2 discussion responses
I need support with this Marketing question so I can learn better.
125words each, and references
one: Brand image and brand equity can influence the value of the product. Yet, when a company tries to dictate a product’s price, they must keep in mind these components. Martel-Lawson (2008), points out that with a highly competitive market, customers do not buy features and benefits, but rather the value included. However, value is subjective in nature; therefore, to create value there must be complementary additives. Such value-pricing strategies can include monthly or yearly promotional plans, special packaging such as recyclable packaging, free material included in the purchase, etc. which help attract and retain customers (Martel-Lawson, 2008).
Additionally, “one of the key ways to define a perceptual differential advantage is through the brand name” (Winer & Dhar, 2016, p. 50). Brand name contributes to brand equity. Winer and Dhar (2016) define brand equity as “the value of the brand name in communicating quality or other aspects of a product” (p. 50). When a consumer is able to associate the brand with emotional or mental appeal, brand equity can be established whether in a positive or negative way. Thus, brand equity is the consumer’s perceptual value of the product; when an organization’s brand equity is high, prices can reflect.
Moreover, this is commonly found when the brand’s image is well-known or established. For example, Nike. Nike, Inc.’s iconic ‘swoosh’ gives more value to its products and as a result, more customers are willing to pay more for it. Research shows that brand familiarity promotes authenticity and affects customer purchase intentions (Luffarelli, Mukesh, & Mahmood, 2019).
On a personal note, I am guilty of purchasing a product for its name brand and as a result, have been more inclined to purchase it at top-dollar. This is due to an added value I have given to the product; however, I am not alone. This allows the company to price the product accordingly. The brand equity I give to the name brand was because of its brand creditability and marketing perceptions. This influences how the company will price its products.
Luffarelli, J., Mukesh, M., & Mahmood, A. (2019). Let the logo do the talking: The influence of logo descriptiveness on brand equity. Journal of Marketing Research (JMR), 56(5), 862–878. https://doi-org.ezproxy.lib.usf.edu/10.1177/0022243719845000
Martel-Lawson, H. (2008). Value-pricing strategy: We’re not the cheapest but. Retrieved from www.smallbusinessbrief.com
Winer, R. S. & Dhar, R. (2016). Marketing management (4th ed.).Boston, MA: Pearson Learning Solutions.
two: Brand equity is the brand’s value, as perceived by customer, given a set of criteria that either adds or subtracts from that said value (1). The criteria that are considered assets and/or liabilities are loyalty, awareness, perceived quality, associations, and other assets that may include patents or trademarks (1). Adding value to the customer through these criteria equates to brand loyalty, justification of pricing, competitive advantage, and success of marketing programs (1). Strong brand identity sets the stage for strong brand equity. Having a strong brand image means being able to stand out amongst the competition and have a strong value proposition (1). A strong brand image is a part of the foundation of having positive brand equity, which is the broader, overarching concept (2).
Like brand image, brand pricing is also under the umbrella of brand equity (3). Pricing gives consumers a perception of the brand which shapes the brand’s equity. Higher end pricing typically means high quality or high end, but this cannot be negated by the fact that mid-pricing as well as (EDLP) everyday low pricing has made its way into the hearts of consumers (3). As goods become more expensive consumers are looking for lower priced brands with good quality. Also, with varied markets brands have found a way to market to consumers and set pricing appropriate that region of the world (3). As marketers one must actively monitor price effect in consideration of equity because price shapes perceptions of the brand (3). The marketer’s job is to shape the effect (3).
In my current organization there are striations of costs depending on the customer’s buying group, any current promotion, which product they are purchasing, and other factors. The brand image is great and flows into positive equity based on customer’s perception of value even within a specific brand. Our top of the line product, which sells for 2k plus per unit pair keeps yet customers coming back. The company has been in business for well over 100 years and there is a great product associated with a large value. Pricing should not undermine value propositioning (3).
1. Winer, R. S. and Dhar, R. (2016). Marketing management (4th ed.). Boston, MA: Pearson Learning Solutions.
2. Keth (2016). Difference Between Brand Equity and Brand Image. https://www.differencebetween.com/difference-between-brand-equity-vs-brand-image/
3. Pincott, Gordon (2011). Brand Equity: What’s Price Got to Do with it? Millward Brown: Point of View. http://www.millwardbrown.com/docs/default-source/insight-documents/points-of-view/millwardbrown_pov_brand_equity_and_pricing.pdf