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Brand equity is the consumer's brand cognition that brings benefits to enterprises. Two advantages: one is to buy my products, and the other is to spread my good reputation. In enterprise management, no matter what you do, everything is based on whether assets are formed, whether assets are protected and increased.

Li Xianhong

In this issue, I will read Managing Brand Equity, which is the work of David Ackell, a leading figure in American brand field and the "originator of brand equity management".

It is also from his series of books that I have refined the slogan "Brand equity is brand competitiveness" of western red strategic marketing companies.

Before formally sharing, I'll take you to clarify some knowledge points at the principle level.

1. In this world, there is no pure brand major, marketing major, corporate brand image, brand design major, network promotion, network communication ... there is only one major, which is business administration major. Only with it can other majors be established.

2. We must first answer clearly, what is an enterprise and what is a brand? Otherwise, we simply don't know how to engage in marketing, communication and promotion. Recommended reading: Three Principles of Red Enterprises in the West and Three Principles of Red Brands in the West.

3. Brands or marketing that leave the corporate strategy and the overall business thinking are all pseudo-marketing, not only don't know what they are doing, but also don't know that they don't know.

4. In the long run, brand is the only asset that can span the long river of time, and it is the purpose of all activities of the enterprise. The reason is that all enterprises have a life cycle, but brands are not limited to this. Apple, for example, may lose its parent company with the death of Jobs, but its brand can last forever.

Behind the above points are Coase's transaction cost law, Drucker's social function law, Schumpeter's innovation profit law and so on, so I often say that "if you don't understand the enterprise, you won't understand marketing".

Brand equity is brand competitiveness. The implication is that all business operations are in the process of accumulating brand assets. After reading this article, you will understand this sentence.

What is brand equity? Let me show you the view of David Ackell, the originator of brand asset management. He is the teacher who established my brand equity view.

This book is mainly divided into three parts:

The first part talks about the spiritual core of brand equity, which refers to assets that are associated with brand names and signs and can increase product value or service value for customers and enterprises.

The second part describes the dimensions of brand equity creating value, including brand loyalty, brand awareness, perceived quality and brand association, which have created great value for customers and enterprises from their own unique perspectives.

The third part describes other management methods of brand equity, including brand expansion and brand revival.

First, how to understand the spiritual core of brand equity?

Let me tell you a little story. 188 1 year, P&G introduced a skin cleansing soap called "Ivory". Compared with other soaps, ivory soap has two characteristics: first, there are few impurities, only 0.56% impurities, which are very gentle and can be used by babies with delicate skin; Another feature is that it can float, even if the soap falls into the water, it will not sink, which helps people to reduce a lot of distress.

Therefore, this ivory soap is positioned as a pure, gentle and floatable soap. Procter & Gamble invested 1. 1.00 million dollars as the national advertising expenditure. The advertising language said that ivory soap "can float on the water" and "the purity is as high as 99.44%". This slogan has become one of P&G's most famous advertising words, which accurately describes the characteristics of ivory soap. Up to today, ivory soap has a history of 100 years, but its positioning has not changed with the passage of time.

Procter & Gamble, which tasted the influence of ivory soap brand, launched 83 advertising brands in the late 1980s, with annual sales of nearly $20 billion. Among 39 competing products, 19 ranked first in the American market, with an average market share of 25%.

Developing brand equity, establishing brand management system and making continuous efforts in marketing became the key to P&G's success at that time.

In Aker's view, brand assets refer to assets associated with brand names and signs, which can increase product value or service value for customers and enterprises. It includes four dimensions, namely brand loyalty, brand awareness, perceived quality and brand association.

For customers, brands can help them understand, process and store a lot of product information. If we don't have a ready-made brand name in mind, even buying a bag of laundry detergent may be a long process of comparison and selection.

Brand can also affect customers' confidence in buying products again and increase customers' satisfaction with product use.

Brands can also bring joy to customers. For example, when a customer is told that she is trying on Tiffany, the world's most deadly jewelry brand, she will be very happy.

From the enterprise's point of view, firstly, brand equity can improve the effect of marketing plan, attract new customers and recapture old customers. If customers are familiar with a brand and have confidence in the quality of the brand, in this case, the promotion will encourage customers to try new tastes or new uses, and the promotion activities will achieve the expected results more easily.

Secondly, brand equity can make your products more valuable. On the one hand, brands have the advantage of high price, and those with brands are always more expensive than those without brands. On the other hand, brand products are less dependent on price reduction and promotion. In many cases, brand equity can support the stable maintenance of product prices at a higher level.

However, Aker emphasizes in his book that developing brand equity is a matter that needs slow efforts, and it is impossible to get immediate results. It needs huge budget support and needs to continue to invest after the initial investment. If you have to rely on brand equity to make a profit, I'm afraid you will have to wait until you continue to build a brand for a few years.

Moreover, in Ake, it is emphasized that the establishment of brand equity will generally face two enemies: promotional activities and short-term performance. Take the promotion activities. If enterprises reduce advertising, the short-term performance will hardly be affected, and the decline of brand equity is not obvious. However, the impact of promotion on sales is immediate. Whether it's soda or cars, sales can increase after a week of promotion.

Short-term performance pressure, many business leaders have a wrong thinking, they believe that the current performance directly determines the future development of enterprises. Therefore, it is imperative to achieve the best short-term performance. Moreover, for some leaders, short-term performance will be included in the assessment category, so short-term performance has become an important indicator to measure the development of enterprises, and brand assets have been forgotten.

The above part is an exposition of the "spiritual core of brand assets" proposed by Aker. Brand assets refer to assets that are associated with brand names and signs and can increase product value or service value for customers and enterprises.

Second, the four dimensions of brand equity to create value

Brand equity = brand loyalty x brand awareness x perceived quality x brand association

The first dimension is brand loyalty.

The so-called brand loyalty is an important parameter to measure whether customers are loyal to the brand, which reflects the possibility of customers turning to other brands. The higher the brand loyalty, the less customers are influenced by other competitive behaviors. In addition, brand loyalty can be directly converted into expected sales in the future.

Customer loyalty is usually the core element of brand equity. If customers are indifferent to the brand and only consider the function, price and convenience when buying products, and pay little attention to the brand name, then the brand can be said to have no assets.

However, if competitors' products are better in function, price and convenience, and customers still choose their favorite brands, then brands, brand names and slogans contain great value.

Specifically, brand loyalty has two main values. On the one hand, it can help enterprises reduce marketing costs, because if old customers feel comfortable and worry-free about familiar products and have nothing to be dissatisfied with, it is much lower to make old customers happy and reduce the cost of switching to other products than to find new customers.

And this old customer will become a free propagandist of the enterprise, which is much better than watching the advertisement several times.

On the other hand, brand loyalty can also give enterprises more say. For example, if you want to buy laundry detergent in a supermarket, brands such as Tide and Blue Moon can often occupy a more and more conspicuous position, because supermarket buyers know that these brands must be on the customer's shopping list. If you don't put it on, some customers will go directly to other supermarkets to buy it. Customer's brand loyalty has become the killer of brand enterprises.

The ideal state of brand loyalty is constancy. Customers with this loyalty have a sense of pride in the brand, and both the function of the brand and the identity expression brought by the brand are very important to them. For example, customers of Harley-Davidson motorcycles have set up their own Harley Club and even tattooed the Harley logo.

So, how to measure the brand loyalty of customers? That's buying behavior. Specifically, repurchase probability, purchase ratio, etc.

The second dimension is brand awareness.

Brand recognition refers to the ability of customers to recognize or think of a brand among many brands. For a brand, people often go through the process from uncertainty to ignorance when talking about a brand.

In life, customers will bring familiarity to customers because of well-known brands, which will lead to large-scale purchases.

On the other hand, brand awareness is often a symbol of an enterprise's strength, because even if customers don't know the specific situation of the brand and don't know much about the enterprise, when they face a well-known brand, they will naturally infer that the enterprise is strong because it can support their own brand with a lot of advertisements.

Sometimes, even if you buy a particularly expensive product that is difficult to make a decision, such as buying an expensive watch, if you still can't make a decision after repeated comparisons, you will often choose a well-known brand in the end.

It is worth noting that, unlike brand loyalty, popularity itself cannot create sales. For example, Nissan has adopted an abstract advertising scheme to promote Britain and finidi. There are birds, fields and lakes in the advertisements, but there are no cars. As soon as this unique advertisement came out, it caused great controversy. Customers immediately remembered the advertisements, and they also had associations with Britain and finidi that were different from other brands. However, the popularity of advertising failed to bring any benefits to Britain and finidi. After a few months on the market, car sales were not satisfactory. After reflection, people from Nissan admitted that advertisements did not give customers "reasons to buy" and that mere popularity could not solve the sales problem.

The third dimension is perceived quality.

Budweiser is familiar to many people and is now the largest beer brand in the United States. But in fact, for a long time, the number one position was actually Schlitz, and then Schlitz focused on a quality crisis. In order to reduce the cost of that year, Schlitz secretly changed the barley raw material for brewing beer into corn syrup, and as a result, the new beer was much lighter than the original one, causing consumers not to pay the bill.

What is perceived quality? The author said that the customer's feelings about a product or service relative to other similar products after knowing the specific use of the product or service are actually a subjective feeling about the product quality.

What is the value of perceived quality? The first is the reason for deciding whether to buy or not. At the same time, perceived quality can provide a high-priced basis for brands and make more customers willing to pay high prices.

Interestingly, although perceived quality mainly refers to the quality of products in terms of functions and services, Japanese automakers have invented a new concept of quality called "aesthetic quality". They think that defect-free manufacturing is a matter of course at present, and people's attention has shifted from high-performance cars to how to produce fascinating and exciting cars. If high-level aesthetic design, including appearance and interior, can be integrated into automobile production, automobiles can be changed.

The question is, does good product quality and service mean good perceived quality? Actually, it is not, because it is difficult to judge the quality without personal experience. Therefore, people will look for signals or indicators related to product quality to help them make judgments, and price is an important clue to judge quality. Chivas Regal's sales once struggled to death, and it didn't advance by leaps and bounds until it raised the price much higher than its competitors.

The fourth dimension is brand association.

What do you think of when you mention Apple, Nestle and LV? Starting from these brand names, people will have all kinds of associations. For example, when Apple is mentioned, people immediately think of Jobs and iPhone.

Brand association refers to everything related to brand in people's cognition. Brand association is a very subjective dimension, which can reflect a variety of contents. Coca-Cola, for example, can be associated with thirst quenching, youthful vitality and unhealthy life in summer.

Brand association is the basis of making purchase decisions and brand loyalty, which can help brands achieve differentiation. For example, perfume, refrigerator, TV and other product categories, most people simply can't distinguish various brands. At this time, brand association can help people distinguish different brands. For example: refrigerator, you can think of Haier smashing the refrigerator.

How to create a suitable brand association for a new brand? The author gives three tips: first, before positioning the product, make sure that the brand can promise and is consistent with the established association. Because if you don't do this, it will not only strengthen the brand, but also damage the brand assets, and customers will doubt the integrity of the company and even trigger a crisis of trust. Secondly, in order to accurately locate the brand, we should also understand what is the association of competitive brands, so as to develop a unique association different from competing products. After the launch of a new product, the most effective way to predict its success is to see if the product is different. Follow others' footsteps and imitate others, and you will never succeed. Finally, brand positioning should be combined with the situation of the target market, so as to give customers a convincing reason to buy. For example, Nongfu Spring is a little sweet.

When creating brand association, besides publicity and offline activities, there is also a more controversial method, that is, price reduction promotion. The common practice of many companies is to stimulate sales and blindly fight price wars, which will actually weaken the value of brands. In my opinion, as long as the method is proper, price reduction promotion can only increase brand equity. The key is to set a standard for promotion activities and limit any promotion activities that damage brand equity. For example, the second cup of KFC ice cream is half price.

In order to maintain brand association for a long time, it is necessary to ensure that the established association will not change easily, and to resolve various crises that the brand may face in time. Tylenol, a brand of cold medicine, was deliberately poisoned on the packaging box. After discovering this situation, the company recalled all products at the first time, and it was not until the tamper-proof packaging was redesigned and a lot of money was invested in publicity that Tylenol capsules were launched again, which successfully resolved the crisis.

Three, two management methods of brand equity

First of all, what does the brand expansion strategy mean? It is the same company that can design various brand series with different emphases. For example, after careful observation, the familiar brands of daily chemicals such as Tide and Pampers actually have the same owner, that is, Procter & Gamble in the United States. Applying the successful brand name in one product to other products is brand expansion.

Brand expansion has become the core strategy for many enterprises to achieve rapid expansion. General enterprises will not expand their brands in two ways. One is to apply brand names to new products, or to authorize brand names to other companies. The other is to acquire other companies, and then use the brand name to expand the brand in the acquired company, so as to achieve growth.

Although brand expansion seems to be a shortcut, it is not perfect. So how can we make full use of the original brand assets to expand and protect the old brands? There are two main considerations: first, when will brand expansion be useful? When the strong association of the original brand is to expand brand differences and advantages, and the expanded brand can strengthen the association of the original brand and improve its popularity, brand expansion can achieve the best effect; Secondly, when considering the first brand expansion, we should also consider the future growth point of the brand as a whole.

For example, the brand expansion of Vaseline Moisturizer found that the brand of Vaseline will make people have eight main associations, such as purity, body care and moisturizing. If Vaseline's next growth point is moisturizing, the products it can expand include soap, handrail cream and so on. However, if vaseline wants to expand its medicinal properties, it is necessary to consider disinfection ointment and first aid ointment. Obviously, the first choice of puffed products will solidify the association of vaseline in a certain aspect, and will also have an impact on the choice of subsequent puffed products.

Let's talk about the brand rejuvenation strategy. At that time, Yamaha piano in Japan was a heavyweight player in the industry, occupying 40% of the global market in its heyday, but it also declined later. At the critical moment, Yamaha developed a piano equipped with electronic control system, which not only has the wonderful timbre of traditional piano, but also has the automation function of electronic piano. After the launch, it was very popular, making Yamaha a leader again. This process of Yamaha is brand revival.

The author thinks that we can revive from these directions: increase the frequency of existing customers using products, that is, make the cake bigger; Explore and develop new brand functions and new usage scenarios to open new flowers for old trees; Help products enter new markets, improve products and replace them with new runways; Increase the functions and services of existing products, provide added value for customers and so on. These methods have their own unique perspectives, but if they are combined, the effect will be better.

To sum up, David Aker answered "brand equity is brand competitiveness", and he re-understood brand equity and how to manage it from a deeper and more specific dimension and from the perspective of customers. This book also clearly answers how to be a brand and how to accumulate brand assets.

Finally, we can draw the conclusion that:

Brand equity is the consumer's brand cognition that brings benefits to enterprises. Two advantages: one is to buy my products, and the other is to spread my good reputation. In enterprise management, no matter what you do, everything is based on whether assets are formed, whether assets are protected and increased. This is our brand equity view of western red strategic marketing.

We have also found the beacon and direction of enterprise management. Enterprises work for society, and enterprises also work for brands. Brand assets serve the brand and are the eternal sword to slay the dragon. In a sense, the mission of enterprise management is to solve problems for the society in the process of accumulating brand assets, thus creating value and obtaining profits.

If my article is useful to you, please forward it to your friends.

(End)

The author is the founder of western red strategic marketing.