Creating Brand Equity

Subject: Branding
Pages: 10
Words: 2836
Reading time:
10 min
Study level: PhD

To propel a business into the public’s consciousness, brand marketing is a method used by marketers. It is a great way to establish your business’ image to capture your desired target market. But what is branding and why is it important?

This paper presents the history of using brands and what is the significance of building strong brand equity for your product or service. The paper also shows the strength and weaknesses of using brands as a marketing strategy. The current trends and issues that marketers should pay attention to regarding the topic are also presented. Lastly, the branding strategy of Xerox Co. is shown regarding their decision to reinvent their brand to improve their market.

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The history of Branding is linked with the history of trademarks dating way back to 5000 B.C.E and fast forward to the 19th century when, in the field of mass-marketing, packaged goods were introduced. Industrialization of the business environment made the production of a lot of items used in households like soaps to be move from the local communities to centralized factories. When the goods are shipped from the factories, they would mark their products with their logo or insignia on the barrels or packages, thus the word “brand” extended its definition, and became associated with that of the trademark.

The red triangle brand of the Bass & Company’s British brewery is being claimed as the first trademark in the world. At the same time, the green and gold packaging of Golden Syrup of Lyle Co. claims the same thing. It asserts that it is Britain’s oldest brand. It did not change significantly since its introduction in 1885.

Just right after the American Civil War, a Texan rancher named Samuel Augustus Maverick introduced a branding scheme which on the contrary doesn’t put brands on products. Since cattle at that time are all branded, he decided not to put any markings on his, thus the term “maverick” was used to refer to an unbranded calf.

During the Industrial Revolution, factories that are set up that time create mass-produced goods. They sell their products to market which is wide and has a customer base familiar only with local goods. It was obvious that their products, like a generic package of soap, had a hard time competing with the local products which are already familiar to the customers. The locals were all attached and very loyal to the prevailing local products.

What the producers need to do is to make the public put their trust in their products as much as they trust the local products. To increase the familiarity of the consumers with their products, companies ‘branded’ their goods. Among the first ones who ‘branded’ their products were Coca-Cola, Campbell soup, Aunt Jemima, Juicy Fruit gum, and Quaker Oats. Uncle Ben’s rice and Kellogg’s breakfast cereal provided illustrations of the problem at that era of branding. (Miller & Muir, 2004)

A house ad that explained trademark advertising was published by James Walter Thompson around 1900. This appeared to be branding in the form of an early commercial explanation. Soon enough, the radios and televisions were used to present products’ brands. Companies used slogans, jingles, and mascots to market their product. In the 1940s, manufacturers realized that consumers were starting to develop a certain relationship with their brand in a social/psychological/anthropological sense.

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Because of that, the manufacturers started to build their brand’s identity and personality according to what they want the product to be (youthful, fun, or luxury, e.g.) this event paved the way to a new marketing strategy now we call “branding”. In branding, instead of the product itself, consumers now also pay a price to the product’s brand. The trend still prevailed up to the 1980s and grew into concepts of brand value and brand equity. “Brand Equity mania” is what Naomi Klein calls this. A good example of this can be seen when Kraft was purchased by Phillip Morris in the 1988. Phillip Morris paid six times the value of Kraft on paper. They say that the reason is Phillip Morris really paid for the brand name and not for the company alone.


A brand refers to a collection of images and ideas which can represent an economic producer. It also refers to the concrete symbols or verbal attributes that can be seen or read or even heard from the product. It can take the form of a name, logo, slogan, and design scheme that carries and transmits to the consumers what the company, product or service wants to be perceived by the consumers. The influence of advertising, design, and the commentary of media, and the actual gathering of experiences from the direct use of the product create brand recognition. A brand symbolizes information about a company and its product or service.

The associations and expectations on the products produced by manufacturers are created and served through the use of brands. Values, ideas, and even the personality of a product can be implicitly conveyed by the brand’s logo, font, color schemes, or symbols. The primary objective of having a brand is to create a relationship of trust between the product being marketed and the customers. This now became a significant component of cultures and the economy. Brand and brand equity is now being portrayed as “cultural accessories and personal philosophies” (Klein, 2000).

The American Marketing Association (AMA) says that a brand is aims to giving identification to the goods and services thus giving differentiation on the product of one seller or group of sellers to other sellers. Thus, branding is all about making your prospective consumers think that you and your product is the only thing available in the market to give solutions to their problems. A strong brand can be an invaluable weapon in the market where the battle for customers intensifies as time goes by (Lake, 2008)

Strengths and Weaknesses

Products or services that carry with it a good and well-established brand can enjoy the perks of commanding higher prices compared to generic or store-branded products. This is because branding is an important value-added aspect of every product or service. It serves to stand for the specific attractive quality or characteristic of a product or service. When the generic product or store-branded product is competed with a branded but more expensive product, provided that they resemble each other, most often than not, people may opt to choose the branded but more expensive product on the ground of the quality of the product that is perceived from the reputation of the brand

Brands with a high degree of commitment from customers will likely enjoy the loyalty of the customer to the product. The customer would re-purchase/re-use the product or service in the future. It gives the company protection from competitors. Brands also result in a personal commitment to and demand for the product. (Brand Channel, 2001-2008).

When a product or a service is experienced by the customer as the best choice, it becomes the winner in a competitive situation. Customers make choices based on several factors. He weighs in these factors so, in the end, he chooses the product he deems to be the best choice. These factors are partly dependent on the capacity and performance of that product or service. A good product or service possesses the characteristics that a product he thinks should have. At the same time, the ability of the brand to satisfy the need of the customer is also vital. Branding makes it easy for the customer to identify which product or service offers what he feels will satisfy his needs and at the same time will make him feel that he really made the right choice. (Bergvall, 2008)

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A good branding scheme, implemented properly will deliver the message to a company’s prospective customer clearly. At the same time, it will confirm the credibility of the company and its product. When this happens, it establishes an emotional connection between the company and the target prospects. In turn, the customer is motivated to patronize the product and build a concrete user loyalty to it (Lake, 2008).

Sometimes, companies think that to connect with the customers, they try to be someone which they are not. They bend backward trying to have many different looks and change with the trends. Because the company has many different images and personalities that they keep on changing over time, the result would be customer confusion. In turn, the potential competitive advantage is diluted because instead of directing customers to what he/she actually needs, the company confused them more (Hoeck, 2007)

Branding also results in higher prices for products that are hurtful to consumers. Furthermore, there are times when the increase in the prices of the product or service becomes faster than the inflation rate.

Branding also makes some companies focus more on the attributes of the product instead of the benefit that the consumers should have. Another drawback of branding strategy is the possibility of a decrease in the product or service quality. In order to improve brand profitability, managers often employ gradual and incremental changes in the product to reduce costs. As a result, eventually, it will be realized that the cumulative effect of which will be visible in the decrease in product or service quality that may erode the brand’s image. Having a well-known brand can also lead the company to unwanted controversies. Because of the familiarity and being a high-profile subject, special interest groups who want to make public statements feel that these kinds of brands are a good standing ground to make their grievances to be heard.

The use of sub-brands sometimes unintentionally brings a negative impact on the parent brand. A very good branding strategy also brings a threat of overexposing the brand, bringing it to a point where it already becomes omnipresent. Aggressive marketing and distribution bring about brand awareness. On the other hand, as brand awareness takes its height, the brand will start losing its uniqueness. In short, it will become common (VanAuken, 2006-2007)

Perfect customers are how the 51-year-old owner of seven Jersey Mike’s sandwich shop franchises in Nashville, Dan Mcdonald, describe Millenials—consumers who are in the 12 to 26 years old age bracket. He said this because they travel together in one group, they consume a lot of food, and they possess a big amount of disposable income.

$200 billion is what the 80 million Millenials and their folks disburse each year, according to William Blair & Co, an investment firm based in Chicago. On the contrary, Millenials are difficult to reach the target market. Jersey Mike’s still has a lot of hard work to do to capture that market in spite of its billboards, radio spots, flyers, and newspaper advertisements.

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Youth today might be interested at this moment in something, but eventually, they will lose that interest. Messages that seem to be irrelevant to them will just be ignored.

Just recently, Edo Interactive, a firm based in Nashville, is trying to find ways on how to capture the millennial market. They spent more than a year studying these young consumers. They developed a prepaid credit card called Face card that targets the Millenials and at the same time, the businesses that they patronize.

The move was launched on September first last year. Edo’s Face card works the same way as a fiscal Facebook. The applicants have to create a profile on After accomplishing that, they will get a card in the mail that gives them the capacity to electronically, borrow, lend, or give money to their friends. The retailers can send “rewards”, which are instant store credits in small denominations, usually at around $2 to $3. Since the rewards can be cashed in by using a credit card, it’s very easy to track the responses of the consumers.

David Robertson, Nilson Report publisher, a newsletter that deals with systems of consumer payment, said that niche marketing now is a “hot idea”. By using rewards, it allows advertisers to interact with a particular audience, in a specific location, at a specific time. Billboards, TV spots and flyers, can’t do this. Attracting prime customers become more effective by using rewards. (Macsai, 2008)

Thus, marketers should start considering making an effort in reaching out to the target market called, Millenials. They should devise ways, just like what Edo did, to capture the purchasing capacity of this huge market.

Another trend in branding that marketers should not ignore is the ever-increasing use of the internet in commercial transactions. In the 90s, during the start of the internet age, marketers questioned whether marketing expenditure on the internet will be greater than the usual forms of marketing channels. A decade after, marketers have common expectations of the Internet. Marketers should be aware that there is an ever-increasing role for the internet. These issues should never be ignored because the implications of which are so high.

The internet has created a very good medium for customer-to-customer communications that can effectively communicate messages more than any other agency can do. Marketers are always very eager to manage all the inputs that the consumers receive regarding their decision-making in choosing products. The most difficult input to control is the messages that the consumers get from word of mouth. The most tremendously effective form of communication is the voice of a customer to help another person.

This can take the form of advice on what product to buy or his or her experience with this particular product. This voice is not created by the internet. What the internet does is intensify it. It gives a broad channel to communicate it to anyone around the world. The medium creates a massive source of opportunity to build a brand without spending too much on a budget (Ritson, 2008).

Therefore, marketers should be watchful of what their brand’s image on the internet is. The reactions of customers to their product can be easily communicated by the internet. They should pay attention particularly to the negative comments about their product. This way, they can be informed right away, what are the problems with their product and consequently think of ways on how to handle that.

Xerox – a brand makeover

Xerox has become a dominant entity in the copier market. This technology giant founded almost 50 years ago has to come up with a new brand that will display its new image–an image of liveliness that shall blend with the more modern world.

Xerox nowadays in some countries is also used as a verb, not just a brand name. The problem with the brand is that most customers think that Xerox is just a copier company. So after 40 years of using the same brand, Xerox finally stepped forward and reinvented its logo. They tried to make the customers look at Xerox from a different perspective. The company’s new logo is expected to disrupt the mental connotation that Xerox is only a copier company.

Xerox’s more familiar logo can be called a “wordmark”. This means that the name itself is the logo, which is presented in a consistent look. The problem was, researches showed that the logo became too familiar that people around the world would just glance at it but don’t give it much attention.

The old logo was designed in the 1960s by branding firm Chermayeff & Geismar. The traditional logo, which is block-capital letters XEROX, which is in color red most of the time, makes itself out of place in the three-dimensional world of the internet and mobile phones. The old Xerox logo and graphics just do not blend with the new media landscape. The new logo will try to convey the message of being globally depicted by a red sphere. There are also intersecting ribbons that encircle the sphere that will mean a global connection between the customers of Xerox, employees, and its stakeholders.

Customers already associated the brand with attributes such as dependable, traditional, and established. The challenge now is to reinvent the brand to reinforce those impressions and at the same time improve the characteristics which give a negative image to the Xerox brand. Xerox suffers from a brand-building disadvantage to its competitors in the market like Canon, Hewlett-Packard, and Toshiba. The competitors have strong consumer franchises, which gives them the image of innovation and modernity, and that is what the Xerox brand needs.

The new graphic symbol will convey the message of a company that is more approachable and the same time brings with it a reputation for engineering. The new logo is much more modern and approachable because of the font’s rounded corners. It makes it more human and less technical. The sphere symbol’s use will be applied in the internet. It will spin in animated applications. The new brand will communicate the sense of innovation, forward-thinking, flexibility and enterprise. In the next few years, after studies, surveys and interviews, it will be known if the brand strategy of Xerox will work for the improvement of the company. (Kiley, 2008)


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