How to evaluate 'Brand Equity'??

One way to measure brand equity is to determine the price premium that a brand commands over a generic product. For example, if consumers are willing to pay $100 more for a branded television over the same unbranded television, this premium provides important information about the value of the brand.

However, expenses such as promotional costs must be taken into account when using this method to measure brand equity.

Thanks for the referral Ms.Meena Deshmuk.

There are several factors to evaluate the Brand Equity. Many companies in different industries are realizing the need to focus on brand building.A strong brand is often the tie-breaker when product, service, and price are near parity.In the competitive environment the key issue is to distinguish the brand from the competitors. Brand is one of the most valuable asset of any business.

The Brand Evaluation relates to, how is your brand performing that involves brand strength like quality & services, easy remembrance by the customers, repeated use, relevance, creditability, customer preference, life time value, brand added value, carrying consistent image over a period to reinforce its place in the minds of the customers, develop a special relationship with the customers, and above all the revenue generation capabilities and brand added value.

A number of organizations rely on brand recognition for building customer loyalty. This makes BRAND EVALUATION an important exercise that has to be carried out on regular basis. This is to judge the effectiveness of brand in contributing to the customer base expansion. BRAND EVALUATION is a significant component of brand management revolving around sustaining the POWER OF BRAND. People are able to distinguish a given product or service from the other similar options available in the market with the help of brand.

Brand equity is an intangible asset that depends on association made by the customers. a positive evaluation by the customers is important.   

When a good quality is existed then brand name will follow the quality. I can say the quality of the product is greater than any brand name. The brand name should follow the quality.

Measuring a brand Equity (+e or –ve)

First of all one should be able to predict the income stream from a branded product.  What is the “Increase in Cash Flow” that can be achieved for a branded product, when compared with a generic product? Since increase in cash flow can be achieved through various strategies like concentrating on improved market share, and / or reduced promotional costs, and / or premium price for a product. Positive brand equity (Brand equity) is created by marketing activities such as advertising, PR and promotion, and negative brand equity (Brand liability) exists because of catastrophic events to the brand such as a wide product recall, continued negative press attention (To what extent Press attention to fire accident related to  Tatas Nano car and press release for Tatas explaining the cause and action taken by them in retaining customer confidence and race by other car makers - at least one manufacturer  to bring a model similar to Nano had negative impact on Nano bookings or cancellation of bookings or Tata image?)

Companies have spent entire turnover from a particular product to build a brand image for that product during initial years of that product. But does such expenditure can be justified if promotional expenses doesnot result in improved market share, acceptance of premium price for the product by the consumer and you are able to reduce the promotional costs in subsequent years and in the next few years you are able to improve market share if not overtake your competitors at that price. Building a brand as “lowest cost at matching quality or better or the best for that price” with a continued negative cash flow of the company will not result in brand equity.

A successful brand can be used as a platform to launch related products. The benefits of brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures, and a lower risk from the perspective of the consumer. Furthermore, appropriate brand extensions can enhance the core brand. However, the value of brand extensions is more difficult to quantify than are direct financial measures of brand equity.

Strong brand equity provides the following benefits:

    * Facilitates a more predictable income stream.
    * Increases cash flow by increasing market share, reducing promotional costs, and allowing premium pricing.
    * Brand equity is an asset that can be sold or leased.

it is factor which can increase   the finanacial  value of the brand to the brand owner.brand equity is not only the brand extension.brand extension can occur when the brand equity is high,but it is noy systemtic.a brand is the effect of the brand on the difference between the price that cosumer accepts the pay when band is known compared to the value of the benifit received..........

I believe these are the two key metrics for a Brand to decide its share in a competitive market.

Does that product that carries the brand communication stand upto the claims of utility? Does it benefit (utility) the consumer base across all strata?? These two indices have to decide the Equity that the BRAND shares in the competitive market. In fact shares is a wrong word... OWNS!! Equity needs to be owned and not shared!!

Very interesting ideation :)

IMAGE & GOODWILL FOR ANY BRAND ARE CRUCIAL,WHICH DEPICT THE CONFIDENCE OF THE PUBLIC PATRONISING THE BRAND WHICH LEADS TO AN UPWARD GRAPH IN SALES & PROFITS FOR THE MANUFACTURER.ULTIMATELY IT IS THE BOTTOMLINE FOR THE BRAND OWNER WHICH COUNTS AND TO INCREASE IT ONLY ALL ACTIVITIES  ARE UNDERTAKEN.

your competitor promote his product in which manner.analyse weak point then decide.

Well I amnt entering into an area where the general discussion is . But Brand resistance (I wouldnt call it consciousness) is very much present in the product I deal i.e the FMCG Sector . This is simply because people are never interested in trying out a new product however they may be . Even if they try the Brand is so much overwhelming it never goes into the heart or head . I had promoted a detergent called KITE with my Dhobi friends who found the quality so good and the greatest USP of the product is washable under any sort of water and consumption of less water . Yet in one case there had been site inspection by one major customer who insisted usage of a Branded product  for no valid reason . To build a brand u need a lot of money and repetition . Tell me we shall improve quality or spend  money on advertisement .  Many home makers had been convinced about my product during free demonstration and sampling but when it comes to requisition they chose by default the Branded items.

Out of different brands with more or less same quality, cost, delivery channels in competition, the consumer looks for post sales service whether it is prompt, response is immediate and courteous. Post sales is available locally or not, service is attended to at the consumers door step or the consumer has to go to the outlet etc will decide the preference of the consumer and this outweighs all other factors when one brand can deliver the post sales service better than other brands