Building Brand Value and Its Inpact on Customer Marketing

A successful brand is the most valuable resource a company has.

In fact, one authority speculates that brands are so valuable that many companies include a “statement of value” addendum to their balance sheets to include intangibles such as the value of their brands. Brands are used as external cues to taste, design, qualify, prestige, value and so forth. In other words, consumers associate the value of a product with the brand. For example, the value of Kodak, Sony, Coca-cola, Toyota and Microsoft is indisputable. One estimate of the value of Coca-cola, one of the world’s most valuable brand places it at over $35 billion.

How does a brand create value to the customer? Why do certain brands have more value than others? How does a brand’s value with customer increase its profits? The purpose of this paper is to review core literature to briefly define brand value and how customer-focused marketing increases brand value and ultimately profitability. The BIG Deal With Branding A brand is a distinguishing name and/or symbol intended to identity the goods or services of either one seller or a group of sellers, and to differentiate those goods or services from those of competitors (Aaker, 1991; Stanton, 1994, and Kotler, 1996).A brand thus signals to the customer the source of the product, and protects both the customer and the producer from competitors who would attempt to provide products that appear to be identical. Today, it is widely understood that brands play an imperative role in generating and sustaining the financial performance of branded businesses, such as McDonald’s, Coca-Cola, Mercedes, and Apple. With growing competition and saturation in virtually every industry, strong brands help companies communicate why their products and services are uniquely able to satisfy customer needs.

Aaker1995; Keller 1993). Since industries operate in an environment where the functional differences between products and services have been narrowed to the point of near invisibility by the adoption of total quality management a distinctive product image is most important. As products become more complex and the market place more crowded, consumers rely more on the products image or “branding” than its actual attributes in making purchase decisions.Therefore, branding provide the basis for establishing meaningful differences between competing offers which, in turn, has a significant effect on how the customer perceives a product and they associate certain attribute to the brand. As an example, two "unbranded" credit cards may deliver the exact same set of features in terms of fees structures, APR, acceptance, credit lines, and so on. As long as these two products remain unbranded, they will be undifferentiated and considered equivalent to the user.

However, if we label one card "American Express" and the other "Value Card,” most users will attribute additional, intrinsic-value to the American Express product. The two branded credit cards are no longer undifferentiated; one becomes more “preferred” than the other. The same concept applies to service industries such as telecommunications or hospitality, but the key question is why does the American Express product become “preferred” over the other product when they essentially perform the same function? The answer is simple—“brand value.Conceptualizing Brand Value The ability of a businesses, like American Express, to differentiate themselves from their competitors and cultivate this “added” or “intrinsic “value that customers attribute to their products or services becomes one the principles in which companies can begin to build brand value. Brand Value can be defined with consideration of various factors; one of those factors is customer benefit.

Customer benefit refers to the need that is satisfied by a product. For example, cavity control by toothpaste is a customer benefit.Customer benefit may be rational, psychological (emotional) benefit, or self- expressive benefit. A rational benefit is closely linked to a product’s attributes and would be part of a “rational” decision process. A psychological benefit relates to what feelings are engendered when buying and or using the brand (Aaker, 1991). An example of a rational benefit for a computer to a consumer would be its ability not to loose work whereas a psychological benefit would be the feeling of being professional.

For a car, the emotional benefit would be the feeling of safety when driving it as a driver of a Volvo car would testify. The self-expressive benefit relates to the ability of a brand to help a consumer to communicate his or her self-image. Since consumers have multiple roles, the consumer has an associated self-concept and a need to express that self-concept. The purchase and use of brands is one way to fulfill the need for self-expression (Aaker, 1991).

He gives the example of a consumer who may define him/herself as successful and powerful by driving a Mercedes Benz. Whichever the case, once a customer establishes rational for choosing a particular brand, the brand takes on value. Brand value can also be assessed based on the monetary premium or financial value attributed to the brand, apart from other tangible assets, that is the outcome of effectively establishing customers who are committed to a particular brand and are willing to pay extra for it (Jobber 2005).Brand value can be a collection of positive and negative aspects a brand adds to a business or organization. From this perspective, three of the most important aspects are: price premium, long-term loyalty and market share. What this means to a branded business is that the more consumers move from just being aware of their brand to choosing their brand to ultimately, insisting on their brand and recommending it to others, the more value their brand gains.

This “added” valued may put the business in a position to charge a premium price, to own substantial market share and to expect a certain amount of long-term customer loyalty. (Jobbers 2005) In other words, building brand value becomes a paramount function of increasing profits through utilizing methods that help find, make, keep and develop profitable customers-- otherwise known as” customer marketing. ” The value of a brand influences customer behavior, internal customer focus, and ultimately customer profitability.The additional benefits of understanding and building brand value as a customer marketing technique is that a business may see higher profits and ROI because of the high levels of customer support for the brand, which in turn, helps the company adequately allocate marketing and sales resources based on a realistic assessment of the potential of each of its customers and gain a clear understanding of important questions such as: * What are the intangible product attributes and image features that lead to consumer willingness to pay a premium price?* Who are the customers that are willing to pay that premium for my brand? Who are the customers that are willing to pay that premium for the competitive brand? * How do they differ from each other? * With regard to these attributes and features, how does my brand compare to the competition? Measuring & Building Brand Value Unfortunately, the measurement and management of brand value is not an easy task and is often seen as a major issue by marketers and marketing researchers, who are constantly trying to help the companies understand and appreciate the contribution brands make to the value of an organization or company.

According to a number of articles devoted to measuring brand equity, the task is daunting, partly because the concept of brand value or, as it is often called, “brand equity” goes well beyond the legal concept of a trademark or the accounting concept of goodwill. They argues that brand equity encompasses a gestalt of intrinsic values, or equities, that adds to the tangible, measurable benefits delivered by a particular product or service” (e. g.Aaker, 1991; Aaker, 1997; Keller 1993,1998; Aaker and Fournier 1995;). In the Journal of Marketing, K. L Keller writes that “these intrinsic equities may include such things as the image imparted to the purchaser, advertising quality, advertising quantity, trust, long term reputation for reliability, customer support, social responsibility, and other factors” (Keller 1993).

In fact, there are seven key factors use by marketing experts when building brand value.These factors include: quality, positioning, repositioning, communications, first-mover advantage, long-term perspective, and internal marking (Aaker, 1993; Keller 1999). A reputable blog by Dr. David Jobber on building brand value provides a brief explanation as to why these seven factors play key roles in establishing brand equity. * Quality is a vital part of a good brand, as it should highlight the core benefits and expectation of the customer.

For example, a branded appliance that constantly breaks or a training shoe that tears after a few wears will never build brand equity. * Positioning refers to the position a brand occupies in a market in the minds of the consumer. Strong brand have clear, and often unique position in a target market * Repositioning is needed when a brand tries to change its market position to reflect change in the consumer’s tastes. For example, it the original target market has matured and grown tired of the brand or has gone into decline. Communications is also an integral role in successful brand building. Once a brand has positioned itself to clearly reflect the customer’s perception of the brand, then all elements of the promotional mix has to develop, communicate, reinforce, and sustain customer perceptions.

* Securing a “first-mover” advantage is also important, as it refers to the brand being the first to create a clear position in the minds of the target customers before competitors enter the market. Long-term perspective refers to how well a brand can invest in itself over a long period of time even at the expense of short-term profitability. This means building customer awareness, communicating the brand’s message and creating customer loyalty. * Finally, internal marketing ensure that the entire company has adept understanding of the brand values and positioning; especially in service industries where brand value is the type and quality of service that customers receive.Conclusively, a branded business’ understanding of the importance of positioning their brand in a way the cultivates a customer-beneficial perception, measuring and building upon the brand’s perceived value in aforementioned areas, and effectively reinforcing that value with customer-driven marketing methods will be the stronghold on how their business can significantly increase profits, gain the advantage over competitors, and ensure the longevity of its products or services.