Why is something worth more because of its brand?
There are two main underlying reasons, and these directly relate to the functions of a brand. 1. A consumer can identify the brand. If consumers think of a brand when they need a particular product or recognize that brand on the store shelves, then they are more likely to purchase it. 2. The marketer has differentiated a brand in the mind of the consumer. There is a reputation that the company has built or associations that the company has created that make the brand preferable to the consumer.
If consumers think of a brand when they need a particular product or recognize that brand on the store shelves, then they are ______ likely to purchase it.
There is a reputation that the company has built or _________ that the company has created that make the brand preferable to the consumer.
Brand ________ and brand _______ can add value to a brand
Brand awareness and brand differentiation can add ________ to a brand
How can brand awareness and brand differentiation add value to a brand through...
Customers paying a premium price Customers recognizing the product and choosing it because of brand awareness or associations Customers perceiving less risk in the purchase and choosing it (this is especially helpful in service purchase) Customers sharing about the product through word-of-mouth advertising
Customers will pay a _____ price for a brand Customers recognize the product and choose it because of... Customers perceive _____ risk in the purchase and choosing of a brand (this is especially helpful in service purchase) Customers share about the product through ____-___-_____ advertising
- premium - brand awareness or associations - less - word-of-mouth
Godin describes the value of a brand like this: “If the consumer (whether it’s a business, a buyer, a voter or a donor) doesn’t pay a premium, make a selection, or spread the word, then no brand _______ exists for that consumer.”
value How much extra would you pay simply because a clothing item is your favorite brand? Would you pay extra if a clothing item had a luxury brand tag? A shirt can instantly become more valuable if a certain logo is placed on it. Customers pay premium prices for brand associations. Brand price premium happens across all types of industries, and it brings value to companies.
What is brand equity?
brand equity – the added value delivered by the brand over the functional benefits or book value of the product, service, or company. It means if nothing else existed for the company — no products, no warehouse, no land or other assets — the company is still worth something, simply because of the value of the brand equity the company had built.
brand equity – the added _____ delivered by the brand over the functional benefits or book value of the product, service, or company.
How is brand equity calculated?
Book Value of Assets + Brand Equity = Market Value of Brand
Think of your favorite musical artist and the price you would pay to see him or her playing a private gig at your birthday party next year. Now imagine you had the opportunity for an impersonator to play the same show. They would look and sound like the artist. Is it worth as much to you? It is essentially the same service. However, it probably wouldn’t mean quite as much to you, and that’s interesting to consider. That means that there is value in the brand of the performer. Your thoughts and feelings — maybe even past experiences with his or her music — are worth money to you
What is negative equity?
When the worth of products and services decreases because they have a certain brand attached to them.
How can a brand have a negative equity?
This happens particularly in situations where a brand has received negative press or bad reviews and consumers avoid purchasing anything related to said brand.
People’s personal brands can carry a negative equity as well. An (unnamed) statewide politician leaving office recently endorsed another politician in the same state. That outgoing politician had such a poor brand image that other politicians were actually hoping the outgoing politician wouldn’t endorse them.