host posted on October 12, 2009 13:19
Commentary By Teresa Vise
The North Jefferson News
As individuals, we often like to say that our strongest asset is our reputation. The same is true of organizations.
A product, and the company behind it, forms the brand. A brand that is recognized can go a long way toward making or breaking a company’s reputation.
A strong brand identity backed by superior quality offers important strategic advantages for a firm. First, it increases the likelihood that consumers will recognize the firm’s product or product line when they make purchase decisions. Second, a strong brand identity can contribute to buyers’ perceptions of product quality.
Branding can also reinforce customer loyalty and repeat purchases. A consumer who tries a brand and likes it will likely look for that brand on future store visits. All of these benefits contribute to a valuable form of competitive advantage called brand equity.
Brand equity refers to the added value that a certain brand name gives to a product. Brands with high brand equity confer financial advantages on a firm because they often command high market shares, and consumers pay less attention to product price. Got high equity? You probably also have higher profits and better stock returns.
Who were the top Global brands for 2009? According to Interbrand Corporation published in this week’s Business Week you will find Coca-cola, IBM, Microsoft, GE and Nokia as number one through five respectively. Coca-cola remains the most valued and highly recognized brand in the world.
In spite of the recession presenting marketers with the toughest challenges in several years, these companies retained their position from 2008. But, how do they pick the winner? It is way more than just name recognition.
A firm builds brand equity on four measurable dimensions of its brand personality. These four dimensions are Differentiation, Relevance, Esteem and Knowledge.
• Differentiation refers to a brands ability to stand apart from the competition. Brands like Porsche and Victoria’s Secret stand out in consumers’ minds as unique products.
• Relevance refers to a brands ability to be meaningful to a market segment. Brands like AT&T and Hallmark have high relevance.
• Esteem is a combination of perceived quality and consumer perceptions about popularity. Starbucks is a high esteem product.
• Knowledge refers to a customer’s awareness of the brand and understanding of what it stands for. Knowledge implies an intimate relationship with the brand such as Jell-O or Band-Aid.
Understanding how your product measures up against your competition in the areas of differentiation, relevance, esteem and knowledge will help you to understand how to meet your customer at a very high level. As we discussed last week, insuring that your product fits into the experience desired by your customer will help you to understand how to motivate that customer to act on a purchase.
Take some time this week to evaluate how your product measures up against similar offerings in your marketplace with respect to brand equity. While our businesses in the area may not be as large as Coca-cola or GE, they still bring serious brand equity to the competitive table.
How many of us steer out of the way to insure that we get the perfect doughnut from Fultondale Bakery? For the North Jefferson market segment, this business offers a product that is highly relevant to our community and offers a unique, high quality product.
I may not feel esteem after one of their pastries, but I sure feel good.
Remember to take care of your customers or someone else will.
Teresa Vise is the marketing, growth, events and special projects co-director for the Fultondale Chamber of Commerce. She received her MBA from Samford University and is a speciality sales professional with Sanofi Aventis. She can be reached at teresa.vise@sanofi-aventis.com.