Brand Equity, Value, Quality, And Values

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Recommended: Growing and sustaining brand equity

According to Keller (2013), a brand comes in the form of a name, term, sign, symbol, or design or combination of these to distinguish goods and services of sellers from their competitors. Brand equity is defined in so many ways. Brand equity is known as the marketing outcomes that increase the product profitability with its brand name as compared to product that has no brand name (Anselmsson, Johansson, & Persson, 2007). The benefit of brand equity can be seen in the brand’s performance in market arena. One of the indicators in achieve brand equity is through enacting price premium. By measuring brand equity in preferences, quality, and satisfaction through price premium can provide strong power for firms and individuals. Price premium is measured based on the amount that consumers are willing to pay for a particular brand as compared to a non-brand product.

In this research, the importance of price of branding is taken into consideration. In the world of branded products, why is consumer willing to pay price premium for a particular product? Brand specific value is the reason a consumer is willing to pay extra (Buchanan and Gilles, 1990). Most of the time, a consumer that is more sensitive toward uncertainty of product quality available in the market. The uncertainty allows consumer to pay premium price to obtain a strong brand in order to avoid unwanted risk. For example, Rolex is often charged with price premium because it is famous for its performance and reliability (Rolex, 2014). A consumer is willing to pay higher price for a watch that has been established as a strong brand throughout the years of productions and good reviews from other consumers as compared to the risk of trying new brands that might not live up to t...

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...rgins because the brand extension is a part of the perceived attributes.

As a conclusion, understanding branding can give higher level of control over pricing and the demand for the product. Hence, the price of branding is a great way to increase the profitability of a company. The reluctance of consumer to take risk in buying a non familiar brand encourages consumer to pay a price premium to avoid the uncertainty. The positioning of a product forms an image that is used to enforce a premium price. There are various ways of branding where increase the price of branding can be obtained through the relationship between marketplace, the uniqueness of a product, and the quality and value of the product. The relationship formed between consumer and brand. When a brand is well-established, the ability to charge premium price for the branded products is an easier move.

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