Factors influencing value of brand

08/10/2022 0 By indiafreenotes

Branding is a recently emerged marketing strategy where the focus is on building a corporate brand instead of just a product brand. Branding strategy, however, is usually developed by the CEO and higher management of an organization. It’s above the pay grade of the marketing staff because it involves the whole image of the corporate brand.

A brand is just limited to the name, logo or design of the company; brand equity goes much deeper than the surface and monetary value of a company. It’s the promising and emotional value of your company perceived by the people.

Brand equity is the perceived value of a customer based on their attachment, memories and emotional experience with the brand.

Brand value, on the other hand, is the calculation of brand in monetary terms; or the worth of brand in the market.

Brand equity shows you the success of a brand because more people would talk about it. The brand value will provide you the actual finances, sale value of the brand in the market.

Factors determining brand equity are as follows:

  1. Brand loyalty
  2. Brand awareness
  3. Perceived quality
  4. Brand associations in addition to perceived quality
  5. Other proprietary brand assets such as patents, trademarks and channel relationships.


  1. Brand Loyalty:

Brand loyalty central construct in marketing, is a measure of the attachment that a customer has to a brand. It reflects how likely a customer will switch to another brand, especially when that brand makes a change, either in price or in product features. As brand loyalty increases, the vulnerability of the cus­tomer base to competitive action is reduced.

  1. Brand Awareness:

People will often buy a familiar brand because they are comfortable with the brand. Or there may be an assumption that a brand that is familiar is probably reliable, in business to stay, and of reasonable quality. A recognized brand will thus often be selected over an unknown brand. The awareness factor is particularly important in contexts in which the brand must first enter the consideration set. It must be one of the brands that are evaluated.

  1. Perceived Quality:

A brand will have associated with it a perception of overall quality not necessarily based on the knowl­edge of detailed specifications. Perceived quality will directly influence purchase decisions and brand loyalty, especially when a buyer is not motivated or able to conduct a detailed analysis.

It can also sup­port a premium price which, in turn, can create gross margin that can be reinvested in brand equity. Fur­ther, perceived quality can be the basis for a brand extension. If a brand is well regarded in one context, the assumption will be that it has high quality in a related context.

  1. Brand Association:

The underlying value of a brand name is often based on specific associations linked to it. Associations such as Ronald McDonald can create a positive attitude or feeling that can become linked to a brand such as McDonald’s. If a brand is well positioned on a key attribute in the product class (such as service backup or technological superiority), competitors will find it hard to attack.

  1. Other Proprietary Brand Assets:

The last three brand equity categories we have just discussed represent customers’ perceptions and reactions to the brand; the first is the loyalty of the customer and the fifth category represents other proprietary brand assets such as patents, trademarks and channel relationships. Brand assets will be most valuable if they inhibit or prevent competitors from eroding a customer base and loyalty.

These assets can take several forms. For example, a trademark will protect brand equity from competitors who might want to confuse customers by using a similar name, symbol, or package. A patent, if strong and relevant to customer choice, can prevent direct competition. A distribution channel can be controlled by a brand because of a history of brand performance.