The Value of Having Brand Equity

Marketing 1.Johnson & Johnson has been able to establish strong brand equity for its line of baby products. What benefits does J&J have because of its brand equity for these products? The advantages of having a strong brand equity are that it increases the visibility of the company’s product and makes them more attractive to consumers.

The brand has the benefit of a good reputation in the minds of consumers: they see the brand of the product and immediately expect it to work and be a good product. This in turn helps the company to grow its sales and increase its margins. The more popular a brand becomes, the greater the premium the producer can charge.

For example, if a Johnson & Johnson is selling baby powder that is similar to what a generic off-brand is selling, Johnson & Johnson can still charge more for their product because of the premium afforded them by their brand equity. Even though their product is more expensive than the off-brand, Johnson & Johnson can still move enough product to be profitable—all thanks to the demand and appeal their brand equity affords them.

Concomitant with the concept of increasing margins is the idea that brand equity equates to customer loyalty. Customers will be loyal to Johnson & Johnson products because they feel that they should buy the brand based on past experiences. Rather than try another brand, customers who have bought Johnson & Johnson in the past will continue to do so. This also allows for the opportunity to expand its product line.

Once the company has built up considerable brand equity it can offer other products that may in essence be little different from off-brands but will have the added charm of being offered under the Johnson & Johnson brand. This gives the company an advantage over competitors—all thanks to its brand equity (Hartford, 2018). 2.You have been asked by Coca-Cola’s product manager to present the arguments for and against extending the Coke brand to a new cola drink.

What would be the arguments for and against extending the Coke brand to a new cola drink? The arguments for extending the Coke brand to a new cola drink would be that Coke has great brand equity so would automatically give consumers an incentive to purchase the new beverage if the Coke name were applied to it in some manner. People who love Coke tend to love other Coke products and become loyal consumers of Coke sodas.

If given the option, they’ll choose Coke products over Pepsi products because they prefer the Coke brand recipes. Coke’s reputation precedes it, and that carries a lot of weight with consumers. On the other hand, if Coke were to apply its brand to a soda that was less than worthy of the Coke seal of approval, so to speak, the brand could suffer in the long run.

Consumers could begin to doubt the brand’s quality and suspect Coke of selling out or of trying to push inferior products onto the market simply by affixing the Coke name to the product and not actually attempting to infuse the drink with any sort of quality recipe or care. Thus, the final decision would really have to come down to the question of whether the product was worthy of the brand name or not. It would also have to be compelling enough to warrant carrying the brand name.

Coke does not have a reputation of affixing its brand lightly to products left and right. A product that carries the Coke brand name has to be a superior product—one that can stand above others on the market. So the real question is whether the quality is there to begin with: if so, the Coke name can be applied. 3.SanDisk is introducing a new MP3 player and you are responsible for creating the package design.

What key information and other creative elements would you include on the package? When it comes to packaging, the most important element is that the package simply look appealing. Attractive packaging is more effective at selling the product than anything else (Silver, 2011). Appeal, however, is determined by a number of factors: chief among them is the perceived value that a product has. For a new MP3 player, SanDisk should highlight that feature which provides the user with the most value when it comes to using the product.

This feature should stand out on the packaging. Second, the packaging should differentiate the product somehow from its competitors. As Trout and Rivkin (2006) point out one must “differentiate or die” in order to compete in the market. It is also important for the brand SanDisk to be featured prominently on the packaging. SanDisk is a company with brand equity, so any product with its name attached to it should feature that name in a way that catches the attention of the consumer.

The name SanDisk will do more to sell the item on the shelf than anything else if the consumer is one who places confidence in brand names. 4.Consider the five dimensions of service quality: tangibles, reliability, responsiveness, assurance, and empathy. a. Identify a recent service encounter you have experienced as a customer (either B2C or B2B) that you would classify as a generally bad or good experience.

In what ways specifically did each of the five service quality dimensions contribute to your perceptions of poor or good service? Be as specific with your examples as you can. What could the service provider have done to improve each of the relevant dimensions and thus improve your experience? A recent service encounter I have experienced as a customer that I would classify as a generally good experience was when I purchased a drink from a bar and the barrister was friendly and communicated a pleasant vibe to me.

I had to wait a moment before anyone came over, so I was beginning to think that I was putting the barrister out by having to put down his mop and pour me a drink. But when he cheerfully took my order and had a tone in his voice that was pleasant, I was reassured about my business being wanted. I sat down and enjoyed me drink.

The five service quality dimensions contributed to my perceptions of good service in the following ways: a) The tangibles—my drink—was nice and cold and in a clean glass. It had a good pour so.