Steps to Build Brand Equity
Does your brand have strong equity?
According to Emily Mescher, vice president of consumer insights for Nielsen, brands with strong equity do the following to build share:
- Face less stock market volatility.
- Increase margins and command a price premium.
- Notch higher market shares and sales.
- Are more difficult to compete with.
- Enable brand extensions and have greater customer loyalty.
“Brand equity is stored in and referenced from the consumers’ minds and hearts, developed over time through many brand impressions and interactions,” Mescher said during the webinar “Connecting Sentiment and Sales: Activating Brand Equity to Boost Your Business.”
CPG companies and, by extension, their retail partners need to understand the power of brand equity and the correlation between equity and sales, and work to “build a road map to grow with key consumer segments based on both their attitudes and actual purchasing of your brand.”
Mescher described the four segments of category buyers this way:
- Tenuous shopper: Buyer of a brand with weak brand equity.
- Bonded shopper: Buyer of a brand with strong brand equity.
- Reluctant shopper: Nonbuyer of a brand with weak brand equity.
- Attracted shopper: Nonbuyer of a brand with strong brand equity.
Reluctant shoppers are seeking a higher premium product from the weak brand, perhaps with better ingredients, Mescher said. The attracted shopper probably would buy the brand if “physical barriers” were removed. This could mean there is limited product distribution, or price and promotional efforts lacked the muscle of core brands.
Mescher said brands can enhance brand equity in three ways: increase the number of buyers, increase the number of trips or increase volume purchases per trip, the latter of which can be done through two-for-one specials, bonus packs and deals.