How Marketing Communications Influence Brand Equity

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Brand Equity

Brand equity is generally defined as the strength or value of a product that quantifies its value (Madhavaram, Badrinarayanan & McDonald 2005). This value is created by the effectiveness of the marketing communications implemented. It can also be stated as the impact of a brand’s knowledge structures on consumers’ response to the product marketing tools or activities. It is an integral function of consumers’ choices in the competitive market (Washburn & Plank 2002). This concept surfaces when choices on products or services are made in the market by consumers. A consumer will tend to choose a familiar brand because of some favorable strong and distinctive associations with the brand (Yoo, Donthu & Lee 2000). In defining brand equity extensively, it is imperative to consider five categories of brand knowledge assets associated with a brand’s symbol or name that adds value to the offered product or service. The five aspects of brand equity are: brand associations, brand awareness, brand perceived quality, brand loyalty and other proprietary assets such as trademarks and patents (Washburn & Plank 2002). Washburn & Plank (2002), highlighted these structures as the primary bases for measuring brand equity. There have been different viewpoints regarding brand equity alongside marketing communications, but most scholars and marketing researchers favor the consumer-oriented perspective. The other contested viewpoint is the financial accounting perspective.

Financial Perspective of Brand Equity and Marketing Communications

In the financial perspective, brand equity is dealt with in terms of asset valuation for a company’s balance sheet. The other purpose of asset valuation includes acquisition, divestiture and mergers. In this context, brand equity is studied because is assists in improving marketing productivity. Because of extreme competition, flattening demand and higher costs, firms emphasize on the efficiency of their marketing expenses. That is, the focus is on minimizing the cost of marketing communications. However, the process of minimizing this expense should not compromise brand equity. Consequently, marketers are forced to understand consumer consumption patterns in order to enhance the decision making process, and the strategic positioning of their offerings. According to Lynch (2008), one of the organization’s core competencies is the background knowledge created about how consumers perceive their brands from its investment in past marketing communications. The financial perspective relies on the created underlying value of a brand or the approaches exploited by the management in the process of establishing profitable brand strategies (Keller 2003).

Customer-Based Brand Equity (The marketing Perspective) and Marketing Communications

The underlying logic in this viewpoint is that the power of a brand rests in the minds of the consumers as well as what they have experienced about the subject brand over time (Egan 2007). A good example in this context would be ‘Apple’ and ‘Google’. These brands have become synonymous with entertainment and search engine minds of customers. A strong brand is that which is able to create unity with its consumers (Kimmel 2005). Organizations tend to benefit a lot, especially in terms of loyalty given that consumers tend to stick to such products irrespective of their prices. Apple has managed to develop a stronger brand in the American market through its extensive marketing communications. Such consumers become brand ambassadors. Furthermore, they tend to recommend the usage of products to family members and friends. Eventually, consumer-based brand equity is created. The key advantage of dealing with brand equity in a customer-centric dimension is that it enables the management to consider precisely how their marketing communications should improve the value of the brand. At the locus of establishing brand equity is marketing communications. Marketing communications can stimulate the growth of brand awareness and facilitate the creation of the right brand image. Marketing tools can be designed around pricing, products and distribution channels (Kimmel 2005).

Based on the logic that brand equity lies in the mind of the customers, conviction has to be integrated in the marketing communication strategy so that it can permanently reside in consumers’ minds (Washburn & Plank 2002). Central to this approach is the creation of a strong relationship between the customers’ needs and the offered product. This creates a notion that the offered brand is superior in the market, and this can be achieved through brand image and awareness components. In addition, this relationship can be cemented by creating integrity, quality, reliability and brand performance at initial points of purchase. Further, the brand can be imprinted in customers’ minds by warranty, quality customer service and innovative packaging. All these approaches sum up to form Integrated Marketing Communications.

As much as the desired goal for marketing communications is to increase sales, it is essential to identify the knowledge structures of the promoted brand so that consumers can respond favorably to the chosen marketing tools for the brand. For example, it is essential to establish the level of technology literacy and accessibility to the technology among the audience so as to promote a brand over the internet (Fill 2011). This would ensure that consumers respond favorably at a minimal cost. Brand knowledge structures are essential in evolution of brand equity. They include brand image and brand awareness. In this context, brand image refers to the visuals, style and logo with which the promoted brand is associated with. On the other hand, brand awareness is simply the ability of a consumer to recognize and recall a brand in any given environment. This is created by the brand strength which is directly linked to the efficiency of marketing communications (Keller 2001).

It is useful to conceptualize brand equity from a consumer’s perspective because it highlights both specific guidelines for marketing communications and tactics, and the strategic operational areas where research can be essential in assisting strategic decision making. One of the aspects about this perspective is that marketers must take a broader view of the marketing communications for a specific brand (Keller 2003). They should also consider the various influences it has on the the brand knowledge structures and how the transformations in the brand knowledge affects a traditional outcome like sales. The second aspect is that marketers must recognize that the long-term success of the future marketing communications