What is Brand Equity?


The entire impression of a brand is more crucial than ever as businesses turn their attention from the product to the consumer. In addition, 74% of consumers now demand more from companies regarding handling clients, staff, and the environment. To keep ahead of this transition, businesses must consider how their various marketing strategies affect brand recognition. Let’s look at the techniques they might employ to develop and enhance their total brand equity successfully:


What is Brand Equity?

Brand equity is a brand name’s strength in consumers’ perceptions and the advantage of having a well-known and respected brand. Businesses increase their brand equity by giving consumers positive experiences that encourage them to pick them over competitors that provide the same products. Creating awareness through advertisements that speak to the target market’s values, keeping promises made when consumers use the product, and engaging in loyalty and retention strategies are common ways to build brand equity.

You may raise the possibility that customers will stick with your brand rather than move to the competition by offering loyalty incentives like points that can be redeemed for discounts or free products on their birthday.

Brand Awareness

The ability of customers to recognise your brand immediately. The content and imagery associated with your brand should remain constant, even when a new product is introduced, so people can never forget it. What principles do consumers associate with the brand? Maybe they think about quality, family-friendliness, or sustainability.

Brand Experience

How were your first encounters with the brand? This might suggest that the product performed as anticipated, that contacts with brand ambassadors and customer support workers were positive and beneficial, and that loyalty programmes were worthwhile.


What is the importance of Brand Equity?

Brand equity is so significant that it might help one company gain popularity and more money than a rival. Several variables, including brand image, identity, awareness, loyalty, association, and others, are considered when calculating brand equity. Although it can be measured, it is a subjective and qualitative concept.

Brand equity is influenced by marketing strategy and efforts over time, leading to favorable or unfavorable customer impressions, brand knowledge, and increased brand equity resulting from positive perception. Customers’ understanding of the benefits of a product is essential for brand development. To promote their goods and services, businesses invest a lot of money in advertising through channels for integrated marketing communications (IMC).


Three components of Brand Equity

Brand Awareness

Brand perception is the idea consumers have about a product or service instead of what the company owns the brand. In reality, brand perception belongs to the customer, not the company.

Good or negative effects

A brand’s reputation, goods, and bottom line all gain when customers respond favorably to it, yet the opposite is true when they don’t.


Positive effects have monetary and non-monetary worth; economic value comes from increased revenue or profit; non-monetary value comes from goodwill and brand recognition. Both actual and intangible assets might be lost due to adverse effects. For instance, Uber was successful in late 2016, but many scandals involving anything from misogyny to eavesdropping damaged the company’s image, bottom line, and brand value.


How to create your brand equity?

Building brand equity has apparent advantages, but it takes a lot of work and research to establish and maintain this position. Finding out what makes your brand distinctive and researching the values and needs of your target market are the first steps. Once a company is based, it has to keep spreading the word to attract new customers and retain the ones it already has.

Test your messaging

Testing your positioning with clients is still essential when establishing your messaging. What are they responding to? What elicits the best reaction from them? Are you attending to their issues? Are you composing a message that will urge people to pause and pay attention? The news development and creative components should follow a data-driven methodology informed by your particular audience’s interests.

Create Awareness

Once you’ve created a compelling message, you need to increase awareness of your brand and your business’s primary focus. This typically involves putting brand values ahead of product attributes and emphasizing emotional connections over sales. Promoting long-term planning in a society that prioritizes the next urgent transaction might be challenging. Long-term marketing campaigns are necessary for customers to remember messages and connect them to branded products. If done well, putting more attention on the brand will pay off in the long run.

Keep consistency

Once your brand has become well-known, maintain consistency. A part of this is adhering to font and style standards consistently. Treat your brand the same way a writer would a character when approaching your brand. Even if the idea for the advertisement is brilliant, don’t use it if it doesn’t fit with the “personality” of your brand.


Examples of brand equity

A few well-known businesses may have mastered building favorable brand equity. These companies have identifiable designs, unwavering consumer preference over rivals, and unaided identification.


Due to its dedication to social responsibility, Fortune magazine ranked Starbucks as the sixth-most respected company in the world in 2020. With more than 31,000 locations globally as of 2019, Starbucks is the largest roaster and retailer of Arabica coffee beans and specialty coffees worldwide.

Coca Cola

With a profit margin of 26.7% as of June 2020, Coca-Cola consistently ranks as the top soda brand around the globe. But the brand stands for more than just the goods; it also stands for beautiful memories, a proud past, and even the country of America. Customers’ engagement has been influenced by the Coca-Cola company, which is likewise renowned for its cutting-edge marketing tactics on a worldwide scale.


Porsche, a well-known automaker, upholds its image and trustworthiness by using premium, unique materials. Porsche gives its consumers an experience in addition to a product because it is a premium brand. Compared to other automakers in its class in 2020, Porsche was rated as the top luxury brand by U.S. News & World Report.


Wrapping Up

Because customers are now the primary focus, businesses must actively consider the brand image they build and how each initiative and activity contributes to overall brand awareness and perception. Using tools like brand optimization from Marketing Evolution, businesses may gain insight into what makes their brand connect with consumers. With this insight, marketing teams can optimize future activities to build brand equity and increase ROI by making data-driven strategic decisions.

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