Discuss why the value of a brand is important and explain some of the issues associated with measuring brand equity - Essay Example

Discuss Why the Value of a Brand Is Important and Explain Some of the Issues Associated With Measuring Brand Equity Branding is such a critical element in the corporate world that many business organizations are spending billions of dollars just to build and maintain it. It an important aspect since it creates an incredible value for an organization as consumers fancy to be associated with premium brands in the market. There have been notable business takeovers and acquisitions in the corporate world all at enhancing existing business empires.

For instance, Bill Gates and Prince Al-Waleed bought Four Seasons Hotel Inc. not to acquire the beach front properties, restaurants or employees of the organization but they bought the brand that made the hotels recognizable in the hospitality industry. Relatively, when Kraft Foods Inc. made a $19.5 billion takeover of Cadbury they were less of interested in the chocolate, candy makers of the factories that the organization owned they mainly bought the brands that Cadbury had built over time.

Brand value is so elusive that it fetches more capital than real assets due to the impact that it creates or has on potential customers. Facebook was instantaneously transformed into a multi-billion company the moment it went public due to the brand that it had created. Nearly everybody in the world has a Facebook account; it is something that everybody knows and wants to relate to, thus making it more desirable to the masses and thus creating value for the particular brand. The value of a brand is important since it promotes the recognition of a business and its products to the people who end up being its potential customers since consumers often want to be associated with a particular brand in the market.

Moreover, a brand assists an organisation to stand out from the rest in a market environment. The modern business world is so competitive that firms have to come up with innovative techniques to survive. A good brand can thus help a company to stay afloat since it resonates well with the consumers more than the rest because the consumers have tried it and are satisfied with the business’ products and services. An elusive brand creates business referrals that are a plus to any organization.

A consumer that purchases a premium brand will often brag to his/her peers of the experience and suggest to them to try it since the experience was impressive. Therefore, this enables the business to increase its market share. Brand equity is the value that is accrued from various legal properties that are capable to influence the behaviour of consumers in the market and create a sense of security for an organization’s future revenues. The value of any brand is created from the market place since it is at this point that it is visible through the actions and words of the customers.

The manner in which customer think, act and even talk about a certain brand forms the basis of the value of a particular brand. Various concepts of measuring brand equity have been developed, but all these are founded on the premise of brand knowledge. The brand experience influences how customers react to changes in prices, products, and other activities in the marketplace that directly or indirectly relate to a particular brand. That notwithstanding, brand awareness is yet another issue that associated with brand equity measurement since it tends to depict the strength of a particular brand in the mindset of consumers.

Finally, brand image also plays a part in determining brand equity as it is concerned with the perception that consumers have about an individual brand based on the experiences and expectation they have after consuming it.