Without Strong Brand Equity, Your Business May Fall Victim to Commodity Pricing
Marketing is an essential component of any successful business. However, small to mid-size businesses often overlook its cruciality. Failing to invest in marketing can have a detrimental effect on your brand equity, which can ultimately lead to commodity pricing and a decline in sales revenue.
Brand Equity
What exactly is brand equity? It is the perception that consumers have of the value in your brand, and it is built through various touchpoints such as brand messaging, advertising, customer service, and product quality. Brand equity is an essential piece to business growth because it influences how consumers perceive your brand amongst others and how they make purchasing decisions.
Now that we understand what brand equity is, let’s dive into how its built. It’s a pretty simple answer: marketing. When a business fails to invest in marketing, it fails to build brand equity. Without marketing, consumers are less likely to be aware of or find value in your brand and its offerings. As a result, your brand may become less visible and less relevant, leading to a decline in sales.
Commodity Pricing
This decline in sales can create a trickle-down effect that can be difficult to reverse. As sales decline, businesses may start to reduce prices to attract more customers. This strategy, known as commodity pricing, can damage a brand because it reduces the perceived value of its products or services. When consumers begin to associate a brand as a commodity, it’s very difficult to reverse.
Avoid The Trap
So how do we avoid this trap? Let me give you hint: It was the answer to the last question. Marketing! In order to build a strong brand and mitigate the risk of commodity pricing, businesses must invest in marketing initiatives. Marketing helps to build a strong amount of brand equity by creating awareness, telling a story, and generating interest in a brand’s product or services. It establishes the reputation and differentiation that a brand needs to stand out amongst the competition. Without it, your brand’s visibility and relevance will decline, and before you know it, you’ll have a one-way ticket to Commodity City.
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