Brand Equity | A Complete Guide

Before going to the definition of brand equity, let me ask you a few questions.

How many of you search for online reviews while purchasing a Titan wristwatch? Or how many people have doubts on excellence of Amul products?

Possibly there would be hardly any.

This is because these brands are known for their quality, and there is no point in wasting time checking reviews for their conventional products.

Moreover, people are ready to shell out higher amounts for obtaining products of these brands.

What makes people do so? The answer is quite simple.

These business entities have added incredible value to their brands, building trust among people, providing superior quality products for years.

This trust and common perception for a brand are known as brand equity.

According to Philip Kotler, “Brand Equity is the added value endowed on products and services. It may be reflected in the way consumers think, feel and act with respect to the brand. As well as in the prices, market share and profitability the brand commands for the firm”.

Importance of Brand Equity

It has been proven that brand equity plays a vital role in price structure. Herein discussed why brand equity is significant for business.

Universal Recognition

Brands that have universal recognition always stay ahead of their competitors. This helps brands dominating the market price. People eagerly pay more to obtain latest editions of reputed brands rather than settle for less with competitors.

Easy to Extend

Extending business becomes easier for the reputed brands. For example, Fortune, the edible oil and foods segment of Adani Group, started their business with cooking oil. Now they have a range of food products in the market.

Reduces Marketing Efforts

Do you often see adverts for Reebok shoes?

It is the importance of brand equity. These businesses don’t need to spend huge bucks on spreading brand awareness.

Ways to Build Brand Equity

Building brand equity implies creating a brand image that can be strongly differentiated from other equivalent brands available in the market. It hugely depends on customer perception.

In other words, brands that manage to gain the recognition of people for their supreme quality work can build positive brand equity.

Here are the basic steps to build brand equity.

Step 1: Spread Brand Awareness

In this internet era, it is not strenuous to hype your brand name, spreading brand awareness. Nonetheless, before starting the marketing campaign, you need to focus on its logo. The company logo should be presented everywhere you want to promote your brand name as it is the face of your business.

When it comes to promoting a brand name, the options are endless. Xiaomi, the leading smartphone manufacturing company, had used social media marketing tactics, spreading brand awareness. Here are a few trending techniques you may follow to create your brand identity.

  • Use social media sites to connect with your audience
  • Build an aesthetic website
  • Share the story behind starting your business
  • Offer valuable content regularly, making sure they are sharable
Step 2: Meaning

In this step, you need to communicate the meaning of your brand. The two main pillars of the meaning step are


Naturally, performance means your ability to meet the expectations and needs of customers. To make people aware of your products or services, you need to explain the product features, price, design, and durability.

Additionally, you need to utilize the unique selling point (USP) of your business here. This way, you may let the audience know how your business is superior to the available equivalents in the market and how it can solve their problems.


Imagery means fulfilling the needs of customers meeting the social responsibilities. If a company produces quality products, keeping in mind the onus towards society gains loyal customers.

Companies should pay attention to the environment while conducting business operations to create a good image in society and customers.

The brand emphasizes imagery aspect eventually gains recognition of people believing in the same values.

Step 3: Response

This step of brand equity is related to the response of the customers regarding your product or service. It is basically the perception of your audiences that builds out of their judgment and feeling.

Through judgment, customers deduce the product or service on 4 parameters, such as


Quality includes its functionality, performance, durability, etc. These aspects determine whether the quality is up to the mark or not.


The credibility of a brand depends on its attractiveness and strength. In other words, whether it can provide consistent performance or not. It is judged on how innovative and trustworthy the brand is.


Consideration means to what extent it can serve the expectations of customers.


It is a competitive matrix to evaluate whether the products or services of an organization are prevailing than competitors.

Brands can influence the judgment of their customers, achieving expertise, improving their product or service quality over time.


The feeling is concerned with how excitement, warmth, and security your audiences perceive regarding your product.

Suppose, when Apple announces the launch of their new iPhone, people obviously get excited to know about new features Apple has included in it.

The feeling can be influenced by connecting and communicating with the target audience through social networking sites, forums, email outreach, etc.

Step 4: Resonance

This is the most vital step of building brand equity. Resonance refers to developing a strong and long-term relationship with customers.

This level of branding is achieved when your customers stay connected with your brand, even when they don’t need your products. They not only purchase your product or service often but also create a community with other customers and associations. They actively participate in chats, events, and act as ambassadors of your brand, referring your name to their networks.

Besides purchasing your product or service often, they create a community with other customers and associations of your brand.

Following tactics may help you to attain this toughest chore.

  • Market your unique selling point
  • Make your customer support service stronger
  • Actively respond your target audience on social media platforms
  • Encourage consumers for giving feedbacks
  • Provide discounts or incentives to repeat customers
  • Create community forums to understand their expectations
  • Enhance customer experience before as well as after purchase

Factors Affecting Brand Equity

Customer perception is the core of brand equity.

Several factors can impact the opinion of the consumers. A pleasant or unpleasant customer experience can lead to positive or negative brand equity.

However, most of the time, people possess a negative outlook regarding a brand without using its products or services.

In fact, 86% of consumers admitted they look for the authenticity of a brand before opting for their services.

Here are the factors that impact brand equity.


The quality of a product or service is the prime determinant of customer perception. Quality includes several factors such as its features, functionality, durability, etc.

A product must have all these attributes to be a supreme quality product. Suppose you purchase a DSLR camera with good features, doing a satisfactory job. However, it lasts only for three months. Obviously, you won’t be happy with its performance.

These factors provide a long-term impact on the mind of consumers and their future decisions.

Customer Support Service

Often this service comes into the limelight when consumers lodge complaints against a product or service. Despite this, a responsive customer support service can change the lookout of the customers.

When consumers get a quick and effective response from the representative of a company, they are likely to trust that brand. And perhaps they may consider those brands for their future needs.


The effect of price on the consumer’s perception is fickle. People often compare prices on several sites to get a product at the most reasonable price. However, buyers generally ignore products with too low prices.

On the contrary, expensive products are usually considered high-quality. But if people don’t find it worthy enough, such overpriced products will provide a negative impact on the brand.


Product packaging hugely influences the purchase decisions of buyers.

A survey proves, 81% of buyers try a new product seeing its attractive packaging.

Furthermore, 40% of consumers share the image of the product on social media if the packaging is unique or the product is branded.

To make your product packing alluring, you need to emphasize on following aspects.

  • Innovative designs
  • Eye-catchy color
  • Attractive layout
  • Packing material quality
  • The shape of the package
  • Striking graphic design

An appealing packaging not only triggers the number of sales but also helps you to get referrals.
Brand Reputation
Of course, positive remarks on social media platforms, scores of client testimonials on the website, or numerous boasting reviews help in building the reputation of the brand. It influences the perception of the buyers significantly. People used to trust such brands and were likely to purchase products from such businesses often.
How to Measure Brand Equity
As discussed above, the value of brand equity is greatly associated with customer perception. Hence, it is quite difficult to assess this value.

Basically, there is no comprehensive formula to measure brand equity. Marketers use the following factors to estimate the value of a brand.

Customer Awareness

Customer awareness refers to how your customers are knowledgeable about your brand. Whether your audiences know what exactly your product is or how it can help them to solve their problems.

To understand whether your marketing campaigns are conveying the correct message to your target audience or not, you may conduct a survey regarding your product.

Evaluating survey answers will enable you to figure out the consumers’ perceptions regarding the functionality and usability of your product.

Brand Engagement

Through brand engagement, marketers try to estimate how target audiences are acquainted with their businesses. It is the emotional matrix of the consumers. It is vital to evaluate whether your prospects are pondering your product or service. Some of the determinants for this are

  • Shares and mentions on social media
  • Website traffic
  • Discussions on forums
  • Number of searches regarding your products

This approach will enable you to understand how successful your product has been in capturing the mind of your audience.

Brand Value

It is a traditional method of measuring the value of a brand. For this, you need to calculate the total amount spent on the brand from the date of incorporation. It includes all costs incurred for registration, licensing, trademarking, production, and promotion. The actual expenses incurred need to be calculated as per the current cost to find out the worth of the brand today.

Customer Preference

Customer preference is the ultimate determinant for evaluating brand equity. This metric stands on people’s purchase and repurchase decisions.

This is basically a measurement of whether your target audience will consider your brand on the next opportunity or whether your existing customers come back to you often.
Here are the things that influence customer preference profoundly.

Competitiveness refers to whether the products of the brand fulfill the needs of the consumers, and to what extent customers find uniqueness in those goods. It can be identified based on two crucial factors.
Quality and usability are the most important factor to retain buyers. People search for high screen resolution while purchasing a TV. Thus if you sell smart TV, the product should have excellent picture quality, ultra-sleek design, 4K ultra HD resolution, HDMI ports, and so on.
When you and your competitors are selling the product with the same features and functionality, you need to focus on some uniqueness that your competitors don’t provide.

Well in the case of a smart TV, all the manufacturing companies produce the same featured TV. Now you can give more useful inbuilt apps on the TV that your competitors don’t provide to make your product exclusive.
Emotional Connect
While purchasing a product, people often pay some extra bucks to avail the best brand. If after using such a product customers feel it is overpriced, they can switch to the competitors. Now if they find the competitor is giving a higher value at a lower price, they get emotionally connected with the brand and become loyal customers.


Suppose you have the best quality product to offer your customers. With your surefire marketing strategy, you successfully landed them on your site. But if they find your products are out of stock or you deliver your products to some selective areas, you will lose loads of potential customers. Thus, you have to be available immensely and vastly.

Financial Metrics

It is the most practical and simple way to measure brand equity. For this, you need to evaluate the financial position of your brand in the market. Additionally, you need to do a comparative analysis of your brand with the competitor. It is estimated based on

  • Percentage of sale of your products as compared to the total sale of your type of products in the market
  • Your products’ potentiality to set a price higher than the average market value
  • The possible growth rate your company can achieve in feature


Some Parting Words

Very few companies can dominate the industry and their competitors. And fewer of them can create a monopoly market.

Business entities can achieve a positive brand equity providing excellent services to their customers consistently over the years. In this guide, you can get an idea on how to increase brand equity and different ways to measure it.

While assessing the value of brand equity, make sure you separately measure your brand value. Brand value is the total assets of your business that you record on your balance sheet. This value should be considered during the assessment of brand equity value.



Saurabh Upadhyay

Saurabh Upadhyay holds a bachelor degree in Hotel Administration. But this isn't what he does! He is passionate about making marketing strategies that help businesses evolve. He constantly keeps searching for new market areas for expansion and finding how implementation of digital marketing strategies can change the game. In his vacant time, he loves to read books specially autobiography genre and writing.

Comments (2)

  1. img-3
    Digital Marketing Institute in India
    August 31, 2023 Reply

    Thank you for sharing this valuable article and it was super easy to understand.

  • img-4
    Vikas Yadav
    August 31, 2023 Reply

    Thank you for the feedback!

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