BRAND EQUITY 1 Essay Example

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Brand Equity Approaches

Estimating the ‘hidden value’ of brands is termed as brand equity whereby in this case it consists of dimensions that focus on psychological impact and economical impact. In order to come up with appropriate brand equity, there are dimensions to be considered. These dimensions are macro and micro whereby the macro focuses on values of company brand and how these values determine brand equity. The micro focuses on responses and its impact on decisions about marketing (Aaker, 2009).

Conversion model is one of the approaches in which it focuses on conversion of the budget to direct towards awareness, market share, penetration, and trial. This approach converts resources and directs it to factors that impact on brand awareness, the trials on whether the brand matches taste and preferences of consumers. Penetration, in this case, aims at ensuring that the brand could be introduced into a new market and whether the whole activity of branding could help the company to get a market share (Aaker and Biel, 2013).

Indirect value assessment is another approach that focuses on the economic benefit of the brand. This is where the total costs incurred in branding is compared to the profits the company has reaped as a result of branding. It is obvious that a brand has its life in the market and therefore indirect value assessment will be limited to the shelf life of the brand. This approach is adopted by companies that that focus on changing brands to fit the market requirements. It is also beneficial because it reflects the profits to be expected and hence the company can make decisions on how to strengthen the branding activity (Leon et al. 2006).

Estimating the net value of investment in communication is an approach that evaluates the amount of budge allocated to the advertisement of new products. It is obvious that new products in the market need more activities on creating awareness. Evergood has carried out advertisement of coffee for the past thirty years and therefore it has to estimate its costs of advertisement and compare the benefits of advertisement with the cost.

Every good to Capitalize on its Brand Equity

According to Wood, (2000) brand equity is beneficial because a company will be able to plan and budget for future market of its products. Evergood has advertised its product for the past thirty years. It, therefore, has to focus on a financial aspect of branding in order to succeed in the journey of brand strategy in future. Evergood needs to capitalize on its brand equity by focusing more on the psychological impact of its brand to customers; in this case, coffee as the brand is regarded as expensive, people of certain class, therefore, consume it. Evergood branding should, therefore, segment its products according to customer perception and their income level. This will ensure that the products are available to people in all levels of class and that the pricing strategy favors income levels of people. Indirect value assessment should also be adopted by Evergood as well; this will enable development of strategies to minimize losses incurred on the branding of products whose shelf life is expired. It will enable the company to strategize on another aspect of marketing and branding of new products.


Aaker, D. A. (2009). Managing brand equity. Simon and Schuster.

Aaker, D. A., & Biel, A. (2013). Brand equity & advertising: advertising’s role in building strong brands. Psychology Press.

Leone, R. P., Rao, V. R., Keller, K. L., Luo, A. M., McAlister, L., & Srivastava, R. (2006). Linking brand equity to customer equity. Journal of service research, 9(2), 125-138.

Wood, L. (2000). Brands and brand equity: definition and management. Management decision, 38(9), 662-669.