Brand equity is a marketing term that refers to the value of a brand, determined by the consumers perception of its quality and desirability. It is the worth of a brand in and of itself, which is the social value of a well-known brand name. Brand equity is a multi-dimensional and complex concept that comprises a consumers awareness of a brand, the associations they make with the brand, the way they perceive it, and the loyalty they have towards it.
Brand equity is created through consistent marketing efforts that establish positive experiences that entice consumers to continue purchasing from a brand over competitors who make similar products. A brand encompasses the name, logo, image, and perceptions that identify a product, service, or provider in the minds of customers. Brands with high levels of awareness and strong, favorable, and unique associations are high equity brands.
Positive brand equity has value, as companies with a great deal of brand equity can charge more for a product, and that equity can be transferred to line extensions, so a business can make more money from the brand. It can also help boost a companys stock price. On the other hand, negative brand equity occurs when a brand consistently under-delivers and disappoints, to the point that people recommend others avoid it.
