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Brand Equity: Why it is Important When You Grow Your Market Share

Major Points From The Article

  • brand equity elevates your brand enabling you to grow your market share

  • with increased brand equity, you can increase your prices and therefore profits

  • you will be able to increase your business's market share

  • your competitive advantage increases with high brand equity

How many times have we been to the pharmacy with a prescription and the pharmacist has said "would you like the generic"? What is our instant thought? It is cheaper, of lower quality, and something we don't want. The same can be said for other generic product lines, such as boxes of chocolates, toilet paper, dishwashing liquid, and more. We instantly know that if we buy the unrecognizable brand we are probably going to get a nasty cheap, tasteless (if it is food), product. In comparison to a well-recognized brand we know is quality, more expensive, tasty (if it is food) product.

This is Brand Equity. It is the value premium that a business generates from its products with its recognizable name when compared to a generic equivalent.

paradelta strategy brand equity components

***To listen to the full podcast - simply press the play button below***

And due to Brand Equity, we pay more for those products even if it is exactly the same, packaged at the same factory, and has no considerable difference in quality. And a business should focus on growing its brand equity as it allows the business to:

- Increase their prices as the customers will be willing to pay it

If you consider staple products such as water, flour, eggs, and sugar, there is no difference in what they look like, taste, smell, feel, and act. However, when we package them we can create brand equity with words such as premium flour, large eggs, spring water, and more... The branding attached to the product can greatly increase the perceived quality and therefore how much the buyer is willing to pay.

- Increases the profits due to the increased price

As we stated above using the staple products as an example, there is no considerable difference in the product until it is packaged. If we consider bottled water, one saying spring water and the other saying plain water, the base cost stays the same, however, we can sell the spring water for a higher price increasing the profit margin. Depending on the product this can result in millions of dollars in profit difference, and all from the word "spring" being on the label.

What word on your product could elevate your price?

- Increases the captured market share

Customers like to feel smart and when they see a brand they recognize they instantly feel smart. This comes down to the business's brand awareness. The person is aware of your brand (maybe not your product or what you do), but when they see your product in the store they instantly think "I know that brand" or "I have seen these before" and will buy your product over your competitors. In turn, this increases your market share.

- Increases the competitive advantage over the business's competitors

As stated above, the increased captured market share enables the business to control more of the market and hence its competitors. For example, a business could decrease its price to increase its market share even further and push out its competitors because the competitor can no longer compete at its current price. Another example would be to increase your business's product line to increase your brand awareness in stores (brand equity), but to also take up more of the available shelves within the store, leaving less for your competitors.

The most famous brand equity competition for market share is between Coca-cola and Pepsi. Both have established brands, and both compete in the cola/soft drink space. Have a look next time you are at the grocery store. Who has more varieties? the price? the space on the shelf? Which one do you buy? Why?

Brand equity will help elevate your business and will allow you to increase profit margins, increase sales, and win against your competitors. How good is your brand equity?

Within Paradelta Strategy's business growth services, we provide strategies to increase your brand equity and marketing campaign management services to strengthen the process. Over the years, we have helped businesses across Australia to grow and expand, nationally or internationally. To get assistance with your business, simply email us at or schedule a no-obligation discovery call here.

paradelta strategy grow your market share


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