Brand equity is not something a company can create. It is something consumers create. Brand equity is based on consumer preferences and attitudes about a product. The loyalty consumers develop for a brand gives companies a high chance of long term success.
Even though brand equity is consumer created, companies that create a successful product don’t have to sit and wait for these consumer attitudes to come to them. Companies have a large say in the process, and can create value for a product or service, which can take a lot of effort and patience. Brand equity is not only developed by providing a good quality product or service, but can also form by creating deep rooted relationships with customers.
There are four different consumer perceptions that a company must be aware of in order to fully understand and master brand equity, according to a blog by Clairine Runtung:
Differentiation: what makes the brand stand out
Relevance: how the brand meets customers’ needs and how customers feed about the brand
Knowledge: how much consumers know about the brand
Esteem: how much consumers respect the brand
One particular company that has achieved all four consumer perceptions, and thus brand equity, is Christian Louboutin, a women’s dress shoe designer in Paris. See how Louboutin addresses Runtung’s four consumer perceptions.
Differentiation: Louboutin’s brand stands out by using a unique material in the sole, paired with the high-fashion look of a tall stiletto heel.
Relevance: These shoes meet consumers’ needs by accommodating their expensive lifestyles with the designs. How do these consumers feel about this? Powerful, successful and classy.
Knowledge: Opening his first store in Paris in 1992, Louboutin has become a very well-known brand. Consumers identify with the brand because they know how high quality the shoes are.
Esteem: Consumers respect Louboutin shoes not only because of their background, but because they pay as much as $1000 for a pair of heels. Clairine Runtung suggests this is not only because of the shoe itself, but the mental power consumers possess when wearing them.
Louboutin has created a deep connection with his customers, and in that has created brand equity. This has made him a very successful business with loyal customers since 1992.