Parents buy toys from brands they trust.
Brand equity is the term marketers use to describe the value added by image, personality and other intangible elements to a product's basic functions and features. To be effective, it should be based on customers' characteristics and purchasing behaviors. Strong brand equity can boost competitiveness and help support a premium price.
Consumer Characteristics
Customer-based brand equity must arise from an understanding of the target market. The members of this consumer group are highly likely to choose the firm's products over alternatives because of their demographics or lifestyles. Demographics include characteristics like age, gender, income and occupation. Lifestyles reflect people's interests, attitudes and how they spend their time and money. For example, the brand equity in a designer dress label would primarily appeal to affluent, professional women who enjoy socializing with their peers.
Purchasing Behaviors
The value added by brand equity may also arise from the purchasing behaviors of target consumers, like usage rates or benefits sought from a product. Beer is one categories in which brands chosen by heavy users typically have images and personalities different from those bought by light users. For products like toothpaste, brand equity is built on specific benefits like taste or cavity protection. For example, a child-oriented brand featuring candy flavors would appeal to parents of young children.
Effect on Competitiveness
In some of the largest product categories, most alternatives are functionally identical. For example, the majority of antiperspirants use the same chemicals to keep users dry. But customer-based brand equity enables marketers to set their product apart from competitors. While any shampoo can clean hair, teen buyers are likely to choose a brand endorsed by a pop singer and associated with youth culture. Products like toys are more competitive when parents place trust in their brands.
Effect on Price
Consumers will often pay a premium price for brand equity, even if they do not get better performance or other features. This is particularly common for luxury, prestige brands in categories like jewelry and fashion. A shoe brand like Jimmy Choo, for example, commands a higher price than competitors not because of fit or durability but largely based on an image of exclusivity. Also, strong brand equity deters buyers from switching to a cheaper alternative.
Tags: brand equity, arise from, likely choose, premium price, purchasing behaviors