How to Leverage Price Premium by Building Brand Equity

How to Leverage Price Premium by Building Brand Equity

Pepsi vs Coke

According to David A. Aaker in his article “Measuring Brand Equity Across Products and Markets,” the price premium is indicative of a brand’s strength. People are willing to pay more for higher-priced brands over others. The brand – not the product – determines how much people should pay for it.

"The price premium thus becomes a reasonable summary of the strength of the brand." -David A. Aaker

In order to maximize the value of your product in the market, below are ways on how you could develop your brand equity.

Make high-quality assets

Your products and services must fill out a specific need in the market. More importantly, they should make the lives of your market much more convenient, if not satisfying.  Assets that possess value are platforms for businesses where they can tilt the price premium unto their favor.

Create perceived value

As your competitors come up with similar offerings, the only thing that would sway the minds of consumer to purchase from you instead from others depends on how they view your brand. Your assets may offer the same value propositions, but the perception that you create for your business is key in turning potential clients into customers.

Pepsi vs Coke

(By Victor L Antunez via Flickr)

The Cola Wars saw how branding prevails in a battle between two similarly placed products. Although Coca Cola and Pepsi have distinct flavors, a study shows that consumer can’t tell the difference between the two when brand information is not revealed to them. However, Coca Cola tops the US cola market with 17% shares in 2011 while Pepsi ranks third (behind Diet Coke) with 9.2% shares.

LESSON: A high-quality asset would only justify its value when people remember it. So just as it is useful, make it memorable to your unforgettable, as well.

A way of making your assets memorable is by associating human characteristics to the products and services to create a selling point of entry for your potential consumer. People are defined according to their traits, i.e. friendliness, kindness, compassion, etc., so once they see their traits impressed on a brand, they gravitate towards brands that speak to them. Also, the personality honed for your brand allows you to separate yourself from your competitors.

Another difference between Coca Cola and Pepsi is how each promoted their cola product. Coca Cola focused on the warm, fuzzy feeling of wholesomeness and family in its campaigns, while Pepsi hired celebrity endorsers to market their drink.

Develop consistency

Creating a good product is only the beginning. The real challenge is the creation of equally useful assets on a consistent basis. By coming up with products and services that continuously meet exemplary standards, you enforce your branding to your market with their every purchase.

With a more established brand equity in place, you begin to develop identity and trust from your target audience.



Humor is the calling card of Orabrush, a tongue-scraping oral product to eliminate bad breath. The company struggled in 2009 when it only sold 10 pieces per month for a measly total sum of $30US. Then, they put up a hilarious but informative 2-minute video about  halitosis and how to get rid of it using their product. The video went viral over time, accumulating 900,000 views in a couple of days. About 20% of the viewers clicked for a free Orabush, clearing out the inventory of 10,000 tongue cleaners.

The small business built upon the success of their first video and began publishing other videos to build on their brand as this strangely funny oral product company – and it worked. Currently, Orabrush has not only sold 2.8 million tongue cleaners, but also has around 189,000 Youtube subscribers.


By developing your brand equity, you create an opportunity for you to maximize revenue for your assets and create better margins for better profits. Once you have developed a trustworthy, high-quality brand, you can expect potential customers to buy from you regardless of the price (as long as it is priced reasonably).

About the Author

Christopher Jan Benitez
Benny has a strong affinity for creative writing, a deep engagement in Anglo-American Literature, a maddening passion for SEO/SEM, a profound love for guitar-driven music, and an undying allegiance to a full-bodied cup of joe at least thrice a day. He currently writes for and manages the PrintRunner Marketing Blog.

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