Marketing Dictionary
Brand Equity
Definition
The commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.
Deep Dive
Brand equity is the commercial value that a brand derives from consumer perception of its name, rather than from the product or service itself. It's the aggregate of assets and liabilities linked to a brand name and symbol that adds to or subtracts from the value provided by a product or service to a firm and/or to that firm's customers. This value is built over time through positive consumer experiences, successful marketing efforts, and strong brand associations, leading to benefits like higher sales volume, premium pricing power, and increased customer loyalty.
Examples & Use Cases
- 1Apple can charge a premium for its iPhones compared to competitors with similar specifications because of its strong brand equity, built on perceptions of innovation and design.
- 2Despite having comparable taste, consumers might prefer a well-known coffee brand over a generic one, reflecting the added value of the brand name itself.
- 3A luxury car manufacturer maintains its high pricing and exclusive market position primarily due to decades of cultivated brand equity representing prestige and performance.
Related Terms
Brand ValueBrand LoyaltyPerceived Quality