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BP501
Individual Written Assignment 2

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Abstract

Brand equity is a value premium that a
company may generate from its product with a recognizable name. This is the
value that a company derives from having a well-known brand. The concept of
brand equity is based on the notion that a company with a well-known brand is
likely to generate more money for the shareholders because customers are likely
to better identify with the brand. The long term success of a brand is not
based on the number of customers who purchase the product at once but on the
number of return customers. The companies that have been selected for this
assignment are Pirelli, Dr. Pepper, Sony, American Express and Samsung. From
the discussion it is seen that the companies are operating in different
industries meaning that they have different sources of brand equity. However,
the objective of brand equity is to ensure sustainable competitiveness of the
companies.

BP501
Individual Written Assignment 2

Introduction

            Brand
equity is a value premium that a company may generate from its product with a
recognizable name. This is the value that a company derives from having a
well-known brand. The concept of brand equity is based on the notion that a
company with a well-known brand is likely to generate more money for the
shareholders because customers are likely to better identify with the brand. The
long term success of a brand is not based on the number of customers who
purchase the product at once but on the number of return customers (Wood,
2000). From the above it is seen that bran equity is a perception that is
constructed in the minds of the customers. It is important to note that
different companies have different sources of brand equity which is dependent
on the industry in which the company is operating in (Rios & Riquelme,
2009). This paper will discuss the sources of brand equity for different
companies in different industries. The different industries that have been
selected for discussion include automobile tyre, carbonated soft drink,
consumer electronics, bank credit card and smartphone industries.

Automobile
tyre: Pirelli

            Pirelli is an automobile
tyre manufacturer that is listed on the Milan Stock Exchange. The company is
one of the largest tyre manufacturers in the world. The main competitors
include Bridgestone, Michelin, Goodyear and Continental. Pirelli has
manufacturing and distribution sites in different countries and regions of the
world (Pirelli, 2017).

            The
first source of brand equity for Pirelli is its association with Formula 1.
Formula 1 has acted as an activation which has helped in promoting the brand
image of the Pirelli brand generating a memorable experience to the customers
and ensuring that it gains acceptance among a large group of customers. Formula
1 has helped Pirelli gain acceptance among the North American and European
markets. In addition, with the increased embracement and popularity of Formula
1 in China, Japan and other Asian nations, Pirelli has gained acceptance among
the customers in these regions (Interbrand, 2017).

            The
other source of brand equity is innovation. Pirelli has a culture that
encourages innovation within its ranks. The history of innovation that the
company has developed gives Pirelli the brand recognition and legitimacy. This
legitimacy helps in ensuring that the company has relevance beyond the tyre
industry through which the company has achieved its mission and vision.
Innovation has helped in new product development. Most of the products developed
by the company have solved customers’ needs. One of the innovations is the
Connesso system, an innovation that has revolutionized the relationship between
the car and the driver. In this innovation, there are sensors and communication
systems which can help alert the driver when one of the tyres is not correct. Pirelli
has also been in the forefront in developing innovations in car manufacturing. These
innovations have helped in developing brand value and ensuring that customers
have something to think about the Pirelli brand. The quality of the innovated
products has helped in creating resonance and attachment with the products and
services developed by Pirelli (Saviolo & Marazza, 2012).

            The
third source of brand equity for Pirelli is promotion. Pirelli has marketed the
brand through different channels including radio, television, billboards,
internet and social media platforms. Pirelli has also been involved in product
promotions with the objective of improving the brand value. The marketing and
promotion activities have helped in developing product awareness and ensuring
that there are return and loyal customers of the Pirelli brand. Customers have
displayed resonance and loyalty by always purchasing the Pirelli brand. The
company also receives inquiries about the products and services meaning that
there is a relationship that the brand has formed with the customers.

            Customer
judgments represent the opinions, and evaluations that customers have about the
Pirelli brand. Pirelli’s product quality, design and premium value are some of
the values and evaluations that customers develop about the brand. The meaning
of this is that customers who express high judgments about the brand become
more loyal.

            Customer
feelings are reactions and emotional responses that customers make about the
brand. As has been mentioned, some of the feelings that have been developed
about the Pirelli brand include fun, warmth, excitement and approval.

            Brand
salience is the customer ability of linking the name and logo of the brand. The
Pirelli brand is easily recognizable and can be recalled in the consumer’s
mind. Pirelli has worked on maintaining strong brand awareness through
advertisements.

The brand equity pyramid is as shown below:

 

Carbonated
soft drink: Dr. Pepper

            Dr.
Pepper is an American soft drinks manufacturer that is based in Texas. Dr.
Pepper’s main competitors include Coca-Cola and Pepsi among other companies.
Some of the products manufactured by the company include Snapple, Dr. Pepper,
RC Cola and Schweppes among others. The company is headquartered in the United
States but has operations in other countries and regions of the world (Dr.
Pepper Snapple Group, 2017).

            The
first source of brand identity for Dr. Pepper is brand attribute. This is the
association and attachment that consumers develop with the brand. For Dr.
Pepper, the brand attribute that is associated with most of the products is the
great taste. The other attributes that are associated with the brand include
natural flavor, premium beverage, authentic, personal and fun. These few
attributes are shared by the many consumers of Dr. Pepper’s products (Aaker
& Biel, 2013).

            The
other source of brand equity is customer knowledge. It has not taken much time
for the customers to be aware of the different products and services of the
company. Customer knowledge is two-fold for the company. The first is customers
being aware of the products and services of the company. The second is the
company being aware of the needs of the customers. Dr. Pepper has invested in a
research and development center through which it gathers consumers’ views and
perceptions through market research. The understanding of consumer wants has
helped the company develop products and services that can meet the needs of the
consumers. Consumer knowledge therefore helps in improving brand equity for Dr.
Pepper.

            The
other source of brand equity is product differentiation. The beverage industry
that Dr. Pepper is operating in has faced increased concerns due to the
increased prevalence of diabetes and obesity among other lifestyle diseases.
Dr. Pepper has managed to differentiate itself in the market by developing
natural and healthy products unlike some of the competitors like Coca-Cola and
Pepsi. The slogan of the company is that the products are made from the best
stuff on earth help in developing customer attachment to the products.

            The
other source of brand equity is marketing activities. Dr. Pepper has relied on
celebrity endorsements such as Howard Stern. They have also directly involved
the American customers by inviting them to come and try a complementary Snapple
beverage. This has been coupled with efficient distribution systems and
high-level marketing that is designed to make Dr. Pepper the national brand in
the United States. Dr. Pepper has also performed product promotion through
tours which have been designed to create awareness of new products.

            Dr.
Pepper’s customers have displayed a high degree of resonance through the manner
in which they interact with the brand. This has helped in establishing brand
loyalty and ensuring that there are always return customers. Customers have
generally judged the product to be of high quality and have had a fun, warm and
excitement feeling of the brand (Pride & Ferrell, 2014).

The brand equity pyramid is as shown below:

Consumer
electronics: Sony

            Sony is a Japanese
multinational headquartered in Tokyo. The diversified product line of the
company includes business and consumer electronics, gaming and entertainment
and financial services. Sony is one of the largest consumer electronics
manufacturers in the world (Sony, 2017).

            The
first source of brand equity for Sony is brand image. Due to its strong image,
customers are able to recognize the Sony brand in different situations and environments.
This has helped customers build positive associations with the Sony brand.

            The
second source of brand equity is differentiation. Sony has managed to develop
products with different features but maintained a relatively low price for the
products. Sony also offers after-sales services to the customers. The product
features and their differentiation helps in ensuring that customers can
associate with the products.

            Sony
has also been able to achieve brand resonance due to the manner in which customers
have responded to marketing. The Sony brand has been able to achieve a sense of
oneness with the customers thereby helping in development of the strong Sony
brand. Through this, Sony has been able to retain and develop loyalty among the
customers (Martin Roll, 2015).

            Sony
has marketed the products as quality and entertaining products. Customers have
also realized a lot of value while using the products and this has helped in
improving authenticity and credibility of the products. As has been mentioned,
Sony has been able to deliver superior quality and value at relatively lower price
(Franzesn & Moriarty, 2015).

The brand equity pyramid is as shown below:

Bank
credit card: American Express

            American Express (Amex)
is an American financial services company that is headquartered in New York. Amex
is known mainly for credit card, traveler’s check and charge card (American
Express, 2017).

            The
first source of brand equity for American Express is the company sticking to
its core competencies. Some of the core competencies are risk management,
service leadership and attracting and retaining clients. Through this, Amex has
managed to attract and retain a loyal client base. There are strict and
efficient controls that have been enforced by the company to help prevent fraud
(ETB Brand Equity, 2017).

            American
Express has built a strong reputation as an affluent brand. The company targets
mainly the high-end market but controls a significant share of the market
segment. Amex has engaged in different marketing and consumer awareness
activities which have been desired to improve product awareness. The values of
the company have helped customers develop trust in the products and services
developed by the company. The company has become flexible in the card offerings
and through this it has been able to attract and retain different customer
segments.

The brand equity pyramid is as shown below:

Smartphone:
Samsung

            Samsung
is a South Korean multinational conglomerate that is headquartered in Seoul.
The company deals in different segments including consumer electronics,
entertainment and smartphones. It is one of the largest smartphone
manufacturers in the world. The company has operations in different regions and
countries of the world (Samsung, 2017).

            The
first source of brand equity for Samsung is product innovation. The company has
a research and development center from which it develops new products and
services. The continuous product development has helped attract and retain many
customers. In addition, the company is known for the quality of the products.
New product development has helped the company build a strong brand that
customers always want to associate with (Pride & Ferrell, 2014).

            Samsung
has managed to achieve brand resonance by the manner in which customers respond
to marketing. There are different successful marketing initiatives that have
been run by the company. These have helped in ensuring that customers easily
identify with the Samsung brand. Samsung has had a very swift communication strategy
that is backed by the use of social media that have helped develop the human
story in the smartphones. The compelling stories have helped the brand resonate
with many of the consumers in different parts of the world (Bapna, 2017).

The brand equity pyramid is as shown below:

 

References

Aaker, D.A., & Biel, A.L. (2013). Brand equity & advertising:
Advertising’s role in building strong brands. New York: Psychology Press.

American Express. (2017). Retrieved from https://www.americanexpress.com/

Bapna, A. (2017 January 25). Most trusted brands 2016: Here’s what
Samsung mobile got right. Retrieved from https://brandequity.economictimes.indiatimes.com/news/business-of-brands/most-trusted-brands-2016-heres-what-samsung-mobile-got-right/56761366

Dr. Pepper Snapple Group. (2017). Retrieved from
https://www.drpeppersnapplegroup.com/

ETB Brand Equity. (2017 October 03). American Express’ new brand campaign wants
you to realize its potential. Retrieved from https://brandequity.economictimes.indiatimes.com/news/advertising/american-express-new-brand-campaign-wants-you-to-realise-its-potential/60922288

Franzesn, G., & Moriarty, S.E. (2015). The science and art of branding. New
York: Routledge.

Interbrand. (2017). Making Pirelli more than a premium tire brand. Retrieved from http://interbrand.com/work/more-than-a-premium-tire-brand/

Martin Roll. (2015). Sony – The battle to stay relevant. Retrieved from https://martinroll.com/resources/articles/strategy/sony-battle-stay-relevant/

Pirelli. (2017). Retrieved from https://www.pirelli.com/global/en-ww/homepage

Pride, W.M., & Ferrell, O.C. (2014). Foundations of Marketing. New York:
Cengage Learning.

Rios, R.E., & Riquelme, H.E. (2009). Sources
of brand equity for online companies. Journal
of Research in Interactive Marketing, 4(3), 214-240. Doi: 10.1108/17505931011070587

Samsung. (2017). Retrieved from https://www.samsung.com/us/

Saviolo, S., & Marazza, A. (2012). Lifestyle brands: A guide to aspirational
marketing. New York: Springer.

Sony. (2017). Retrieved from https://www.sony.com/

Wood, L. (2000). Brands and brand equity:
definition and management. Management
Decision, 38(9), 662-669.