Brand equity

Brand equity

Brand equity is explained by the consumer’s perception of the brand itself more than the products or services it offers. Companies with recognizable brand names generate more value for their products and gain more customer loyalty compared to lesser-known brands. Firms with high brand equity can change price premiums for their products without losing ideal customers.

Brand equity provides a wide range of competitive advantages; in particular, high brand equity gives a competitive edge for the business and attracts more customers (Buil et al., 2013). This results in higher sales, higher revenues and lower costs of marketing, especially in new markets. Moreover, brand equity is essential in retaining customers, and it gives firms a better position to negotiate with suppliers and retailers.

Adding or dropping products in the market requires extensive research to understand how to navigate the markets. When launching a product, it is essential to understand your competitors and the products and services they offer (Lorette, 2017). The understanding of competition gives firms introducing new products a better chance to review if their product will be a success or not in the market.

Government regulations and law requirements is another vital factor to consider when adding or dropping products. It is crucial to ensure when dropping a product; the firm does not breach any legal obligations with suppliers, dealers and customers using the product (Kotler, 2013). For example, before dropping products, firms need to inform their suppliers in advance to avoid a possible breach of contract.

Lastly understanding the target market is a crucial factor to consider before introducing a product. For, example, if the product is meant to serve the needs of mothers, studying and understanding the needs of that specific group will ensure firms deliver the right products and compete favourably with firms offering similar products.

References

Buil, I., Martínez, E., & De Chernatony, L. (2013). The influence of brand equity on consumer responses. Journal of consumer marketing.

Kotler, P., Armstrong, G., Harris, L., & Piercy, N. (2013). Principles of marketing.

Lorette, K. (2017, November 21). Critical Factors in Marketing a New Product. Retrieved July 03, 2020, from https://smallbusiness.chron.com/critical-factors-marketing-new-product-1509.html