Yeh #Brand Kya Hain?

Continuing our journey on unpeeling what goes behind a brand, this time we dive deep into the remaining three Brand Asset Categories – Perceived Quality, Brand Association & Brand Loyalty.

Source: Building Strong Brands by David Aaker

Perceived Quality – Why is this important?

It drives financial performance – According to a study, a brand’s perceived quality or reputation commanded price premiums of 26% on average. Even when the actual brand quality is same across different brands in that category. This why giants like Apple & Samsung enjoy a lion’s share of profits in mobile handset category worldwide.

It is a key strategic variable – Many organizations include ‘quality’ in their mission statements. It is often the key positioning dimension that helps separate their brand from various product/functional classes of brand.

Offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy, and safety to satisfy all their desires and all their beauty needs in their infinite diversity. (L’Oréal mission statement)

It establishes Brand Goodness – This spreads over all elements of the brand like a thick syrup. May cover up for aspects that aren’t so great now, while elevating the best parts even higher.

Brand Association – What does it mean?

This refers to associations like product attributes, a celebrity, a mascot or a symbol that customer makes when they think of a brand.

Brand Association – How to get it right?

By driving Brand Identity effectively. This refers to what the organization want the brand to stand for, in minds of the customer.

Brand Loyalty – What does it take?

An often-underestimated Brand Asset, that holds the potential to drive target business sales consistently.

Say a market is divided into the following,

1. Non-Customers (doesn’t buy this class of product/ buys competitors)
2. Price Switchers (Price Sensitive)
3. Passive Loyal (Buys out of habit)
4. Fence Sitters (Indifferent between brands)
5. Committed (True to one brand)

Of this, the passive loyal & committed are the most neglected, across most markets & products. Although there is enough research that shows it is simply less costly to retain customers that to attract new ones.

Research found that reducing defections by 5% & generated 85% more profits in a bank. Another research shows 1 lost customer of a bank loyalty program cost the company atleast $2400 in lost future businesses.

We shall continue this journey with Brand Identity - how to create an identity that is clear, connect with the customer, how to manage it in a dynamic environment.