Brand equity represents the intangible value a brand holds in the hearts and minds of consumers. Brand Performance Equities are functional, experiential, and emotional assets consumers engage with as the use the brand. These assets feed the Brand Equity by creating an equity or perception of their own. Everything a brand does feeds into a Brand’s Equity through its performance.
3 Types of Performance Equities
1. Functional Equities
Functional equities refer to the tangible benefits and features that a brand offers. These are often the core products or services and their associated attributes that fulfill specific consumer needs or desires.
Examples:
Apple: Known for its functional equity in innovative technology products like the iPhone, MacBook, and iPad, which are praised for their design, performance, and user-friendly interfaces.
Nike: Emphasizes functional equities in its athletic footwear and apparel, focusing on performance-enhancing features such as comfort, durability, and advanced materials like Nike Flyknit in shoes.
Subway: Functional equities are evident in Subway's customizable sandwich options, emphasizing fresh ingredients and healthier alternatives in fast food. Their 'Build Your Own' sandwich concept provides flexibility and catered choices to meet diverse consumer preferences.
2. Experiential Equities
Experiential equities encompass the overall experience a consumer has when interacting with a brand, beyond just the product itself. This includes customer service, ease of use, and the quality of interactions at various touchpoints.
Examples:
Starbucks: Provides a rich experiential equity through its store ambiance, personalized customer service, and the ritualistic experience of enjoying handcrafted beverages in a welcoming environment.
Disney: Delivers exceptional experiential equity through immersive theme park experiences, character interactions, entertainment shows, and attention to detail that create magical moments for visitors.
Hiton Hotels & Resorts: Experiential equities include personalized guest services, luxurious accommodations, and amenities that ensure comfort and convenience. Hilton's loyalty program, Hilton Honors, enhances the guest experience through perks like room upgrades and exclusive access to events
3. Emotional Equities
Emotional equities refer to the feelings and emotional connections that consumers associate with a brand. These connections often stem from the brand's values, storytelling, and the way it resonates with consumers on a personal or aspirational level.
Examples:
Dove: Builds emotional equity through campaigns promoting self-esteem and body positivity, fostering a connection with consumers who appreciate the brand's commitment to real beauty.
Coca-Cola: Evokes emotional equity through its long-standing campaigns that emphasize happiness, unity, and moments of togetherness, positioning the brand as a symbol of joy and sharing.
Chick-fil-A: Emotional equities are evident in Chick-fil-A's brand values of hospitality, respect, and community involvement, creating a familial atmosphere. Their commitment to closing on Sundays to allow employees time for rest and worship aligns with their values-driven approach, fostering loyalty among customers.
It is not enough to simply identify your brand’s performance equities. You need to determine if they are differentiating or category norms. It is one thing to believe your functional elements are different and another to critically assess whether they are unique and distinctive. After listing all Functioning and Experiential equities, we must determine whether they are Point of Parity (PoPs), Point of Superiority (PoS), and Point of Differentiation (PoDs).
Points of Parity (POPs), Points of Superiority (POS), and Points of Differentiation (PODs) are three distinct concepts used compare a brand to its competitors:
Points of Parity (POPs):
These are attributes or benefits that are considered essential for a brand to be considered a legitimate competitor in its category.
POPs are necessary for a brand to be accepted and considered by consumers but do not necessarily provide a competitive advantage.
Examples include basic product features, service levels, or customer expectations that are standard within the industry.
Points of Superiority (POS):
POS are attributes or benefits that are perceived as better or superior to those of its competitors.
These are weak competitive advantages that set the brand apart and provide reasons for consumers to choose it over competitors. Why? It is very common for brands to consider and even state they are “better” than their competition. Very simply, if every brand claims to be better than every other brand, no brand is better than any other brand.
Examples might include superior product performance, exceptional customer service, or unique features that are not easily replicated by competitors.
Points of Differentiation (PODs):
PODs are specific aspects or attributes of a brand that set it apart from competitors and provide a distinct reason for customers to prefer it.
These are unique selling propositions that create a clear and compelling competitive advantage.
PODs can be based on innovation, ownable processes, technology, or trademarks; any factor that distinguishes the brand in an “ownable” way. The word “ownable” is very important. A true PoD cannot be stated by any other brand amongst your competitive.
A brand does not need to have many PoDs however they cannot have zero PoDs as well. It is through PoDs that a Brand can properly communicate differentiation that provides a competitive advantage. Points of Differentiation (PODs) are critically important for several reasons in brand strategy and marketing:
Competitive Advantage: PODs provide a brand with a unique competitive edge over its rivals. They differentiate the brand in the minds of consumers, making it stand out in a crowded marketplace. This can lead to increased preference, loyalty, and ultimately, market share.
Value Proposition: PODs articulate the unique value that a brand offers to its customers. By highlighting what sets the brand apart, PODs communicate why consumers should choose this brand over others. This helps in building a compelling value proposition that resonates with the target audience.
Brand Positioning: PODs play a crucial role in defining and reinforcing the brand's positioning in the marketplace. They help clarify where the brand stands relative to competitors and what specific benefits it delivers that others do not. This positioning helps in shaping consumer perceptions and influencing purchase decisions.
Brand Equity: Strong PODs contribute to building and enhancing brand equity over time. They establish a distinct identity and reputation for the brand, making it memorable and recognizable. This can lead to greater brand loyalty, premium pricing potential, and resilience against competitive pressures.
Marketing Communication: PODs provide a clear focus for marketing communication efforts. They serve as key messages that can be consistently communicated across various channels to reinforce the brand's unique strengths and benefits. Effective communication of PODs helps in creating brand awareness, shaping perceptions, and driving engagement with the target audience.
PoDs are leveraged in the Brand Concept generation process and must support the Brand’s Purpose as well as Brand Positioning.
The next blog/ article will be the last phase of the Brand Fundamentals building process, Brand Concept.
About GDJBrands
GDJBrands helps visionary founders and business leaders get the most out of their brands by taking a holistic, tailored, ground-up approach to brand-building. Its founder, Gary De Jesus, excels in Brand Development and Marketing, uniquely incorporating principles of Biological and Cognitive Sciences, and Psychology to build strong brands and fulfill founders' visions. His goal is to make dreams come true.