The Ultimate Guide of Brand Equity in Marketing

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The Ultimate Guide of Brand Equity in Marketing

Every organization wants to advertise the products and services in the market, which can impact consumers. 

‘Brand equity’ is the best way to rule your company’s marketing and earn a profit.

It is a strategy that provides the best experience to the stakeholders of your company.

Brand equity is a known phrase in the marketing industry that defines the value of a label. Fundamentally defined by customers, It acts a vital role in pushing success in business sales.

When a customer has a good thought of a brand, it has large brand equity. Likewise, If a customer has a poor impression of a brand, the brand has moderate brand equity.

For example, Apple’s customers pay more for a mobile phone than its competitors because it has high-value brand equity.

So, to overcome the challenge of establishing a one and have a high-profit margin read this detailed guide.


So, let’s talk more about brand equity.

What is Brand equity?

Brand Equity Definition and Importance | Marketing91

It is a value premium for a company’s products and services created by the perception of customers as a result of the products and services. 

The marketing makes products and services memorable, reliable and presents it with high quality. 

It is the worth of a brand that is perceived in the market and makes it socially valuable as a brand name.

Two perspectives are considered informative where branding investments bring revenue from unaware buyers. 

Meanwhile, cognitive psychology creates awareness among customers about the brand features and generates revenue.

It has a different meaning in three contexts. First is the accounting context, which is the value of the brand. 

The second is the marketing context, which we are going to discuss, basically qualitative where consumer perception and association are the parameters. 

Lastly, brand equity has meaning in the consumer-based context, measurable in quantity as brand loyalty.

I hope now you know the meaning of brand equity. So, let’s delve deep into this and discuss its components.

Fundamental Components of Brand Equity

In this session, we will discuss some fundamental components of brand equity. To create brand equity in your company, what you need to focus on is the ten components.


The brand must cover a broader scope, so the product and services related to it or added on must be relevant to it. The brand should leverage the demand in the future and not be dependent on very few products and services.


The products and services under the brand should be relevant to the needs of the targeted customers. If there is no utility of what you sell, then putting efforts and resources is waste.


Bringing innovation to the brand creates a perception that it is full of energy and something new to sell to your customers. Try to improve the brand or redesign it over the period.


The brand, which is different from its competitors, can create an influence without much awareness. A unique personality makes your brand stand out.

Image and reputation

Positive influence, brand value, high-quality services, and products, as well as the perception of its premium nature, help build a brand model and status.


Is Customer Loyalty Dead?

Customers can be counted as loyal when another brand is offering price cuts or additional services. Identify what makes your customer loyal and what you have to do to make them loyal to the brand. 


Do your customers know what you have to offer in the market? Is your logo, and the brand name is easily recognizable, is the brand famous besides its existence?

Try to create awareness about your brand as much as possible.


Providing low quality in the market will create a negative influence on the market. There are many parameters like competitors’ prices and offerings and know that your brand gets compared by customers for overall quality. In other words, it offers the best variety to create loyalty and brand value.

Proprietary Brand Assets

Use patents, trademarks, relationships, and acquisition your strength to expand your brand equity.

Brand’s Associations

Try to communicate with the customers by your advertising, pricing, after-sales service, as it creates a strong and positive brand association, which helps in earning more revenue.

So, these are the fundamental components of brand equity and I hope it is now clear to you.

Different Models Implemented to Create Brand Equity

Three effective models are used to build a powerful brand. The following are the models implemented to create brand equity.

Keller’s Model of Brand Equity

Reviewing the Concept of Brand Equity and Evaluating Consumer-Based Brand  Equity (CBBE) Models - Research leap | Equity, Brand, Of brand

Kevin Keller’s model is the most appropriate theory in marketing as it emphasizes the brand to create brand equity instead of the customer.

It wants you to answer the four questions of brand identity, brand meaning, brand response, and resonance.  

Firstly, create awareness and know what your customers want to build a strong brand identity and grab the attention in the market.

The second step is to interact with the customers so that you can explain to them what does your brand has to offer, the quality, and the price of the product and service.

The third step is to attract the judgment of consumers by meeting their expectations. The product or service must be attractive and satisfying. It helps you to obtain a brand response.

The last step is to create a bond between your brand and the customer to establish an association. It is the hard part of the process, but it is not impossible to achieve it. 

Aaker Model

The Aaker model suggests that brand equity is an added value to the product and services associated with the group of assets and liabilities to the brand. 

The five pillars that give structure to the model are brand awareness, brand loyalty, perceived quality, brand association, and assets. The explanation of all the five components is discussed in the above section.

Brand Asset Valuator Model

The brand asset valuation model collects consumer insights to know and improve the health of the brand. We can compare brand equity with other brands under this model.

The four components of the model are differentiation which is uniqueness, reputation, awareness, and relevance. 

How to Measure Brand Equity

You may consider many factors while measuring brand equity like the perception of your consumer, the nature of the opinion, and the knowledge’s value. So, you need to consider three metrics for measuring your brand equity.

  1. Financial metrics: it measures the monetary value of the brand, both internally and externally. It provides analyses based on market share, transactional value, revenue generation, growth rate, and sustainability rate and at last price premium.
  2. Knowledge metrics: it measures the popularity of your brand by its consumer awareness and association with consumers.  There are two kinds of association firstly, a functional association where you measure the utility of the brand, and secondly, emotional associations are how the consumer feels about your brand. For example, the Mercedes can just be a car to someone associated with it functionally, whereas, for someone, it’s the dream car that establishes an emotional association. Knowledge metrics gathers data and information about the customer and brand.
  3. Preference metrics: It measures the perception of the brand and your position within your industry. It measures factors like brand relevance, value, accessibility, and emotional connection established. 

For example, the Lays of Pepsico, and Bingo of ITC. The brand Pepsico has established a relationship, brand value, and relevance within its industry, whereas the product of ITC, bingo, is not known to everyone.

Relationship Between Brand Equity and Marketing 

Do you know the recognized brand’s cost of marketing is lower than its competitors? 

In marketing, high brand equity has many competitive advantages like higher revenue and less expensive marketing campaigns. 

The process of marketing becomes easy. The brand can launch a new product line as it already has a large customer base and does not need to create awareness among the customers every time.

Importance of Brand Equity 

What Is Brand Equity and Why Is It Valuable In Business? | by Inkbot Design  | Medium

Your company needs increased market share and valuation, which will be gained by brand equity. The following are the reasons why your company needs brand equity. 

  1. It serves as an intangible asset that can easily convert into cash in times of need, or it can be leased or licensed for the profit of the company.
  2. Positive brand equity helps the company to generate more revenue by charging more money than other companies.
  3. It helps increase the share of the company’s market as consumers become loyal to the particular brand, and the company gets a large consumer base.
  4. The cost of marketing and launching new products gets reduced as the brand is already famous.
  5. The products and services get improved and more relevant as the experience of stakeholders increases with the brand. 

In brief, brand equity endures vital importance for a business. This is because it not only enhances the market share of the business; it also expands its estimate within the market place.


I would like to conclude by saying that the management of your brand in a company needs brand equity as it creates brand loyalty and adds value to it in the market.

The growth and success of the company are directly related to it. You need to manage your brand efficiently to prevent it from brand decay.

It is a strategy used to differentiate your products from competitors and other brands, and it creates competitive barriers that provide you with a meaningful competitive advantage in your industry.

Brand equity is casting in the long term, which needs detailed strategy and marketing investments designed precisely. It is a reliable and valuable asset. 

You need to put marketing efforts, and the managers need to find out the plan to manage the brand to create its highest value in the market.

You need to make investments in the advertisement, sell brands to retailers with reputation, reduce the use of paid promotions, and intensify the process of distribution in the market to make your brand more powerful.

Also You can Read our Blog on How To Calculate Customer Value, Satisfaction & Loyalty | Complete Guide


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