Maintaining brand equity through measurement and advertising strategies

Brand equity has been defined as the power generated by a given brand in the market over the years. A product, which has a powerful brand name, normally experiences higher sales and profit margins than other players in the market. Brand equity can also be defined as the impact a brand has or the perception it has on its customers that make it sell more. Brand equity is built on the foundation of customer attraction and retention. Many companies are very keen on maintaining their brand equity; they would go to greater extent to make sure that their brand retains its value in the market share Chen, Chen, & Huang, 2012()

When a company wants to value its brand equity, it will focus on the following elements, they include; profit margin, brand language known to customers, changing market share, consumer recognition of logos, consumer perception of quality, visual elements and other important brand values. Most companies with higher brand equity would want to improve the status of their brand and those that have low brand equity will try to improve the brand by changing certain aspects that are not appealing to the customers Philip Kotler & Kevin Lane Keller, 2008.

Therefore, for companies who would want to maintain their brand equity, they would have to first measure the level of their brand equity. The brand is measured into three main levels. These are; at the firm level, at the product level, and lastly consumer level. At the firm's level, brand equity is measured through assessment of the brand as a financial asset. At the product level, the brand equity is measured by comparing the brand's price with another equivalent private labeled brand. Lastly the brand equity can be measured by seeking the views of the customers about the brand, how well they recall and associate with it Chen et al., 2012()

After knowing where the brand stands in the market share, the company can, therefore, come up with ways which can assist it to retain its brand name. The company can do the following to retain their brand equity. First they should embrace advertisement, this is because, many consumers relate well to what they see or hear from other. Very, few of them would want to try something, they have neither seen nor heard about Philip Kotler & Kevin Lane Keller, 2008.

Therefore, consumers associate well with visibility and so, they should be persuaded to continue using the product. Before a brand is advertised, the company's marketing department should consider the message the advertisement will have on the consumers, the quality of the advertisement and the impact the advertisement is to have on the consumers.

There is a saying that goes, "The person who saves money by not advertising is like the man who stops the clock to save time" Chen et al., 2012.

For advertisement to have the impact, it should bare the right information and be presented to customers in various forms according to the needs and the availability of the target audience.

Secondly, companies should renovate and update their brand equity. Before renovating and upgrading, companies should do their market research so as to determine the current prevailing trends. They should also consider their competitive niche so as not to be left out by the other competitors. Since branding is an ongoing process, and a company should endeavor to conduct surveys or focus groups to determine how people perceive their brands Philip Kotler & Kevin Lane Keller, 2008()

Thirdly, the company should ensure they are consistent because, consistency counts. In as much as branding evolves, companies should be careful not to lose their touch with their customers. Customers have a tendency of not following products that keep on changing, they like to take in the marketing message and contemplate over it so that they may decide to use the product or not. Consistency comes in two parts; the first part is that the company must operate within the known brand messaging, and this has some influence on the everyday brand management activities. Consistency should be reflected in the entire organization, from the employees, to the facility, to the marketing collateral. Everybody working for the company should conduct all their official duties with the brand in mind; they should be ambassadors of the brand. Secondly, the organization's marketing message should be on point. Brand names should be maintained at all cost no-matter how they will have become boring to you after many years of associating with them Chen et al., 2012()

The forth way is though having brand loyalists. These are a loyal customer who assists the company to sell their brand just by being loyal Philip Kotler & Kevin Lane Keller, 2008.

Brand loyalists are known to spread the message about the brand to other customers and so, they contribute tremendously towards having new customers and retaining the existing ones. Brand loyalist can be welcomed, rewarded and maintained by; giving them promotional product after a purchase, anniversary celebration and issuing of free coupons among others.

An example of a company which has endeavored to maintain their brand equity is the Coca-Cola Company. Since its formation, it has retained its product quality, maintained the customer's loyalty, and they have been consistent in their operation and product.

Product Life Cycle Concept

Product life cycle is termed as the stages through which a product passes after having been sold. Unlike human life cycle of birth, growth, maturity, decline and death, products too goes through a life cycle which requires many tools, skills, processes and involves many professional discipline. There are four main stages in a product life cycle and in each stage, there are the relative amount of sales and profits experienced at each stage. These stages of a product cycle are as follows;

First, there is the market introduction stage. At this stage, the products are known to be of high value since they are still new and freshly introduced into the markets. Since the products are newly introduced, their sales volume is still slow; the volume will be low because very few may take the risk of trying the product at its initial launch. Some will wait to see how those who bought it at the first instance are adapting to it, hence from there the volume will be increasing as those who have tried the product will pass information to others new customer. With the introduction of a new product into the market, there is the possibility of there being little competition from other competitors since most of them will not have produced similar product Calantone, Yeniyurt, Townsend, & Schmidt, 2010.

At this stage, the profits will hardly be realized since, the volume sold will be low, and at the same time, more customers will be prompted to use the product through, various promotional strategies such as issuing of free samples, coupons for free samples, after sales service and vigorous advertisement.

The second stage in the cycle is Growth stage. At this stage, the product will have gained popularity thus increasing its sales volumes significantly. Due to the large volume of products manufactured, the company will be at this time enjoying economies of scale because; most of its raw products will have to be acquired in large numbers hence lowering the cost as compared to acquiring them in small quantities or numbers. Therefore, the economies of scale would give room for profits to be realized. At this stage, the public awareness had risen as compared to when it was launched; therefore, the marketing strategies will have to be reduced hence saving the company some money, allowing them to realize profits. As the products gains popularity, emergence of other competitors with similar products is noticed hence leading to a price decrease because of forces of demand and supply Christiansen, Varnes, Gasparin, Storm-Nielsen, & Vinther, 2010()

The third stage is the maturity stage; here the costs are further lowered due to the increased volume of similar products in the market. At this time, the sales volume is at its peak and also the market will have been saturated by the invasion of the other competitors into the market. The introduction of other cheaper products into the market will at this point leads to a drop in the product price and for the market share to be increased; most companies will go for brand differentiation and diversification of the features. At the maturity stage, the general industrial profits will decline tremendously due to saturation of the market surpassing the consumer demand Philip Kotler & Kevin Lane Keller, 2008()

The forth and the last stage is the saturation and decline stage. At this stage, the sales volume decreases because there will be the introduction of new almost similar products. Also, the profitability of the product will have diminished since the sales volume will be low. The production and distribution efficiencies greatly interfere with the profits realized from the salesWiktorsson, 2012.

Most products introduced into the market has to go through this stage, a good example being Coca-Cola, when it was rolled out, it had difficulties penetrating the market, but after various promotional strategies and sales, it's started experiencing growth in both the sales volume and in profits gained. Then soon other players came such as Pepsi who also tried to penetrate the market. With the introduction of Pepsi into the market, the market share was divided, sales volume for both commodities went low and the prices also lowered. The product life cycle of some of these products may go far beyond the expected limit, and this is attributed to the brand equity they have.

Personal and business-related privacy issues

With the increased use of the internet to conduct various transactions, most personal information from the consumers is being captured by the companies. This information includes; social security numbers, home address, names, credit and debit card details among others. These are sensitive information and must be stored securely in a company's databases. Although this information helps companies to predict market trends and budget for its consumers, it is still necessary for companies to keep such information away from the public's view because some people may use them for illegal gains Robert C. Blattberg, Kim, & Neslin, 2008(; Philip Kotler & Kevin Lane Keller, 2008)

The growth of database marketing is not receiving support from the public since some of the information has found its way into the hands of wrong people. The lack of trust the public has on this system has made it difficult for companies to continue gathering consumer information. There have been cases of the public worrying of how some unrelated consumer providers or scammers got their names and personal details. In addition, many consumers find themselves profiled and grouped into various specialized list without their consent Milne & Rohm, 2000.

This classification or profiling is against the consumers' constitutional rights, and this forms part of the issues that discourage the growth of database profiling.

Consumers are also reluctant towards issuing of personal information to some of the transactions that require them because over the years, this information has been used by malicious people like the ones who send people junk mail, viruses through the mail and spam mail. The consumers and businesses are concerned with third party access. Customers are complaining that some of the companies they conduct business with end up selling their personal information to the third party whom they do not know. On the other hand, customers feel it is not in the interest of these companies to inquire about their personal information and so they feel, such information are private and should remain private Ashworth & Clinton, 2006()

Most customers are reluctant to give the companies their personal information because, they feel that they are sacrificing their privacy over the better services promised which do not bare equal benefit to their sacrifice. They also have issues with some the information they give may have errors caused by computers and so the company may in-return have a bad image on them without either their knowledge or the firm's knowledge. Hence, this gives them the fear of promoting the growth of database marketing.

How privacy issues can be addressed

Business and privacy issues can be addressed through training of the company's sales employees to know how to gather and store only useful information in the customer's file. Privacy issues can also be addressed by having separate databases for all the collected data. Data such as those for employees, services, distributors, suppliers and that for customers should be handled separately to avoid exposure of such vital information to anyone Philip Kotler & Kevin Lane Keller, 2008.

With the right use, of the database containing personal, most companies have become profitable and competitive; an example being the Royal Bank, which uses properly, their database for marketing, and this has enabled them to have a competitive edge over other players in the banking industry. Unlike the normal advertisement practices done by various banks, Royal insists on retaining their customers by keeping them informed of their new activities via emails and letters. This marketing move has helped them to retain the customers it has and even attract new ones through their brand loyalists.

Privacy issues are also being solved through removal of names across direct marketing channel. This has helped to reduce the customer's faith in giving information hence sustaining the growth of database marketing. This move was suggested by the Direct Marketing Association, they further suggested that consumers should be given control over their personal information in that, they should be aware that such companies are collecting such personal information and have knowledge of the methods available to restrict the use. In addition, there is the need to regulate online marketers since they are the ones who receives a big volume of personal consumer information R.C. Blattberg, Kim, Kim, & Neslin, 2008(; Milne & Rohm, 2000)

Companies can address privacy issue by first removing the doubt the customers have concerned the usage of whatever information it is being given to them. Most companies are currently working on the maintaining the trust between them and their customers Ashworth & Clinton, 2006.

For instance, a recent survey carried out showed that companies like eBay, HP and Amazon were the most trusted companies, and so, the rampant privacy issues experienced by other companies do not affect their database growth in any way since the buyers have trust in them.

Direct marketing

Direct marketing is sales method whereby the customers are directly approached with the products and services by the advertisers. The most commonly seen forms of direct marketing are use of catalogs, telephone sales, coupons, leaflets, and solicited or unsolicited emails Miller & Washington, 2012.

This form of advertisement is best suited for companies dealing with specific products. The specificity of the product gives them the opportunity to communicate directly to their targeted group Boone & Kurtz, 2011.

Some companies prefer to keep emails of a targeted age group who may find their products useful; therefore, these companies advertise these products directly to them. A company, which uses direct marketing, experiences a negative experience or perception by the consumers especially with the rise in fraudulent acts by scrupulous people.

A good example of a company which has embraced direct market strategy is the B2C Portal Company. This company specifically deals with moderately priced women's fashions and home decor through the catalogue and an e-commerce site. The company uses the probe system developed by Microsoft Visual FoxPro 5.0. This system acts by linking the customers to the relevant specialized tailors who would use the information provided by the customer to make the cloth. Therefore, the company uses some of the personal details they have acquired as an advertisement channel to reach their targeted group.

This company uses the probing system to select the vendor who will make the garment, tailored to the customers' specification. The system captures the information of the item reference that has been confirmed by the buyers. The items are then put on a catalogue along with the cost associated with it. Each garment sample is then approved to see whether it has met the specification required thereafter, they are sent back to the agents for production. This probing system generally assists the company to link with the agents wherever there is a new order for a garment and to the customers wherever they have new products to be sold.