A brand strength, closely related to Brand Equity, is the value that is carried by a brand. It’s essentially a marketing term that denotes the perception of consumers towards the brand or the value invested in it over a period of time.
Though the definition usually varies across organizations, some would like to term Brand Equity as the premium that a company charges because of the reputation and name that it enjoys because of constantly delivering good products that are remembered.
When consumers have high respect for a brand, think positive about the quality and price, the company enjoys a positive brand strength. If consumers have a negative opinion about a brand and if the brand constantly under-delivers as per expectations, it has a negative brand strength.
A positive brand strength is always profitable for an organization because it allows the company to charge the premium for their products or services in comparison to generic brand pricing used by not-so-differentiated products or services. It gives leeway in many other aspects too.
Example, a company that enjoys a positive brand equity can also transfer its equity on a certain product to other products in its product line extensions and therefore premium revenue streams for its other products too.
Another Example of positive brand strength is Apple which launched its first ever iPhone in the market and its success created positive brand equity for the company. Over a period of time, it has smarty leveraged its brand equity to other products as well include iPads, iPod, etc. that have premium pricing.
Similarly, it can help boost the stock price of a company too by creating ripples in the stock market and positive sentiments in the minds of investors. Moreover, it also raises the valuation of the business that ultimately leads to higher market share. Positive brand strength is always driven by the consumer and the different perceptions that they place on the product.
An example of positive brand strength could be that of Gucci, Italian luxury brand of fashion and leather goods. Gucci enjoys positive brand equity because it offers exclusivity of its fashion wear and operates in a very niche market. It pushes premium pricing because of the exclusivity of its stores too as it has very few stores, creating a consumer perception that it’s an exclusive brand. A negative brand strength, on the other hand, is extremely disastrous for a company as it can tarnish the reputation and lead to bankruptcy.
Brand Equity develops over a period of time and is never a success over a night. It determines the emotional attachment consumers place the product. One can easily determine the equity by listening to what consumers speak about. Example, if 2 people, having different perceptions, still talk positive about the price and quality, it is affirmative that the company enjoys a favorable brand image in the minds of consumers. There are many factors that contribute towards the brand strength and those are mentioned below:
Factors that contribute to Brand Strength
1) Brand Perception
Brand perception usually takes into account consumer’s perception towards the quality of a product. This perception is actually relative. A consumer usually relates the performance and overall quality of a product to his or her own utility and then compares it with similar product lines in the market or with competitor products. Therefore, quality is usually a perceptual factor and cannot be generalized to all consumers.
2) Brand Awareness
Brand awareness is important to the health of a company because it determines the Mindshare that consumers have towards the product. Example, if a consumer wants to buy a mobile phone and the first brand that comes to the mind is Xiaomi, then there is a positive MindShare. Similarly, if a consumer could think of Xiaomi in most of his purchases, it simply means that the brand awareness is positive. The advantage of this is that it allows the company to create demand in the market.
3) Brand Loyalty
A brand Strength also speaks largely of the brand loyalty that consumers have towards the product. Consumers who love the product or service and have an emotional attachment to it, would repeatedly buy the product and are termed as loyal brand ambassadors. This creates wallet share for the company and increased the brand equity too.
4) Brand Association
Brand Association is technically not the benefits offered by the company or is not tangible, but is rather deep-rooted in the minds of consumers. Example, Four Seasons Hotel, one of the world’s largest luxury hotels is immediately associated with luxury, comfort, and quality of service. It creates a positive brand association in the minds of consumers. Positive brand associations are good for creating a positive brand equity and is only possible if the product or services offered by the company is desirable and satisfies the needs of the consumer
It’s not a one-day effort that organizations can create a positive impact towards it brand value. It’s a constant process that builds over time. A company can create positive brand equity by introducing a quality product in the market that is cannot be easily replicated, constantly monitoring competitor moves and market changes, building a personal connection with consumers, having a consistent brand message, and most importantly by capturing consumer feedback.
This allows a company to constantly change its product offerings and also gives an impression that it seriously takes consumer feedback for improvements. Many companies do reinforce brand image by changing their marketing strategies. Example, Pepsi, and Coca-Cola do change their marketing advertisements on a constant basis to reinforce brand association and to capture mindshare.