The effect of brand equity on buying decision will be different for each product and service. Brand Equity is the power of a brand. Companies will benefit by knowing the effect of brand equity on buying decision. If a company wants to know the effect of brand equity on buying decision it must observe the dimensions that shape it.
Brand equity is a set of assets and liabilities associated with a brand, name, and symbol that add or subtract the value provided by a good or service to a company or customer. Brand equity can affect consumer confidence in making purchasing decisions. Consumer confidence arises because there is past experience in using the brand or its proximity to the brand and its characteristics.
Through strong brand equity, the company gets great benefits such as companies can manage their assets well, increase cash flow, expand market share, set premium prices, reduce promotional costs, increase sales, maintain stability, and increase competitive advantage.
Marketing must have a comprehensive and unified marketing strategy. Marketing strategy should be able to provide guidance about the activities that will be executed to achieve corporate goals. The marketing strategy should be able to increase the brand equity value. This is because brand equity occupies a leading role in building a brand in the minds of consumers.
The Effect of Brand Equity on Purchase Decision
Brand equity includes four dimensions consisting of brand awareness, perceived quality, brand association, and brand loyalty.
In the field, each of these dimensions will have an effect on brand equity. Each dimension will give each other a significant contribution to the consumer’s buying decision. If all dimensions give a positive and significant impact on brand equity, then the consumer’s drive to buy will get bigger.
Research on brand equity should be able to assess the influence and significance of these four dimensions to brand equity. This will answer some questions:
Does it have a positive and significant influence on brand awareness to purchasing decisions?
Does it have a positive and significant influence on perceived quality to purchasing decisions? And more questions.
Does it have a positive and significant influence of brand association to purchasing decisions?
Does it have a positive and significant influence on brand loyalty to purchase decision?
Are there any simultaneous positive effects of brand awareness, perceived quality, brand association, and brand loyalty to purchasing decisions?
Is there a dominant influence on consumer purchase decisions?
Building Brand Equity
Companies can build brand equity by creating the right brand knowledge structure for the right consumer. This process will depend on all contacts associated with the brand (done by marketers or not).
The company can also increase brand equity such as increasing promotion, maintain quality, maintaining loyal customers and increasing sales service.
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