A recent example of a misunderstanding between sales and marketing equity is the recent failure of the Godzilla movie. Equity had all the toys ready to go when the movie was released, only to have them unsellable. Equity’s stock fell fifty percent following the failure of the movie, and they decided to take steps to move away from event movies. This article will discuss sales equity and its relationship with event movies. We’ll also discuss why some businesses choose to sell their products to consumers instead of their competitors.
A company’s brand equity is a combination of tangible and intangible assets, such as social acceptance, reputation, and risk factors. Sales equity includes a customer’s perception of the product, the salesperson’s skills and advice, and the company’s ability to communicate effectively. In short, sales equity is the value that a customer places on a company, as opposed to its cost. If the customer sees an investment as worth the price of buying it, they are more likely to buy it.
The buyer sees a big pie, and he perceives the value triangle of the product, the brand, and the sales equity as a piece of that pie. As a result, he wants a piece of that pie, and a slice of the pie belongs to the seller. By selling the product, the buyer perceives a high level of sales and marketing equity, and is likely to purchase the product or service if the pie is big enough.
Equity’s strategy focused on diversifying its customer base. While the company relied on Burger King for the majority of its sales, it cultivated relationships with Latin American companies. In a single year, sales to Latin America increased from nothing to $11 million. Furthermore, the proportion of Burger King sales decreased from eighty-five to seventy percent. In fact, the co-CEOs declared a goal to reduce Burger King’s share to less than half.
Pure commodities are the exception to this rule. In this case, a product like corn has no sales or marketing equity. It is sold by the barge, and no one gets paid extra for being a popular brand or hiring a great barge operator. If a product is pure commodities, a chummy relationship between the product maker and the buyers is unnecessary. Instead, companies should focus on building brand equity in a product.
To increase customer equity, a company must focus on two aspects of its business. First, it must create a profitable product. Customers must be a priority. Marketing equity should be measured by EBITDA. The goal should be to maximize customer lifetime value. Ultimately, the company’s shareholders will benefit from increased profitability. To create a brand equity-rich business, marketing investments should focus on customer satisfaction. With this understanding, the company can focus on cross-selling and customer retention.
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