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Customer Brand Equity in Marketing

In the face of changing business dynamics, increasing competition, changing communication orientations as well as the changing consumer behaviors, the contemporary business organizations have come to realize the great significance of brand awareness, strong brand associations, perceived quality and personality. The cumulative summation of all these aspects is the attempt to create a customer brand value, implications of which lead to brand equity. According to Keller (2003), brand equity can be defined as the differential outcome that the brand knowledge influences the consumer’s response resulting from a company’s marketing of a brand. Brand equity is valued as either an asset or a liability depending on the value added or subtracted by a company’s product satisfaction to its customers (Aaker, 1991 as cited in Dahlen, Fredrik and Smith, 2010). Creation and sustenance of strong brand equity remain the most crucial corporate strategy in enhancing differentiation of a company’s product from a plethora of available choices. This article, therefore, seeks to assess the brand equity model in marketing using Apple Inc. as a point of reference in illuminating how best to realize customer brand equity.

According to Ailawadi, Lehmann, and Neslin (2003), brand equity refers to the differential outcomes from a brand’s name relative to the outcomes from product without the brand name. Keller (2003) further extrapolated on the concept of brand equity by providing three basic principles under which a company’s brand equity can be assessed. The principles include; the mindset of the customer, the product market and finally the financial market. The mindset of the customer is a principle that assesses the strengths, as well as the weaknesses of the brand. The product principal assess the potential of the product in the marketing resulting from the marketing activities. Finally, the financial markets principal assess both the current as well as the future brand potential on the basis of future value estimates (Stahl, Heitmann, Lehmann & Neslin, 2012).

According to Gregory (2001), the brand of a company represents the most critical assets of any business organization. This notion is supported by the fact that brand equity is usually equated to a value whose financial implications transcend physical assets linked to its provision. Brand equity is driven by the brand name in the relation to the customers. As such, the brand knowledge forms a very key component in the creation of customer-based brand equity. The customer-based brand equity, therefore, has both the aspects of brand awareness as well as brand Image. Whereas a brand image denote the a number of associations in the mindset of consumers, brand awareness can thus be defined as the ability of a consumer to remember and distinguish a brand as well as link it to brand’s logo, name and symbol (Keller, 2003).

Apple Inc. and Customer-Based Brand Equity

According to the Forbes magazine, Apple Inc. is considered the company with the highest global ranking in relation to brand value. O’Reilly (2014) from the Business Insider indicates that the Apple has successfully managed to retain it number one ranking in the brand value index as a result of its complimentary products and services whose main priority is to make the consumer’s life better and much easier on a daily basis. Apple has a range of products and therefore, their brand equity heavily relies on their classification. Apple’s products can be classified into three diverse categories, the computer market, the electronic market and the mobile phone market. In the computer market, Apple deals with Macintosh computers and accessories as well as the Mac OS Software. In the electronic market the company deal in MP3 and MP4 distribution via iTunes. Finally, the mobile phone market provides iPhone mobile phones and iPad tablets as well as mobile solutions. According to the Business Insider, the estimated brand value of Apple Inc. in 2014 is estimated to be 118.8 billion US dollars, a figure that represents a 21% increase in the previous year’s value (O’Reilly, 2014).

Keller`s Customer Brand Equity Model in relation to Apple’s Brand

Keller (2001) indicates that there are four major building blocks in the successful creation of customer-based brand equity. These building blocks include; a company’s brand identity, a company’s brand meaning, a company’s brand responses as well as a company’s relationships. The building blocks from Keller’s (2001) analogy on customer-based brand equity also reflects a process that identifies who the company is, provides brand meaning as to what the company is, influences what the consumer feel about the company as well the relationship between the company and the consumer. In this regard, the Apple’s brand strategy will analyzed with respect to the four customer based brand equity (CBBE) model in attempt to highlight the successes as well as provide recommendations for dealing with certain brand equity flaws.

Brand Identity

Keller (2001) indicates that the first process of building successful brand equity involves the creation of a brand identity by creating a brand awareness/salience. According to Van der Lans, Pieters and Wedel (2008), brand salience refers to the degree to which a company’s brand manages to stand out from all the competitive brands. Keller asserts that brand salience goes the beyond the ability of a consumer to remember a brand easily or remember the logo of the brand. Brand salience is all about the ability of a customer to relate a brand with his/her needs thus being a very key component in purchasing decisions.

According to Keller’s CBBE model, brand salience has two dimensions; brand depth and the brand breadth. The brand depth refers to how easy the customer can recall a brand whereas the brand breadth refers to the number of consumption circumstance under which the brand comes into mind. Therefore, a salient brand is one that the consumer remembers easily and successfully associates it with his/her specific need.

Apple Inc. has managed to achieve brand salience through a number of ways. One of the unique aspects of all Apple products is the design and the bitten apple logo. Apple has an organizational culture that is centered on innovation, design, and creativity. Apple products are easy to recognize even when the brand’s famous logo is hidden. The brand comes into mind anytime quality, innovative and high-end experience need suffice among customers from all over the world. From high technology to music and high tech computers and mobile phones, Apple remains the most preferred brand. The brand evokes quality, attractive and creativity in design among the mindset of consumers, an aspect that serves as a unique selling proposition for Apple products.

Further, Apple as a company has managed to attain brand salience through market segmentation. The company’s market manufactures products for the high-end consumer who have a peculiar taste in unique designs, as well as superior quality technological products. Whereas the segmentation targets a high-end market, the company, through the iPod provides a wide range of consumers with the brand’s experience by introducing affordable mp3 players. The iPad remain as the ultimate brand in terms of tablet. To this end, Apple as a brand has managed to outdo most of its competitors by remaining the most salient product in the technological market though subject to affordability.

 

 

Brand meaning

Keller describes brand meaning as the brand’s communication to the consumer on what it stands for or what and the image it creates in the minds of the consumer. As such, brand meaning comprises of two major aspects; the brand performance and brand imagery. The brand performance describes the extent to which a company’s product satisfies the needs and expectations of a customer. According to Keller’s CBBE model, there are five features of a brand’s performance; the primary and secondary features; durability, reliability and serviceability; efficiency, service efficiency, effectiveness and empathy; design and style and finally the price (Keller, 2001). Brand performance, therefore, surpasses the unique makeup of a product to include the experience resulting from the augmentation of the different aspect of the product.

To this end, Apple has managed to win over technology enthusiasts and consumers in equal measure. The design of Apple computers, mobile phones, mp3’s, tablets and operating systems is made in a manner that does not only satisfy the specific usage needs but also leaves the user with an excellent experience. Apple products are durable, reliable, fast, easy to maintain and use as well as serviceability. Apple products are commonly viewed as the best quality products in their respective markets. The design of the products is not just attractive but also customized for ease of usage.

Imagery on the other hand refers to the extent to which a company’s brand satisfies the consumer’s psychological and social needs. Apple products especially the high-end PC’s, tablets and mobile phones are all associated with a unique touch of class, mostly linked with success and creativity. Apple has managed to achieve brand imagery through its uniqueness and the target marketing. Whereas Apple’s product promotion globally promises a good ‘iLife’ experience, the brand goes the full extent in satisfaction of the need for quality thus delivering on its promise. This is probably the biggest competitive edge considering that the touch of class is mostly spread through word of mouth.

Brand Responses

A brand response refers to the way the customer feels or reacts to the marketing activities, to the brand as well as other information sources (Keller, 2001). Brand response is a function of brand feeling and brand judgments. The aspect of a brand’s judgment is based on the customer’s response to the brand’s quality, credibility, superiority and brand consideration. A brand judgment, therefore, relates to how the customer responds to the brand imagery and brand performance. On the other hand, the brand feeling refers to the consumer’s reactions as well as emotional responses to the product. Keller describes six components of brand feeling. These components relate to warmth, fun excitement, security, social approval and finally self-respect. Keller (2001) asserts that the brand response can only be favorable if the responses are positive.

With regards to Apple, this is one area that is quite sensitive considering the company’s market differentiation targets the high-end market. Where much is paid for much is likewise expected. As such, the company’s touch of class and the promise of nothing less of quality has received mixed responses. Most of the responses from consumers have been very positive and aspect that has further strengthened the brand equity of the company. It is from the wide and global positive response from users that the brand has managed to achieve a top tier position in terms of brand.

Even though the brand positive response for the Apple brand remains higher than those of competitors, the positivity has reduced and continues to reduce. According to Travlos (2013), the company online satisfaction dropped to its lowest in 2013 to stand at 80%. The negative responses on the iPhone 4 antennae issues, for instance, are one example of negative response. In order to avoid such cases, Apple must ensure that highly quality and thoroughly tested products are released to the market (Snell, 2011). Further, Apple must increase it efforts and commitment towards customer service and support.

Brand Relationships/Resonance

Keller (2001) describe a brand resonance as the form of relationship that the consumer of a product develops with the brand and how he/she feels that the products offering are in sync with the needs and expectations. The aspect of brand resonance is based on the psychological bonds the consumer forms with the product and the resulting engagements such as repeat purchases (Keller, 2001). The brand relationship further includes behavioral loyalty, attitudinal attachment, sense of community and finally active engagement.

Apple as a brand has a very high resonance as the consumers of the brand relate to it quite intimately, strongly attached to it due to its uniqueness (Drypen, 2011). Further to this, Apple as a brand has creates a feeling that their consumers are in sync with the emerging trends and most of them consider the product as most favorable (Drypen, 2011). Most consumers of the brand have had repeat purchase from the wide range of products. The Apple brand has established a strong attitudinal attachment from the experience. However, the brand relationships are weakening an aspect evident from the reducing brand loyalty. According to Travlos (2013), the brand loyalty of Apple reduced from 93% to 88% between 2012 and 2013. While Apple’s brand relationship remains strongest, the need to tighten the brand resonance is very important. This can be achieved through personalized and very efficient customer support that addresses the concerns of consumers accurately, timely and warmly.

References

Ailawadi, Kusum L., Donald R. Lehmann, and Scott A. Neslin (2003). Revenue Premium as an Outcome Measure of Brand Equity. Journal of Marketing.

Dahleln, M., Lange, F. and Smith, T. (2010). Marketing communications. Chichester, U.K.: Wiley.

Drypen, (2011). Brand Resonance “ How Brand Apple has it. [online] drypen.in. Available at: http://www.drypen.in/branding/brand-resonance-how-brand-apple-has-it.html [Accessed 10 Mar. 2015].

Gregory, R. (2001). The Bottom-Line Impact of Corporate Brand Investments: An Analytical Perspective of the Drivers of ROI of Corporate Brand Communications. Journal of Brand Management. Vol 8. No 6. pp. 405-16.

Keller, K. (2001). Building brand customer-based brand equity: a blueprint for creating strong brands, Marketing Science Institute Report No. 01-107

Keller, K. (2003). Strategic Brand Management: Building, Measuring, and Managing Brand Equity 2nd edition, Upper Saddle River, N.J: Prentice-Hall.

O’Reilly, L. (2014). The 20 Most Valuable Brands In The World. [online] Business Insider. Available at: http://www.businessinsider.com/apple-most-valuable-brand-on-interbrand-2014-rankings-2014-10 [Accessed 10 Mar. 2015].

Snell, J. (2011). Apple’s unique brand of crisis management. [online] Macworld. Available at: http://www.macworld.com/article/1159548/apple_crisis_management.html [Accessed 10 Mar. 2015].

Stahl, F, Heitmann, M, Lehmann, D, & Neslin, S (2012). The Impact of Brand Equity on Customer Acquisition, Retention, and Profit Margin. Journal Of Marketing, 76, 4, pp. 44-63, Business Source Complete.

Travlos, D. (2013). Is Apple Losing Its Brand Equity?. Forbes Magazine. [online] Available at: http://www.forbes.com/sites/darcytravlos/2013/01/19/is-apple-losing-its-brand-equity/ [Accessed 10 Mar. 2015].

Van der Lans, R, Pieters, R, & Wedel, M (2008). Competitive Brand Salience: Marketing Science, 27, 5, pp. 922-931. Business Source Complete.

 

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Originally posted 2017-08-11 19:24:26.

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