The importance of brand knowledge in building strong brand equity.

University Degree Business and Administrative studies

The importance of brand knowledge in building strong brand equity

There has been an increasing interest in brand equity among marketing academics and practioners (Cobb-Walgren, Ruble & Donthu, 1995; Yoo, Donthu & Lee, 2000; Faircloth, Capella & Alford, 2001). In 1991, a survey involving Marketing Science Institute (MSI) members reported brand equity to be a major issue facing marketing management. Researchers have focused on defining and measuring the concept of brand equity and, to a lesser extent, understanding its causes and effects (Cobb-Walgren et al, 1995). This paper will provide an overview of brand equity, brand knowledge, brand awareness and brand image. Factors that influence the creation of strong brand equity, namely brand awareness and brand associations, will be the main focus.

Brand equity

Before we can discuss and begin to understand brand equity, we must firstly define the term “brand”. A brand is a name, term, sign, symbol, design, symbol or a combination of these, that identifies products of one seller or a group of sellers and differentiates those products from competitors (Anderson & Vincze, 2000; Cravens, 2000; Kotler, 2000). It is the seller’s promise to consistently provide certain features, benefits and services to buyers (Kotler, Armstrong, Brown & Stewart, 1998; Kotler, 2000). Brands offer consumers added value based on factors that are over and above the product’s functional performance (Knox, 2000; Bradmore, Joy, Kimberley & Walker, 1997). For example, The Body Shop manufactures and sells cosmetics that are not animal tested and in attractive recyclable packaging. Given this, consumers perceive that the brand name, The Body Shop, not only offers cosmetics, but also offers the image of being environmentally responsible.

The set of assets associated with the brand, which add to the value provided by the product to the company and/or its consumers is called brand equity (Anderson & Vincze, 2000; Evans & Moutinho, 1999; Cravens, 2000). Many other definitions of brand equity have been proposed. MSI (1989) defines brand equity as a financial asset and as a set of favourable associations and behaviour. Farquhar (1990) defines it as positive evaluations of, or attitude towards, the branded product while Keller (1993) defines it as a more favourable differential response to the company’s marketing efforts. For example, if a consumer was asked to choose between two TVs that are exactly the same, but one is branded Sony and the other an unknown brand, we would expect the consumer to choose the Sony branded TV. Consumers will react more favourably to and prefer to purchase the Sony branded TV because they perceive it to have more value. I would certainly choose the Sony TV as I believe it would be a better quality product and I would feel more trendy if I owned a Sony than an unknown brand. Sony is a well-known brand and it is stocked in every store that sells TVs. This simply illustrates that Sony has stronger brand equity than the unknown brand. This leads us to the question, “How can we build strong brand equity?”

Brand Knowledge

These assets, that add extra value to the product and, according to Keller (1993), cause a favourable differential response from consumers, include brand knowledge (Aaker, 1991; Keller, 1993, 1999, 2001). Brand knowledge is composed of brand awareness and brand image (Keller, 1993, 1999, 2001). Brand awareness relates to the consumers’ ability to identify the brand under different conditions (Keller, 1993; Anderson & Vincze, 2000; Evans & Moutinho, 1999) while brand image relates to the set of associations linked to the brand that consumers hold in their memory (Keller, 1993).

It is important to understand both these ...

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Brand Knowledge

It is important to understand both these dimensions as they are each positively related to brand equity (Yoo et al, 2000). Keller (2001) also stated that the first step in achieving brand equity was to ensure that consumers identify with the brand and form an association of the brand in their minds with a specific product class or customer need. Therefore, enhancing brand knowledge, through brand awareness and associations, to generate a favourable response from consumers can result in strong brand equity.

Brand awareness

Brand awareness consists of two dimensions - brand recognition and brand recall performance (Keller, 1993, 2001). Brand recognition refers to the consumers’ ability to confirm prior exposure to the brand when given the brand as a cue. It has been suggested that brand recognition can be more easily achieved by using unusual or distinctive word(s). Distinctive words attract attention and create less confusion among competitors. Brand recall refers to the consumers’ ability to retrieve the brand when given the product category or some other probe as a cue. It has been suggested brand recall can be more easily achieved by using familiar word(s) representing a familiar concept, object or property as a brand name. This is because consumers already hold more information about the familiar word(s) in their minds. The dimension which marketers will choose to lay emphasis on depends on many factors such as the competitive environment and consumer purchasing behaviour (Keller, 1993).

Brand awareness plays an important role in brand equity. In order for consumers to respond favourably to the brand, i.e. purchase, they must first be aware of that particular brand. For example, if consumers have the brand in their minds when they are thinking about a certain product category, the chance that this brand will be considered during the purchasing process will be increased. Being aware of the brand can also affect purchasing decisions as consumers have been shown to select familiar, well-established brands over unknown brands (Keller, 1993; Aaker, 1991).

Building brand awareness involves ensuring consumers understand the product or service category in which the product competes in and creating links to the product or service sold under the brand name (Keller, 2001). Marketers must ensure that consumers do not overlook the brand and consider its purchase in situations where the brand can satisfy the consumers’ needs and wants. Thus, repeatedly exposing consumers to the brand can better enable consumers to recognize and recall the brand, leading to enhanced brand awareness. This increase in awareness can therefore lead to the attainment of strong brand equity.

According to Nackache (1998), there are several ways in which companies can create strong brand awareness:

Develop creative advertising;
Sponsor well-regarded events;
Invite consumers to join a club;
Invite the public to visit their factory or office;
Create own retail units;
Provide well-appreciated public services;
Provide visible support to some social causes;
Be known as value leader; and
Develop strong spokesperson or symbol to represent company.

Brand image

According to Keller (1993, 2001), there is a myriad of different types of brand associations possible. Brand image is composed of several brand associations:

Attributes - descriptive features that characterise the product;
Benefits - personal values that consumers link to the product’s attributes; and
Attitudes - the consumers’ overall evaluation of the brand.

These associations vary in their strength, favourability and uniqueness. The strength of brand associations depends on how information about the brand enters consumers’ minds and how it is maintained as part of the brand image. Strong associations can be created if consumers actively think about the significance of the product. Brand associations become favourable when consumers believe that the brand’s attributes and benefits satisfy their wants and needs, thus creating an overall positive brand attitude. The uniqueness of a brand may be based on its attributes or benefits. Marketers must communicate this uniqueness by highlighting the difference or by directly comparing the brand to its competitors to show that the competitors do not offer this attribute or benefit (Keller, 1993).

The strength, favourability and uniqueness of a brand plays an important role in brand equity. Associations that are strongly held, favourably evaluated and are unique to the brand are seen to be more superior over other brands (Keller, 1993) and several studies have suggested that these associations lead to strong brand equity (Aaker, 1991; Keller, 1993, 1999; Faircloth et al, 2001). Examples of brands with strong, favourable and unique associations include, Nike – innovative products, peak athletic performance, BMW – styling, driving performance, and Intel – performance, compatibility (Keller, 2001).

Marketers must note however, that not all associations are important and are of use during the purchasing process (Keller, 1993). Also, overloading consumers with brand associations can result in undesirable images. Marketers should pro-actively control associations communicated to consumers and ensure that they are communicated consistently in all marketing activities in order to achieve strong brand equity (Faircloth et al, 2001). Negative associations can also arise because of changes in consumer tastes (Keller, 1999). Thus, marketers must monitor the marketing environment and ensure that their marketing activities create positive associations.

According to Anderson & Vincze (2000), there are several factors to consider when building positive brand image:

Product quality - the product itself must perform beyond the consumers’ expectations;
Consistent advertising - advertising activities must be consistent in effectively emphasizing the brand’s competitive advantages;
Distribution effectiveness - the consumers must be effectively exposed to the brand during shopping; and
Brand personality - brands must represent a specific image that the target market will favourably respond to.

Implications

To build strong brand equity, marketers must carefully manage brands by maintaining or improving brand awareness and associations through continuous R&D investment, skillful advertising and excellent trade and customer service (Cravens, 2000; Kotler et al, 1998; Kotler, 2000). Marketers must manipulate these marketing activities in order to improve the consumers’ ability to recall or recognize the brand and to create, maintain or change the strength, favourability or uniqueness of brand associations. Strong brand equity can be created if consumers are aware of the brand and hold strong, favourable and unique brand associations (Keller, 1999). From this, we can see that brand awareness and associations cannot be easily and quickly created and destroyed as planning, implementing and maintaining these marketing activities take time. Both brand awareness and associations are important when building strong brand equity. If consumers can easily recall the brand but find its associations unfavourable, strong brand equity will not be formed.

Strong brand equity is a valuable asset to the company since brand equity is durable and sustainable. Brands that have strong brand equity distinguish and help position the product relative to the competitors’ products and encourage repeat purchase (Cravens, 2000). This is the type of brand that consumers prefer to purchase, and thus, resellers choose to stock. They attract a high market share due to customer and reseller purchasing preferences and therefore are more profitable (Knox, 2000).

Strong brand equity offers sustainable competitive advantages such as:

Reduced marketing costs relative to its revenues;
Greater leverage when bargaining with distributors and retailers as consumers expect them to carry the brand;
Opportunity to charge a higher price than the competitors’ products because the brand has a higher perceived value;
Opportunity for brand licensing;
Less vulnerable to competitive marketing actions;
Launching brand extensions with ease as the brand name has high credibility; and
Defence against fierce price competition (Evans & Moutinho, 1999; Kotler et al, 1998; Kotler, 2000; Yoo et al, 2000; Keller, 2001).

Reference

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The importance of brand knowledge in building strong brand equity.