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Why Is It Necessary To Understand Customer Perception Of Your Brand ?

Market research 04 12
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Brand equity is the value benefit and influence that a brand generates as a result of increased brand awareness and recognition that allows consumers to separate a reputable brand from a generic one .To put it simply , brand equity reflects the consumers perception and trust in the brands products and services by impacting its current performance. The better the customer experience with the brand is , better the brand equity . Its impact can be clearly seen in the market as it is becomes easy to bifurcate between a high quality brand with a loyal customer base and with product quality leadership from a generic brand which stands at a weaker footing with lower profit margins.

Brand Equity : Why Is It Necessary To Understand Customer Perception Of Your Brand ? Brand Equity

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This refers to a case where brand value has a positive impact on business such that customers are willing to pay higher for its products . This comes as a result of better brand awareness and a trust in the offerings of the brand . For example : Starbucks , Porsche and apple are well known for their exceptional quality and extraordinary services offered to customers . This provides them an edge over their competitors which qualifies them as a premium brand .


This case arises when a brands image reflects negatively on its business and thus, consumers tend to shift their product choices towards other brands. Lack of good quality, bad customer experiences or lack of brand awareness can be some of the reasons why negative brand equity takes place . For example : McDonalds released McAfrika in 2002 when a major famine hit southern Africa. The name of the burger was immediately criticized for being highly insensitive to the situation and the fact that it was released in Norway , one of the richest nations was perceived as a mockery on Africa’s financial situation for which McDonalds’ brand equity took a hit . ‘ Catastrophe crackers ‘ were distributed to customers entering their outlets which further led to disruption of business . Their sales declined and the company struggled with gaining back their original market share.

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A brand can flourish only as long as a customer trusts its products and services and is willing to invest in it instead of its competitors .Brand equity provides the brands aspiring to increase their market share, a chance, to achieve the same by enhancing its image in the minds of their customers.

A brand with positive brand equity enjoys the following the benefits :

  • Brands with greater equity can charge high prices for their products without fearing a loss in market share . This is because of the simple reasoning that customers will be willing to pay higher for brands which have a better perceived quality and awareness . Customers are of the mindset that they’d rather pay higher for a standardized brand rather than compromising on quality by spending less on other brand products.
  • Brand equity assists in cost – cuts . Brands with high brand equity are not required to spend much in production or marketing expenses . Since the brand value for the customers is already established , spending on ad campaigns and awareness programs can be avoided . This, combined with the freedom to charge higher prices allows brands to increase marginal profits and ,thus , brings in financial incentive to build their equity.
  • Brand equity establishes a niche for the brand . This niche allows the brand to introduce new products and services without the requirement of putting in additional efforts to promote it . Since the brand already has a loyal customer base , the products introduced under the same brand name have an established market and so , are guaranteed sales . The more the products , higher the profit generation .
  • Brands can defy competition by building brand reputation and goodwill . If the customer ‘s belief in a brand’s product offerings surpasses those of its competitors , its customer base widens and this puts them at a stronger footing as against its rivals.
  • A company’s stock price rises as a result of higher brand equity. The brand with higher equity generates more sales as a result of better brand awareness , which results in higher profits and and thus , higher stock prices .
Brand Equity : Why Is It Necessary To Understand Customer Perception Of Your Brand ? Brand Equity
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The key to achieving positive brand equity is by enhancing the brand name in the eyes of the customers 

This can be achieved by forming a brand that customers can identify and remember. Choosing a brand name that is effective and relevant to what the brand has to offer to its customer base is very important. It is also better to avoid generic names that can confuse the buyer and thus, may prevent prospective sales . Modeling the brand in a way that allows its products to stand apart from its competitors is the key . 

The next step is to create an image in the mind of its customers that has a lasting impact. This image can represent what the brand stands for or what it seeks to achieve through its establishment in the market . This can be achieved using drive slogans which communicates the brand purpose or slogan . For example : Netflix used its employee and customer experience as a brand proposition which made people identify with the OTT platform and allowed it to grow during the pandemic or Amazon’s leadership principles for customer experience allows people to identify Amazon as an intrinsic brand devoted to the betterment of customer experience . The brand should also conduct market research to analyze how the customers perceive the brand and whether the perceived image of the brand is in line with what the brand wants  . To build positive brand equity , it is necessary that brands generate good publicity which attracts the customers to buy its products.

Based on the market research conducted by the brand and the subsequent results , the brands need to adopt corrective measures to alter the image of the brand in people’s minds if they feel that it is not what they wanted in the first place. Customer attitude towards the brand is the essence of brand equity. Aspects such as quality , relevance , superiority and credibility must be addressed  and  efforts should be made to improve the customers experience with the brand based on the same .

Make sure your customer base identifies with the brand and conduct thorough market research before undertaking any major change. This allows customers to feel valued and builds loyalty with them. Moreover, indulging people in social media and company events allows them to identify themselves as a member of a larger community . This brings the customer closer to the brand and forges a deeper connection on a psychological level.

Brand Equity : Why Is It Necessary To Understand Customer Perception Of Your Brand ? Brand Equity

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Brand Equity : Why Is It Necessary To Understand Customer Perception Of Your Brand ? Brand Equity

A survey or free association analysis : Customer can be asked about how they perceive the brand to know whether or not the brand has been successful in generating the positive brand equity that it intends to . Techniques such as online survey and  questionnaire can be used to understand public opinion of the brand . CATI ( Computer assisted telephonic interviews ) can also be used to add an interpersonal touch to customer interactions and can help in clarifying any doubts or confusions with respect to the survey or the brand . This method is particularly useful as it allows the interviewer to understand customer response in terms of voice tone and manner of answering .

Comparison tasks is a useful psychological tool that can be used to assess how people perceive the brand . Customers can be asked to list who or what the brand if it were a celebrity , material , nationality , occupation etc . The reason for this comparison can also be inquired to understand the reasoning behind the comparison .

Meaningful results can be obtained as a result of ethnography and experiential methods that allow brands to observe customers lifestyles and buying behaviours  in order to understand the suitability of their product in that particular market and subsequently model the product accordingly. Demographic research is a major part of this analysis as it helps to tap into the lifestyle habits of people spread across various places and differentiate between them.


Price ratio analysis : Comparing the prices of the same products offered by various brands and their respective buyers can helps summarize the market share that each brand holds . Brands having higher price range and more market shares depict higher brand equity. This is simply because of the high level of trust and familiarity that the customers hold with the brand.

Revenue Generation is an effective quantitative tool that helps brands understand the profits generated from their product’s sales as against their competitor’s. Higher revenue indicates higher sales ,higher prices or both, which hints towards a better brand positioning .

Growth Rate in terms of company value and asset management are important indicators of brand equity. A time frame can be selected to compare the relative growth of the brands in terms of new products , employee turnover, sales , customer response etc.

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