, they will think about Apple brand and Microsoft respectively. Country of origin is another brand association. Thakor and Kohli (1996) argue that brand country of origin must also be considered. They define brand origin as “the place, region or country to which the brand is perceived to belong by its customers” (p. 27). For example, Japanese products are perceived as the superior quality products whereas Chinese products are perceived as inferior quality products by many consumers. Sony, Toyota, Mitsubishi and Panasonic are some of the Japanese companies famous for producing quality products. It should be noted that many of these companies are now shifted their manufacturing operations to China to exploit the cheap labor available there and to increase the competitive power. “A global brand is no longer exclusively associated with only the country in which it originated, since firms have taken advantage of lower costs by moving their manufacturing or assembly locations to developing countries”(Chung et al., 2009, p.21). “Made in China” and “Made in Japan” like themes create different feelings in the minds of consumers even if the product belongs to the same brand. For example, imagine a case in which a consumer sees Sony cameras made in Japan and China in the same shop. He will definitely go for the camera made in Japan if the prices are the same. According to a study by Han and Terpstra’s (1988), both source country and brand name had significant effects on the quality dimensions, of a product (p.235). Brand Loyalty Brand loyalty is another element of brand equity. Some people have blind faith in some brands. For example, majority of the Americans purchase only iPhones even if better products are available in the market. Having an iPhone is a symbol of pride in America. This is because of the fact that Americans have immense faith in the capabilities of Apple Inc. and Steve Jobs. On the other hand, Asians have faith in Galaxy S3 because of their faith and trust in the abilities of Samsung. There are plenty of people who purchase Nokia Lumia even though Galaxy S3 and iPhone 5 are better products. This is because of the fact that Nokia still enjoys support of loyal customers and their past reputation as a leading mobile phone manufacturer is still helping them. URLs “A company can either use the current owner of the URL for copyright infringement, buy the name from the current owner, or register all name from the current owner, or register all conceivable variations of its brand as domain conceivable variations of its brand as domain names ahead of time” (Brand Elements, n.d.). There are plenty of companies with similar names. In fact, some business people have the habit of naming their company with a name similar to that of a famous company. Consumers may misinterpret such names and purchase goods from that company. Same way, it is a habit of some entrepreneurs to create webpages which mislead consumers. For example, Lumia is the famous smartphone model of Nokia. However, lumia.com leads a person towards another company. If Nokia is particular about the brand name Lumia, they have to purchase the domain name from the developers of lumia.com. Same way, Galaxy is the brand name of Samsung smartphones. However, galaxy.com is already registered by another entrepreneur. If Samsung like to develop Galaxy as a brand name, they have to purchase that domain name from its present owner. In short, URLs can speak many things about the brand equity. Logos Logos and symbols are other brand attributes which speak for a particular product or service. “Logos range from corporate names or trademarks written in a distinctive form, to entirely abstract designs in a distinctive form, that may be completely unrelated to the word mark, corporate name, or corporate activities” (Brand Elements, n.d.). The following picture represents Apple Inc’s logo. (The Evolution and History of the Apple Logo, 2009) Even though Apple Inc used a multicolour logo initially, they changed that to single colour as illustrated above. Apple believes that a single colour logo gives more visibility to Apple brands than the multicolour logo. The above logo says nothing about Apple products; however it is helping the consumers to recognize the name of the company. Once the name of the company identified through the logo, customers will search more things about the company and their products. In short, logos can play vital role in the building of brand equity. It should be noted that logos speak volumes about a company. For example, Hyundai and Honda are accepted the letter “H” as their logo. However, Honda logo H and Hyundai log H are entirely different in appearance. The following illustrations represent the Honda and Hyundai logos. (Honda Logo. 2012) (Guney, n.d.) From the above illustrations, it is evident that how well Honda logo is distinguished from Hyundai logo even though both the companies used the same letter H for the logo making purpose. In other words, the attributes of Honda logo and Hyundai logo are different even though the major theme remains the same. Characters Characters are a special type of brand symbol one that takes on human or real--life characteristics (Brand Elements, n.d.).The following figure represents some cereal brand characters. (Cereal Brand Characters, 2010) Tony the Tiger, The leprechaun from Lucky Charms, Toucan Sam from Fruit Loops, Snap crackle and pop from Rice Crispies and the Trix Rabbit are some of the examples in which characters are used for the brand building purpose. It should be noted that when global sports events takes place, it is a usual habit to promote a funny character as the logo of that event. In the 1982, Delhi Asian games, an elephant called “Appu”, was promoted as the logo or character. In short, band attributes such as characters can play vital role in the building brand equity. A person who sees the symbol of “Asiad Appu” will definitely think about Delhi Asian Games. The intention of the creators of “Asiad Appu” was to promote Asian games as much as possible with the help of this funny character and they succeeded immensely in that endeavour. (Kikkidu Logo Logic, 2013) Slogans “Slogans are short phrases that communicate descriptive or persuasive information about the brand. Slogans are powerful branding devices because, like brand names, they are an extremely efficient; shorthand means to build brand equity” (Brand Elements, n.d.).“A diamond is forever” is the slogan of DeBeers whereas “Between love and madness lies Obsession” is the slogan of Calvin Klein. Connecting people is the slogan used by Nokia and I'm lovin' it is the slogan of McDonald’s. All these slogans have the ability to influence consumers in one way or another. When consumers are exposed to these slogans on a regular basis, the brand name is getting cemented in their mind unknowingly. Jingles Jingles are short tunes used in advertisings or sales promotions. A jingle will never promote the product or service directly. However, it consists of some indirect hooks which lead the customers towards the product. For example, McDonald’s introduced the jingle “You deserve a break today” in 1971. It should be noted that this jingle says nothing about McDonald or its food items. However, it forces the people to think about food when they take break. In radio and television broadcasts, jingles are used quite extensively to promote brand equity. Some of the most popular jingles in the past are given below; Like a good neighbor, State Farm is there. (1971) – State Farm Insurance Double your pleasure, double your fun. (1959) – Wrigley’s Doublemint Gum Be all that you can be. (1981) – U.S. Army A little dab’ll do ya. (1950s) – Brylcreem It’s the real thing. (1970) – Coca-Cola (Daye, 2007) Consumer behaviour is changing day by day because of the huge developments in science and technology and the subsequent changes in living standards. Traditional marketing activities may not be effective at present to sell the products properly in the market. Product manufactures are service providers are trying to touch the sentiments of consumers since purchasing is a psycho active activity. In order to touch the minds of the consumers, marketers are using jingles. Packaging Packaging is another important element which affects brand equity. Prominent brands are particular in delivering their products in unique packets. For example, Samsung Galaxy S3 and iPhone 5 have unique packaging to attract consumers. Packaging helps the consumer to identify the brand properly. It facilitates protection of the products as well as conveys messages about the items inside the box. Even a better quality product may fail to catch consumer attention if it is packed poorly whereas cheap quality products may excel in the market because of superior packing. The visual elements of packing influence the consumers in many ways. “In the USA, USD14 billion was spent on packaging materials alone in 1981. This total was estimated at USD31 billion in 1997 and is expected to continue rising in the coming years” (Chaneta, 2010, p.19). The rise in packing cost in USA can be attributed not only to the increased amount of production but also the readiness of the companies building brand value with the help of packing. Earlier, companies were unaware of the importance of packing to the brand building process. However the evolution of scientific management principles helped companies to realize the importance of packing beyond the boundaries of protection of goods. Earlier, the major objective of packing was to protect the product from destruction at the time of transportation and storage. However, at present packaging is accepted as another brand building activity. Conclusions Brand building is one of the major organizational functions along with other organizational activities. Ultimately, the success and failure of a product in the market is decided by the consumers. It is not easy for the companies to catch the attention of the consumers easily. Advertising and sales promotions are some of the activities which help a product manufacturer or service provider to catch the attention of the consumers. Even smart advertising campaigns and sales promotions may not yield the desired results if the brand value of the company is not so good. In other words, good brand value or reputation is essential for the companies to market their products properly. Brand elements such as brand names, URLs, logos, characters, slogans, jingles and packaging play important role in the making or breaking of a brand. Brand loyalty, brand awareness and brand value helps an organization to market its products and service effectively in the market. 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