Table of Contents
The ever-increasing dynamic and competitive nature in the business environment demands companies to create concrete strategies, which would enhance realization of business goals. The tendency of companies to focus on brand pricing has led to cases of neglect in product formulating quality improvement plans. Therefore, brand equity has become an essential change for businesses especially those working on establishing their brand marketability. Brand equity has enabled businesses develop ability to resist pressure of competing largely on pricing basis (Fisher-Buttinger and Vallaster, 2008, p.123). Notably, brand equity saves the company from being victim of short-term pay off price promotion initiatives that has proven ineffective.
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The concept of brand equity is normally perceived differently with concerned stakeholders in a market and society. For example, some potential consumers perceive brand equity as value added on functionality of the product with regard to brand name (Aaker and Biel, 2013, p. 2.). On the other hand, a company would view brand equity as a postponed discounted value of profit stream, which has some level of relation to enhanced loyalty and emanates from brand name. The company managerial department being a stakeholder attributes brand equity to combination of assets, which entails brand awareness, brand loyalty, perceived quality, and association attached to the brand name.
There is need for an empirical and theoretical understanding of how to create and manage brand equity. Some of the notable guiding principles should entail developing approaches of measuring asset value of a brand name. Additionally, an element on which brand equity is constructed becomes essential in achieving intended goals. Moreover, understanding on the ways of exploiting brand equity through brand extensions would enhance overall product market penetration potential.
Connective branding should focus on a framework, which incorporates principles of alignment and engagement. Systematically, the four important brand levers should entail brand strategy, brand building and management, stakeholder management and enabling processes and structures. Appropriate brand strategy should clearly elaborate the roles, which are consistent with brand mandate. For example, brand strategy should adequately align to business priorities and culture to the various interests of concerned stakeholders. Evidently, brand strategy becomes a first step undertaking which determines the long-term business success. For example, in the conception stage, developing and assigning brand name determines the power to influence market. The increase in power owing to the brand name would add more consumers by winning on their trust. This would later turn the pleased consumers into company’s advocates. Therefore, an effective brand should inspire factors such desirable products, service, and experience.
The large penetration of the brand name in the market would lead to realization of improved revenues for the business. For example, BMW brand name has more power in the market to an extent that even consumers without buying potential are aware of the automobile company products. Another intricate perception of branding regards association with consumer mental predefined awareness through experience (Kapferer, 2012, p. 10). For example, in the soft drink market rivals, Pepsi and Coca-cola, people who are able to read of the brands have been observed to prefer Cocacola products owing to informed mental positions. Therefore, brand equity should have an emphasis on consumer loyalty, which is evidenced through repeated purchases of the company’s products.
Additionally, engaged loyalty should be based on emotional ties and commitment of consumers. Comparison of brand equity is structured on two pillars, which include brand awareness and the perceived high quality. Customers expect the brand to deliver high quality with regard to functionality and fair pricing. Sony and Samsung companies are case examples of organizations management of complexities in brand awareness and quality. Samsung has become notable leading brand in producing smart phones, televisions, and home equipment market. Through embracement of systematic innovation, Samsung products are price fairly in the market with advantages of efficient and reliable trade relationships in the mass-market channels. On the contesting side, Sony has historic power of strong brand, which is still visible in the electronics and home appliances market. Owing to the cultural elite and induced perception of higher quality aspects of Sony products, it still has a grip on considerable market share, which demonstrate thoughtful brand equity strategy. The lifeblood of Sony therefore is dependent on brand capital aspect of brand equity. This has made Sony to have an upper hand with regard to retaining of the client with assurance of future of increment in revenues in the highly competitive market.
On the other hand, BMW and apple are also examples of companies, which have adopted brand capital in their branding strategy. The two companies are notable for producing products for the higher end or luxury market, which tends to lock most of the potential consumers. Surprisingly, most consumes are observed to hold future aspiration of buying such products owing to the high quality aspect and perception. The strategy offers future revenue and market expansion for apple and BMW business. The above case illustrates the relationship between corporate reputation and brand equity in driving future growth prospect of corporations.
Brand equity management is another important aspect of creating revenue streams for businesses. Effective management of brand equity is based on adopting certain measuring approaches, which include studying of the habitual buying behavior of the company’s consumers. Brand loyalty therefore would not be available without consideration of prior purchase and reports from customer user experience. Since most of the customer loyalty is tied to brand name, attempts to introduce changes would make a company to incur direct losses. Notably, these would result in reduction in the sales volume and profit. The company would also grapple with investing huge amount of money in rebranding which is costly considering the recreation of new awareness campaigns.
Therefore, the management should adopt and implement formal statements and shared vision for the brand throughout the organization. Moreover, there should be elaborate and purposeful inclusion of the firm partners. Such partners would include promotion agencies and potential retailers. Consumers should experience result of effective brand design, pricing, communication, and channels for distribution (Bidgoli, 2010, p.431). Effective brand equity management through sustained customer loyalty have several benefits which include reduced marketing cost , attracting of new customers, and more time for tactically attending to competitive threats.
The reduced marketing cost emanates from the fact that it is less costly to make already loyal customers as compared to the new ones. The society becomes another important stakeholder with regard to brand equity. Therefore, business organizations engage more effort in improving brand image through activities, which endear society to their company. This would result in realization of increased market share. One of the widely used approaches is through launching of corporate social responsibility programs. Such program has become models for most businesses, which helps in the creation of public perception of acting as an agent of positive transformation besides profit making.
Management of Corporate Reputation
The management of corporate reputation should be undertaking which supersedes engagements in cats of philanthropy or corporate social responsibility. Companies, which operate without integrity in the volatile and high regulates business environment are faced with risk of being exposed leading to damage of the public image (Neef, 2012, np.).
Corporate social responsibility will result in enhanced brand loyalty, which attracts more of the reluctant customers in trusting business institution and expanding on the market. The role of CSR in strategic brand management is based on the premise of leveraging investments in the projects that build on the company image (Corkery, Mikalsen, and Allan, 2016, np). There will be creation of positive brand associations in the operational market, which effectively differentiates the company from the competitors. The use of CSR incorporates the community and customers as important stakeholders. Some of the notable benefits of CRS in the community include improved quality of life through employment and wealth creation. Customer’s choice on buying certain companies products have been determined by focusing on sources, process and ingredients used in making of the products.
For example, Burberry Company, which operates in fashion industry, has embraced transparency and CRS activities, which promotes ethical trade community development. Case example regards working with other NGOs in a bid to commit to the plan of reducing environmental pollution through eliminating the release of harmful chemicals in the environment by 2020 (Urip, 2013, p.18). Other engagement involves supporting charities, which help young individuals in the region where most of the company’s employees live.
Therefore, business organizations should focus and attend to range of commercial and social issues, which improve corporate reputation. The management of business organizations should adopt operational methods which factor and amicably evaluates interest of concerned stakeholders. Moreover, violation of certain requirements would lead to businesses incurring heavy penalty, which would lead to huge financial losses (Burke, Martin, and Cooper, 2016, p.222). Enhanced corporate imaged is dependent on mechanisms within organizations aligning business goals to the interest of concerned stakeholders. The stakeholders include employees, customer’s community, and the government. The employees’ role in enhancing business reputation involves monitoring behavioral aspects of customers. Practical approaches focus on whether employees are paying attention to needs of customers. Additionally, the employees should respect rights of customers seriously during service delivery. For example, Salesforce a cloud computing company uses the stakeholder model 1/1/1/ towards commitment to community welfare projects and environment. Salesforce company management regards environment protection as one of its stakeholder and has transparent and accountable governance, which greatly improved the company reputation (Ferrell and Hartline, 2015, np).
Additionally, employees should not discriminate customers on the premise of economic status. Compliance to the above regulation would enable realization of enhance reputation of companies’ image in the public. Management of corporate reputation should also focus on issues regarding social ethics in a bid to gain the support of the related agencies mandated to oversee compliance to ethical requirements. For example, Coca-Cola Company has been working on saving its reputation from allegation of violation of human rights through sponsoring notable sporting events such as the World cup tournament (Griffin, 2008, p.14). The sporting event advocates for equality and non-discrimination based on race and religious background.
The management being a decision-making unit of the organization should institute measures, which ensure fair practice in employee recruitment. This would entail fighting discrimination tendencies based on culture or religious affiliation of the employees or the targeted market (Helm, LIehr-Gobbetsand and Storck, 2011, p. 156). Moreover, there is need for declaration of elaborate punitive measures for degrading inhuman acts such as sexual violence in the organization. Hence, the society would perceive businesses positively as contributing to the social progress in enhancing the organization image and the associated brand. For example, Coca-Cola Company has been working on saving the reputation from allegation of violation of human rights through sponsoring notable sporting events such as the World cup tournament (Griffin, 2008, p.14). The sporting event champion for equality and non –discrimination based on race and religious background.
Relationship between Brand Equity and Corporate Reputation
Strong brand equity has been observed to lead in improved customer loyalty. The relationship between corporate identity and effective management of reputation creates platform for building of the brand equity (Elliott, Percy and Pervan, 2015, np). Corporate reputation should be appreciative to all the shareholders and be consistence with overall corporate goals. Therefore, corporate reputation has become lead indicators of corporate brand without which is impossible to assemble positive brand. The designers of corporate identity has to consult with important stakeholders groups such as the customers, employees, and general public to enable development of the celebrity status of the brand . Case example, is the Google Company; a notable industry leader in search engine market, which has achieved celebrity brand status. Arguably, the linkage between the brand equity and corporate reputation has an influence on customer equity. These would influence customer value and loyalty.
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The brand equity as an assent of business organization would not work in isolation without existence of proper corporate management of the corporate reputation. Customer brand loyalty has to be sustained through involvement of the necessary stakeholders in constructive way. Additionally, brand equity and corporate reputation evidently alludes to the long term goals of ensuring enhanced market share which result in consistent revenue stream. Organizations management function should embrace brand equity and corporate reputation as pivotal asset in building on business integrity. Moreover, assessing of corporate reputation value, which includes honesty and transparency depends on perception of individual consumers.
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