THE VALUE OF A BRAND AND BRAND EQUITY – a franchise perspective
Brand equity is a market-based intangible asset that refers to the preference customers display for a selected brand amongst seemingly similar products, and their willingness to pay a premium for it.
By Gerhard van Wyk
The Avusa Media Survey (2011) assessed the strength of brands in South Africa and revealed the top brands in a range of categories that included; alcoholic spirits, where Hennessy, Jameson and Johnnie Walker took top honours, in cell phones it was Nokia, Blackberry and Samsung, ABSA, Standard Bank and FNB were tops in retail banking, while BMW, Mercedes Benz and Toyota made top of the log for cars, and the top three electronic goods brands were Samsung, LG and Sony.
Aaker`s model defines the asset categories that make up brand equity and the benefits they hold for an organisation/franchise.
Brand awareness is the strength of a brand’s presence in the mind of the consumer. Measured by recognition and recall, brand awareness signals substance and commitment and creates the anchor to which other brand associations can be attached.
Brand loyalty refers to the general willingness of customers to repurchase the same brand. Brand loyalty reduces franchise marketing costs, attracts new customers and in times of competitive threats allows the franchise time to respond.
Perceived quality is the reason why customers buy, and are willing to pay a premium price for the brand based on differentiation and positioning. Perceived quality assists franchises with extensions and enables them to demand premium prices.
Brand association refers to the attributes consumers associate with the brand. It provides a reason to buy and creates positive associations and feelings that can lead to brand extensions attached to the brand, such as channel relationships (franchisor / franchisee relationships) and patents.
Brand equity creates value for customers and franchises. By enhancing their interpretation and processing of information, customers are reassured, effectively boosting their confidence in the purchasing decision. For franchises it creates value by attracting new customers and creating an opportunity for brand extensions.
For franchises to benefit from and build on brand equity, and hence grow shareholder value, an investment in a marketing programme that drives brand equity is necessary. In turn this will support brand loyalty, result in improved margins and contribute to a competitive advantage for franchisees.
By Gerhard van Wyk
The Avusa Media Survey (2011) assessed the strength of brands in South Africa and revealed the top brands in a range of categories that included; alcoholic spirits, where Hennessy, Jameson and Johnnie Walker took top honours, in cell phones it was Nokia, Blackberry and Samsung, ABSA, Standard Bank and FNB were tops in retail banking, while BMW, Mercedes Benz and Toyota made top of the log for cars, and the top three electronic goods brands were Samsung, LG and Sony.
Aaker`s model defines the asset categories that make up brand equity and the benefits they hold for an organisation/franchise.
Brand awareness is the strength of a brand’s presence in the mind of the consumer. Measured by recognition and recall, brand awareness signals substance and commitment and creates the anchor to which other brand associations can be attached.
Brand loyalty refers to the general willingness of customers to repurchase the same brand. Brand loyalty reduces franchise marketing costs, attracts new customers and in times of competitive threats allows the franchise time to respond.
Perceived quality is the reason why customers buy, and are willing to pay a premium price for the brand based on differentiation and positioning. Perceived quality assists franchises with extensions and enables them to demand premium prices.
Brand association refers to the attributes consumers associate with the brand. It provides a reason to buy and creates positive associations and feelings that can lead to brand extensions attached to the brand, such as channel relationships (franchisor / franchisee relationships) and patents.
Brand equity creates value for customers and franchises. By enhancing their interpretation and processing of information, customers are reassured, effectively boosting their confidence in the purchasing decision. For franchises it creates value by attracting new customers and creating an opportunity for brand extensions.
For franchises to benefit from and build on brand equity, and hence grow shareholder value, an investment in a marketing programme that drives brand equity is necessary. In turn this will support brand loyalty, result in improved margins and contribute to a competitive advantage for franchisees.
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