Brand Equity in Healthcare and Pharmaceuticals

Brand Equity in Healthcare and Pharmaceuticals
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Brand Equity in Healthcare and Pharmaceuticals

Brand equity refers to the value premium that companies generate from having a well-known brand name. Brand recognition enables companies to charge a premium as the consumer perceives the product or service to be of superior quality when compared to generic, non-branded alternatives.

A strong brand acts as a signal of product/ service quality and consumers perceive this product/service to be more valuable than non-branded alternatives. When consumers are imperfectly informed on what constitutes a quality product/service, a strong brand can fill in the knowledge gap and reassure consumers.

Why is Brand Equity important in Healthcare and Pharmaceuticals?

Healthcare services and pharmaceutical products are characterised by information asymmetry between patient and provider, perhaps more so than any other industry. For example, when most people experience symptoms of a head ache, they go to their local supermarket and purchase medication advertised to relieve their symptoms, without understanding how or why it works.

Despite the branded and unbranded medication being pharmacologically identical, consumers choose to purchase the branded, more expensive medication (The Independent, 2015). This is because they associate the quality of the branding with the quality of the medication.

This phenomenon is not exclusive to the field of healthcare and pharmaceuticals, yet it is often seen to a greater degree as people value their health, and the health of their family, above anything else. Because of this, they are less willing to compromise and instead choose the branded product that they perceive to be of superior quality.

Building Brand Equity in Healthcare and Pharmaceuticals

The customer-based brand equity model asserts that brand equity is built over a series of four steps (Keller, 2001). The success of each step is contingent on the completion of the pervious step. These steps are:

1) Brand Identity– Who are you?

Brand identity, or brand salience, refers to aspects of customer awareness of the brand. These include how easily or how often the brand is evoked when discussion of the industry area occurs. It also extends to what extent the brand is top-of-mind, how recognisable the branding is and if it is easily recalled.

Brand identity (or salience) not only refers to a customer’s ability to recognise the brand (logo, name, symbols), but also to associate the brand with the service category in which it competes.

Brand salience serves three functions. Firstly, it provides the brand with meaning and association. Secondly, it increases the likelihood of being in the customers consideration set. Thirdly, when customers lack purchase motivation or purchase ability, they make a decision based on salience alone.

Brand awareness can be categorised in terms of depth and breadth. Depth refers to the ease of brand recall/ recognition. Breadth refers to the range of situations in which the brand is recalled. A highly salient brand has both depth and breadth.

2) Brand Meaning– What are you?

Salience is not enough to create brand equity, as most customers demand understanding of the meaning behind the brand. This includes creating an image of what the brand stands for, is characterised by and associates with.

Brand meaning is divided into functional and abstract considerations. Functional, performance-based considerations are formed through customers experiencing the product or service, word-of-mouth communication and how the company promotes itself; ultimately it must meet or exceed expectations. Abstract, imagery-related considerations are produced through the brand meeting the customer’s psychological or social needs; this is how the brand ‘feels’ rather than what it actually does.

Both functional and abstract considerations can be characterised in terms of these dimensions: (i) how strongly the brand is identified with the association, (ii) how important or valuable the association is and (iii) how distinctly the brand identifies with the association. Success across all three dimensions underpins brand loyalty.

3) Brand Responses– What about you?

Brand responses refers to how customers respond to marketing activities and allow brands to gain an understanding of how customers judge (head) and feel (heart) about them.

Brand judgement is formed from how the customer puts together functional and abstract associations to develop their own opinion. These generally surround brand quality, brand credibility, brand consideration and brand superiority.

Brand feeling is the customer’s emotional response/ reaction to the brand. How does the brand evoke emotions? To what intensity are these emotions evoked? These may be strong or mild, positive or negative.

Although different customer responses exist, from either the head or the heart, what truly matters is the positivity, or negativity, of those emotions. It is important to remember that in order for this to be achieved, the previous steps of brand identity and brand meaning must be established.

4) Brand Relationship

What about you and me? The final step in the customer-based brand equity model, brand relationship, focuses on the level at which the consumer feels that they have a relationship with the brand. This brand resonance can be characterised in terms of the level/intensity of psychological bond with the brand as well as the level of activity of engagement.

Brand resonance can be divided into four categories: (i) Behavioural loyalty, this is measured in terms of repeat purchase or how often the consumer buys the product. (ii) Attitudinal loyalty, this is the strong personal attachment or advocacy that the patient has with the brand. (iii) Sense of community, this is when customers feel a kinship or affiliation with others who use the brand; commonly seen in the tech and luxury good sector. (iv) Active engagement, when customers are willing to invest time, energy or resources into the brand beyond the purchase encounter; this is the strongest affirmation of brand loyalty.

These 4 steps deepen our understanding of how brand equity is built in a structured sub-sectioned format. By understanding these steps marketeers are able to build brand equity and reap the resultant rewards. Follow the link for more information on healthcare marketing.

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