Consumer perceptions extensively influence and manipulate their purchasing behavior. Service and goods companies identify the significance of marketing strategies in influencing consumer behavior. All brands that attract high profits have desirable loyalty levels among customers. Customers tend to have a high level of perception of quality of goods and services that dominate markets in different industries. The power that emanates from consumers' goodwill and recognition of a brand, earned overtime, and which gives a brand better competition ground than other similar brands in the market is the brand equity. It refers to the desired differential effect gained from consumers' response because of a strong brand name.
Examples of branded hotels
Independent hotels have a low market share compared to branded hotels. Several branded hotels extensively dominate the market because of their strong brand equity. The Starwood hotel is remarkable for its high performance luxury brands. St. Regis is one of the best performing brands of Starwood. The Luxury collection and W. are also similar brands of the Starwood with international market dominance. The Sheraton and Westin are brands of Starwood hotel that have an exceptional customer preference. The W. hotel segment of the Starwood hotel launched another brand, Aloft. Element, another brand of the Starwood hotel has a wide customer awareness level in the market. Besides Starwood, there are several other branded hotels. The InterContinental Hotels group also has several brands operating in different places. Choice Hotels have diverse brands, as well. Most branded hotels focus on brand extensions maintain their market share in the industry.
The concept of brand equity
Strong brand equity depicts a measure of high potential and actual value based on the apparent positioning of the brand in the market. It is also a source of assurance of sustained revenue generation from the brand and other benefits. Value accumulated from the benefits that emanate from a perfect brand perception by consumers is the brand equity. According to Isabel, Leslie and Martinez, 2008, services and goods with strong brand equity have the advantage of high consumer preference. Strong brand equities create high margins and brand extension prospects. Service and goods companies exploit strong brand equity from the experience of consumers to gain revenue. High equity rates, for any brand in the market, are beneficial for the success of every company.
Consumer perceptions dimensions
Consumer perceptions about a brand may be in four main dimensions. Brand differentiation, as an element of consumer brand perception, refers to features that render it outstanding in the market. Brand differentiation sets it unique, satisfying and relevant to consumers compared to other similar brands in the market. Marketers aim at changing consumers' perceptions about a brand and enlighten them to discover the uniqueness in the brand. Marketers, therefore, initiate positive perception about a brand to set and maintain customer loyalty.
Setting and maintaining a strong brand equity involves improving its relevance to suit consumers' demands is essential to gain high brand equity in the market. This dimension of brand equity refers to how consumers feel the brand satisfies their demands. Brand knowledge is the third dimension of consumer perception that creates strong brand equity. The dimension refers to the extent of information, about a brand, that is available to consumers. Consumer esteem, as a dimension, has an extensive influence on perception. Consumers can regard and respect a brand to the extent of developing a high esteem for it. Such esteem is beneficial to achieve higher brand equity in the market. Every marketing strategy aimed at creating a strong brand equity should focus on the four dimensions to influence consumers' perception.
Measuring brand equity
Over the recent years, brand equity dominated marketing topics as noted by Isabel, Leslie and Martinez, 2008. Strong brand equities have several related advantages for service and goods companies, alike. Brand managers must understand the essentials of measuring brand equity because of its importance in assessing its market dominance (Isabel, Leslie & Martinez, 2008). Brand equity measurement also guides strategic decisions in marketing. Marketers must also embrace diverse measurement techniques to cope with increased competition from other brands in the market. Brand equity measurement is useful to guide marketing strategies.
Marketers apply brand equity measurement systems to gain timely and precise information to make tactical and strategic decisions. Most researchers as identified by Pushpender and Anupam, 2012, focus on brand equity measurement systems for goods compared to services. Companies that trade in good, therefore, have robust systems of brand equity measurements compare to their counterparts that provide services. Differences between services and goods demand the application of dissimilar equity measurement systems. The twenty-one item scale used to measure brand equity in services is applicable in the hotel industry that deals with service provision. The system uses four sub-scales to measure brand equity in services. Sub-scales used include familiarity, association, perceived quality and loyalty of customers towards a given brand.
Isabel, Leslie and Martinez, 2008, outline a consumer-based scale used to measure brand equity. The scale also uses four accepted dimensions that define brand equity. These include brand awareness, association, loyalty and consumers' perceived quality. Based on the four dimensions, researchers develop empirical scales used as the basis of testing brand equity.
According to Singh and Jagrook, 2010, several approaches developed by different researchers are applicable in measuring brand equality. Diverse approaches use perceptual or behaviour-based parameters as a framework for measuring brand equity. Most approaches use general parameters to measure brand equity. Brand loyalty is another vital factor applicable in measuring brand equity.
Singh and Jagrook, 2010, note that it is the state attained that initiates an enduring preference among customers. Brands that have high customer loyalty are likely to attract recurring purchasing behaviour. Loyal customers show bias against other brands in the market. Brand loyalty can be in two dimensions including price premium or satisfaction level (Singh & Jagrook, 2010). On an individual basis, brand loyalty attributes to consumers' regularity and patterns of purchases.
Perceived quality also acts as an important factor used to measure brand equity. Perceived quality and leadership are appropriate measures of customers' sensitivity towards products or services that affect their purchasing intentions. It refers to consumers' judgment of the extent of their satisfaction derived when using the brand based on its performance. It increases consumers' preference for the brand and raise its equity. Improving the perceived quality of a brand involves the promotion of a brand name through advertisements.
Strategists may want to create a particular brand association in the market. Brand association depicts what the brand implies or depicts to its customers. It attaches unique meaning associated with a particular brand. Singh and Jagrook, 2010, highlight three dimensions of brand associations that are relevant in measuring equity. Consumers may have an association with a brand as a product, an organization or a personality. Each of the three dimensions can instigate differential effects of consumer behaviour such as perceived value.
Another dimension used to determine brand equity is the differentiation measures applied. Brand awareness also affects customers' purchase intention and habits and, therefore, an appropriate measure of brand equity. Brand recall and recognition depend on the level of consumer attentiveness towards the level of satisfaction derived from a given brand. Brand image and awareness can act as valuable indicators of high or low brand equity. Brand image influences its level of recognition and the level of attraction from customers. Brand knowledge is influential in affects customers' reaction to the various marketing strategies.
Brand equity in the hotel industry
The hotel industry is a service provision sector as opposed to others that trade in tangible goods. Key components that determine a firm's success in the industry is its level of service branding. Service branding is significantly challenging because of its sensitive nature that differs from branding of tangible goods. Brands with high equity in the hotel industry have high consumer purchase intentions and preferences. Kayaman and Huseyin, 2007, highlight four fundamental components of brand equity in the industry. Customers' rating of brands in the hotel industry mainly depends on their perception of quality, brand loyalty, awareness and image. Hotel brand equity is the differential value that consumers and managers attribute to hotel brand and the effects of on their behavior (Kayaman & Huseyin, 2007).
Advertising is imperative in establishing brand awareness in the hotel industry. Referral and services marketing are equally important in establishing a good brand image in the industry (Bill & Andrew, 2010). Financial-based brand equity is the hotel industry refers to the incremental value that a brand achieves over time compared to other unbranded products. Brands that enjoy an extensive consumer awareness in the industry, therefore, attract a big market share and value. Creating brand awareness in the hotel industry, according to Bill and Andrew, 2010, is the first phase of building high brand equity.
Brand equity measurement in the hotel industry is valuable to improve service delivery and stand the high level of competition. Customer-based brand equity in the industry is a key factor that marketers must consider. The…