what is a brand equity? starting from there, brand equity is the value or worth of a brand. when you set in mind getting a branded product, you know that it has a positive brand equity. and when you try to avoid getting a product or prefer to get another one for the same purpose you should know that this product has a negative brand equity.
this value added to the product can open doors to the company to get more profit out of a single product and providing it more opportunities to extend their line of production. plus, we should point with that the relation between the seller and the consumer will get stronger and by that every product that the seller will put in line of production will be picked by the consumer without doubt because by that time the customers will be loyal to that brand. it is with this strategic plan, well communication and knowing the needs of the consumer and being able to provide it you make a profit. a number of elements should be mentioned that are the structure of the brand equity and only found with companies that succeed to keep customers for a long period of time and maintain their profit raising. these elements are; brand loyalty, awareness, perceived quality and brand association.
in this case we will try to elaborate respectively how Coles and Aldi deal with brand equity.
starting with Coles, a well know chain store that provide all the daily needs to people, they sure know how to provide a big number of products that’s well known to their customers. every time you go to Coles you can tell that their business is increasing. after all they know how to deliver and sell the products to the consumers. the way they sell their products is based on quality. Coles have developed a relation between provider and consumers, by fulfilling their needs with branded products and with cheaper prices. we can notice that we you walk into Coles it is always crowded in there. a closer look on the shelves, we can notice that most of their products are branded ones. and the pricing is fair enough to the customers. Coles had been able to join the list of 20 global brands within increase of 4.3 % earnings between the years 2015 and 2016 and Coles being 35% bigger then Aldi (The report by WPP and Kantar Millward Brown). Coles managed to do so by providing and delivering a clear image to his consumer of what they are selling. after all you are buying an idea and that is what marketing is all about, targeting as much people ad you can with the best strategic plan that you got.
on the other hand, Aldi another chain store that sells kind of the same the products but it is not branded. these products are cheaper, with that you might think that it is not worth getting it. after all consumers have a general idea that if the product is very cheap, it means that it is not good enough comparing to an expensive one. that theory might be true. but you need to take into consideration that some people do not have enough money and are willing to pay less for a lower quality of products if it is available. in that case this is the gain and profit of Aldi’s. but here we see that Aldi is losing the ability to match the equity that other shops have and that is bad for the business.
So, to clarify things, there is two type of chains, one that depend on the brand equity, provide a very good products for a reasonable price or slight expensive and these compagnies are doing well with loyal customers and big profit. and on the other hand, a different store chains that doesn’t need equity and care less about the quality of the product, and more about the pricing and both of them have different targeted consumers.
According to what we have discussed, the chain stores that do deal with brand equity as priority are most likely to succeed and prosper then the ones who don’t care about quality.