Brand Equity

Posted in Marketing and Strategy Terms, Total Reads: 22313
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Definition: Brand Equity

Brand Equity is a qualitative measure of the brand’s positive recognition or goodwill in the minds of the consumers considering the brand as an independent entity. Brand Equity is the tangible and intangible worth of a brand. The degree of premium that a brand can charge on its offering is a direct measure of the equity it possesses with its customers. Brand Equity is kind of power that the brand has over its competitors or the generic brands and is developed over time.

Brand equity can be said to be coming from the aggregate worth of the following constituents in the minds of its consumers:


Importance of Brand Equity

Brand Equity is quite important in the fact that it helps one brand gain importance and additional revenue as when compared with the competitor. Brand Equity is a complex parameter which takes into account a lot of parameters like Brand Image, Brand Identity, Brand Awareness etc. It is mainly subjective and qualitative but can be represented quantitatively.

Brand Equity is driven by marketing efforts over the years and consistency which results in customer perception which may be positive or negative. Positive perception would result in increase in brand equity.


Example of Brand Equity

Consumers pay more for a Garnier beauty product than an Ayur product.

A brand can also have negative equity in cases where it does not fit well with its consumers. As an example, Tata Nano  users reported some fire incidents with the product which led to its negative equity for a while.


Hence, this concludes the definition of Brand Equity along with its overview.

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