Brand Equity Assets

Five categories of assets that underline Brand Equity:

Brand equity assets require investment to create, and will dissipate over time unless maintained.

1. Brand Loyalty

The loyalty of the customer base reduces the vulnerability to competitive action. Competitors may be discouraged from spending resources to attract satisfied customers. Further, higher loyalty means greater trade leverage, since customers expect the brand to be always available.

    2. Awareness of the Brand name and Symbol

A recognized brand would be often selected over an unknown brand. The awareness factor is particularly important in contexts in which the brand must first enter the consideration set - it must be one of the brands that are evaluated. An unknown brand usually has little chance.

   3. Perceived Quality

Perceived quality will directly influence purchase decisions and brand loyalty, especially when a buyer is not motivated or able to conduct a detailed analysis. It can also support a premium price which, in turn, can create gross margin that can be reinvested in brand equity. Further, perceived quality can be the basis for a brand extension. If a brand is well-regarded in one context, the assumption will be that it will have high quality in a related context.

   4. A set of Associations

The underlying value of a brand name often is based upon specific associations linked to it. If a brand is well positioned upon a key attribute in the product class, competitors will find it hard to attack. If they attempt a frontal assault by claiming superiority via that dimension, there will be a credibility issue. It would be difficult for a competing department store to make credible a claim that it has surpassed Nordstrom on service. They may be forced to find another, perhaps inferior, basis for competition. Thus, an association can be a barrier to competitors.

   5. Other proprietary Brand Assets

The last three brand equity categories we have just discussed represent customer perceptions and reactions to the brand. the first was the loyalty of the customer base. The fifth category represents such other proprietary brand assets as patents, trademarks and channel relationships.

Brand assets will be most valuable if they inhibit or prevent competitors from eroding a customer base and loyalty. These assets can take several forms. For example, a trademark will protect brand equity from competitors who might want to confuse customers by using a similar name, symbol or package. A patent, if strong and relevant to customer choice, can prevent direct competition. A distribution channel can be controlled by a brand because of a history of brand performance.