What is brand equity?
Brand equity measures the intangible value a brand brings to products, services, and the business beyond its functional features.
What is brand equity?
It’s the intangible value it holds as a result of its name, reputation, recognition, customer opinions, and connections with it. It is the cumulative value of a company and its impact on customer behaviour. Essentially, its value is a measure of the value a brand adds to products, services, and the broader business beyond its functional features.
There are two primary components to brand equity:
1. Brand Awareness: This relates to how well a brand is recognized and remembered by customers. Consumers with high brand awareness may readily recognise the brand’s logo, name, and other visual features.
2. Brand Associations: These are the sentiments, attitudes, and impressions that customers associate with a brand. Positive connotations like trust, quality, and dependability boost brand equity.
There are various reasons why brand equity is important:
1. Brands with significant equity are frequently linked with quality and dependability, allowing them to fetch higher pricing.
2. Customer Loyalty: Positively associated brands have more loyal customers who are prepared to pick the brand again and again.
3. Competitive Advantage: Strong brand equity gives a competitive advantage by making it more difficult for competitors to reproduce the same degree of awareness and trust.
4. Ease of Introduction: Because of the existing equity, introducing new items or services under a well-established brand is easy.
5. Brand Extensions: Brands with strong equity have a better likelihood of success when expanding into new product categories.
6. Resilience: Because they have developed a reservoir of goodwill and trust, brands with great equity are more robust to unfavorable occurrences or crises.
7. Financial Value: Brand equity may have a direct financial impact by increasing sales and market capitalization.
