What is brand equity? Models and examples to understand its value

Brand equity is a fundamental concept in the world of marketing and business. Understanding it is crucial for companies seeking to differentiate themselves in a competitive market and maximize their profitability.

What is brand equity?

The term brand equity is translated as “brand value” and refers to the additional value that a brand brings to a product or service due to the perception, recognition and loyalty that consumers have towards it. You could say that brand equity is the loyalty of a consumer whatsapp marketing service towards a given brand.
In fact, this value influences the perception of consumers and, therefore, also has an impact on the price they are willing to pay. It is a characteristic that helps brands stay ahead of the competition and gain greater market share.

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Components of brand equity

To achieve a product or service that our customers love, we need to follow a series of guidelines that will be key when it comes to impacting the audience:

Brand recognition

This element is what makes it easier for us to remember the brand: a smell, a taste, a sound… any sense is useful to make our brand easy to remember and identify. This is where neuromarketing comes into play, allowing us to understand our consumer’s reactions in order to decide which path to take.
An example is the sound of potato chips. If we buy the Ruffles brand, the texture and sound will be different from those of the Pringles brand. The same goes for the taste of Coca-Cola and Pepsi: both brands, without their logo, can be recognized by the sense of taste.

Brand Associations

At this point, the characteristics and values ​​that consumers associate with the brand stand out. Quality, innovation, proximity, happiness… any value that we associate with the brand and that we achieve through actions, communication and advertising.

Quality

It is not enough to be; you also have to appear. Customers consume through their eyes in the first step and then through the rest of their senses. Our products have to be of quality, but they must also appear to be of quality at first glance in order to attract consumers.

Loyalty

As we have discussed, loyalty is the final step a brand takes with its customers. If we manage to create a bond that goes beyond the purchase, the frequency with which consumers will choose our product will be much greater and they will be more likely to repeat.

Brand equity models

There are several models developed by experts to measure and manage brand equity. Below we review the most prominent ones:

David Aaker

The concept of brand equity is not new, as David types of accommodation in the hotel industry Aaker already talked about it years ago. His model is identified with the five dimensions that we have already defined:

• Loyalty.
• Recognition.
• Quality.
• Association.
• Other brand assets (patents, copyrights and brand relationships).

Aaker’s proposal explains that a strong brand must manage and improve each of these dimensions if it wants to increase its value.

Kevin Lane Keller

Kevin Lane Keller was the developer of the brand resonance pyramid structure. Here we find four levels:

• Brand identity: This is about defining who you are so that consumers know the brand and remember it over time.
• Brand Meaning: This is the what, i.e. the performance and images that show the product or service being offered.
• Brand response: This refers to the consumer’s perception line data and responses or what they feel and think when the brand comes to mind.
• Brand resonance: The last level is loyalty, where the consumer already has a bond and a deep emotional connection with the brand.

Interbrand

This evaluation model was designed to calculate the monetary value of a brand and three aspects are measured:

• Financial results.
• Brand influence on purchasing decisions.
• Brand strength to continue generating value over time.

In conclusion to this article, we can say that brand equity is a very important business strategy for a company.

1. Loyalty and repeat purchase.
2. Pricing power.
3. Reduction of marketing costs.
4. Greater resistance to competition.