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…