Brand Management

What is 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. It represents the overall value of the brand in the
market.
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, brand loyalty,
brand association etc. It is mainly subjective and qualitative but can be
represented quantitatively.
Brand Equity is driven by marketing strategy & efforts over the years and
consistency which results in customer perception and brand knowledge which
may be positive or negative.

Elements & Components of Brand Equity

Brand equity is a function of several other qualitative parameters which a
customer can associate with a brand.
Some of the main components or elements of brand equity are as follows:
1.Brand Image
The image which is formed in customer's mind. Brand image is the most
important parameter when it comes to creating brand equity.
2.Brand Identity
The image what the company is trying to form. Brand identity is created by the
company to try to form positive brand image but it depends on how customers
perceive.
3.Brand Awareness
Awareness is what is the level of awareness about a brand on products and
services. Awareness should be high for good brand equity.
4.Brand Loyalty
How loyal is customer to the brand and will buy the products again even if
options are there.
High brand switching can lead to less brand equity.
5.Brand Association
Does the customer associate brand to a positive attributes or not? Sometimes
association something existing like event or celebrity can contribute to brand
equity.
6.Customer Perception
What is the overall perception and experience of the
customer related to the brand?
Since brand equity gives a qualitative outlook, it is
quite complicated to define it through numbers or a
value.