Utilising Brand Equity in the Food Ingredients Industry Date Published: 30 Aug 2008 By Natalie WattThe term brand equity is one of the most overused and misused terms in marketing research. It has become a popular marketing "buzz word" to use, yet many people do not truly understand what it means. In fact, many people do not understand the concept of branding either. What is the Difference between Branding and Brand Equity? One needs to understand that a brand is not just a logo on a product, but rather the sum total of all that is known, thought, felt and perceived about a particular company, service or product. Branding is therefore the process of making products and companies into a brand. It is the consistent and disciplined way a company communicates the essence of a brand to key stakeholders . Thus, brand equity can be defined as a way to describe a brand and measure its total value. It is therefore the value that a consumer attaches to a certain brand. Benefits of Brand Equity There are many benefits associated with brand equity which are listed below: • Strong market share • Customer loyalty • More favourable response to price increases • Less vulnerability to competitor activity • Brand extension opportunities • Consistent communication messages which reach the consumer • Ensuring that a product is of an enduring nature • Improved profitability It is clear that building brand equity in any organisation is essential when the above benefits could be reaped. In order to build brand equity, it needs to be measured so that an organisation can establish how high or low its brand equity is. Measuring Brand Equity in a B2C Context Intangible factors of a brand can be measured using several criteria, which can be seen in chart 1. Chart 1: Criteria used to measure brand equity on a B2C market
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8/3/2019 Utilising Brand Equity in the Food Ingredients Industry
Utilising Brand Equity in the Food Ingredients Industry
Date Published: 30 Aug 2008
By Natalie Watt
The term brand equity is one of the most overused and misused terms in marketingresearch. It has become a popular marketing "buzz word" to use, yet many people donot truly understand what it means. In fact, many people do not understand theconcept of branding either.
What is the Difference between Branding and Brand Equity?
One needs to understand that a brand is not just a logo on a product, but rather thesum total of all that is known, thought, felt and perceived about a particularcompany, service or product. Branding is therefore the process of making productsand companies into a brand. It is the consistent and disciplined way a companycommunicates the essence of a brand to key stakeholders. Thus, brand equity can bedefined as a way to describe a brand and measure its total value. It is therefore thevalue that a consumer attaches to a certain brand.
Benefits of Brand Equity
There are many benefits associated with brand equity which are listed below:
• Strong market share
• Customer loyalty
• More favourable response to price increases
• Less vulnerability to competitor activity
• Brand extension opportunities
• Consistent communication messages which reach the consumer
• Ensuring that a product is of an enduring nature
• Improved profitability
It is clear that building brand equity in any organisation is essential when the abovebenefits could be reaped. In order to build brand equity, it needs to be measured sothat an organisation can establish how high or low its brand equity is.
Measuring Brand Equity in a B2C Context
Intangible factors of a brand can be measured using several criteria, which can beseen in chart 1.
Chart 1: Criteria used to measure brand equity on a B2C market
8/3/2019 Utilising Brand Equity in the Food Ingredients Industry
The above factors are regarded as important for measuring brand equity in a B2C
(business-to-consumer) market with end users, and were developed by David Aaker.With regards to the food ingredients industry, brand equity needs to be measured ina B2B (business-to-business) context. Rosenbroijer (2001) believes that theimportance of branding in industrial contexts has increased. However, according toKuhn & Alpert (2008), a sufficient base for a comprehensive model of B2B brandingdoes not yet exist. The nature and importance of branding in industrial markets (B2B)is under-researched.
According to Keller, (1993), brand equity is the effect that brand knowledge has onconsumer responses to the marketing of a brand, with the effect occurring when thebrand is known and when the consumer possesses favourable, strong and uniquebrand associations. Keller developed the Customer-Based Brand Equity Model (CBBE),which identifies four steps which refer to questions asked by customers. This is
represented by a 'branding ladder' with each step 'up' being dependent on achievingthe previous one (Keller, 2001). These steps consist of six brand building blocks(Keller, 1993). To build a strong brand according to Keller, the aim is to reach the topof the pyramid where a harmonious relationship exists with customers, as seen inchart 2.
Chart 2: Customer-based Brand Equity Model by Keller (CBBE)
8/3/2019 Utilising Brand Equity in the Food Ingredients Industry
o Brand Slogans created confusion instead of enhancing brand
awareness which should aid the formation of positive brandassociations
2. Personality traits, values or associations related to history, heritage orexperiences seem inappropriate for measuring brand equity (on a B2B basis)
3. Respondents in the survey knew exactly what their "competitors" were doingand buying despite the fact that they could not recall the brand names thatthey themselves were using. They had the ability to recall brands that werebeing used by competitors.
o This shows the importance of customer referrals & experience of other
users in a B2B environment
o Monitoring others could be a mechanism for decreasing risk
4. The overall credibility of a company emerged as an important element
5. Purchasing involvement in B2B markets are greater than in B2C
o Organisational buyers care little about product slogans OR brand
names, but care more about the company name and its offering
o The purchase process is more rational than emotional
o Purchasing a product that "will do the job"
o Spoke about "relationships" with company representatives rather than
products
o Terms of contracts play a major role in switching to other brands
6. Reasons for purchasing:
o Product functionality
o Tangible product performance
The results from this case study represent context-specific factors, which are notrepresentative of all industrial markets. The food industry is very different from theICT industry, but there are certainly parallels with the situation in the food industrywhich can be drawn using the above case study.
Brand Equity in a B2B Context in the Food Ingredients Industry
Brand equity is affected by a number of factors, which are shown in chart 3.
Chart 3: Factors affecting brand equity in the food ingredients industry
8/3/2019 Utilising Brand Equity in the Food Ingredients Industry
Building a winning brand means understanding the relationship between brandequity and market share. Often only the market share of a brand is looked at as ameans of determining how successful the brand is. However, one needs to leverageboth brand equity and market share to their full potential. In so doing, a brand will besuccessful and sustainable in the long term. It is important to remember that anincreasing market share does not correspond to an increase in brand equity, whereasan increase in brand equity invariably leads to an increased market share. Chart 4
shows the relationship between brand equity and market share.
Chart 4: Relationship between brand equity and market share (A.C. Neilsen,2005)
8/3/2019 Utilising Brand Equity in the Food Ingredients Industry
Brand equity can almost certainly be utilised in the food ingredients industry, whichwill lead to the creation of winning brands that will grow both revenues and marketshare.
Chart 5 shows how brand equity can be measured for food ingredient manufacturers.
Chart 5: Criteria which may be adopted in the measurement of brand equityby food ingredient manufacturers, and the expected results of brand equitymeasurement
