Brand equity describes the level of sway a brand name has in the minds of consumers, and the value of having a brand that is identifiable and well thought of.
Brand equity refers to the importance of a brand in the customer’s eyes, while brand value is the financial significance the brand carries. Both brand equity and brand value are educated estimates of how much a brand is worth.
Brand equity has four dimensions— brand loyalty , brand awareness , brand associations , and perceived quality, each providing value to a firm in numerous ways. Once a brand identifies the value of brand equity, they can follow this roadmap to build and manage that potential value.
One measure of brand equity is the additional value a customer would pay for a product or service from one company over another if both offered the same tangible features. If consumers are willing to pay more for the product, then that product must have higher brand equity to that consumer.
Example of Brand Equity An example of a brand with high brand equity is Apple. Although Apple’s products are very similar in terms of features to other brands, the demand, customer loyalty, and company’s price premium are among the highest in the consumer tech industry.
Brand equity is a marketing term that describes a brand’s value. That value is determined by consumer perception of and experiences with the brand . Positive brand equity has value: Companies can charge more for a product with a great deal of brand equity .
The brands of the world with the highest brand equity.
|Brand||Brand Equity (USD, billions)||% of Market Cap|
Some examples of firms with brand equity—possessing very recognizable brands of products—are Microsoft, Coca-Cola, Ferrari, Apple, and Facebook. If done right, a brand results in an increase in sales for not just the specific product being sold, but also for other products sold by the same company.
Nike has successfully created a strong brand by fulfilling the pillars of brand equity, which include: brand loyalty, brand awareness , brand associations and perceived quality. Strategic marketing messages, combined with quality products have allowed for Nike to excel in each dimension of brand equity.
The four benefits of brand equity are: Less-drastic declines in revenue when the team loses. Ability to charge price premiums. Greater corporate interest.
Here are four steps to building a successful brand . Define how you want to be perceived. Organize your business based on this promise. Communicate your promise. Be consistent.
The most important components of brand equity are the following: Brand Awareness. Customer Experience. Customer Preference.
In this method of brand equity measurement, brand value is calculated by first taking the price difference between the branded product and a generic product, and then multiplying the difference with the total branded sales volume.
Build Brand Equity Step 1 – Identity: Build Awareness. Begin at the base with brand identity. Step 2 – Meaning: Communicate What Your Brand Means and What It Stands for. Step 3 – Response: Reshape How Customers Think and Feel about Your Brand . Step 4 – Relationships: Build a Deeper Bond With Customers.
In effect, the market bears higher prices for brands that have high levels of brand equity . Positive brand equity increases profit margin per customer because it allows a company to charge more for a product than competitors, even though it was obtained at the same price.