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Understanding Brand Equity: Building and Boosting Your Brand's Value

Your brand is like a puzzle, made up of different pieces. These include things like what your brand stands for, your goals, your unique voice, and style. Together with the products you offer, these pieces tell your customers who you are. They can also stir up feelings in your customers, either good or bad, that leave a lasting memory. This memory can play a big role when they’re deciding what to buy next time.

This memory turns into something we call brand equity, which is like a price tag on your brand. Let’s go deeper into this idea.

What is Brand Equity?

Brand equity is the extra worth that a brand name gives to a product. It’s how much value a customer sees in a famous brand name. This means that well-known brands tend to do better, not because their products are better than the rest, but because people know and trust their name.

Let’s picture this. A customer is shopping for coffee and needs to choose between Brand X and Brand Y. Both brands offer the exact same coffee, but Brand X costs £1 more than Brand Y. The customer knows Brand X, has had good experiences with it, and knows that their family and friends buy it too. But they don’t know Brand Y. So, the customer chooses Brand X’s coffee, even though it costs more.

In this case, Brand X has positive brand equity. The customer chose Brand X over Brand Y only because they valued the brand name. The extra value here would be £1, as the customer was willing to pay an extra pound for Brand X.

Why is it Important?

The story above shows that brand equity can be worth real money for companies. Positive brand equity gives your company a big leg up on the competition. It can lead customers to pick your brand over others, and they may also be willing to pay more for it.

With positive brand equity, you can:

  • Sell more products – With the leg up that comes from positive brand equity, you’ll make more sales and money.
  • Start new product lines confidently – When customers know and trust your brand, they’re more likely to try out your new products.
  • Earn respect in your field – Brands with positive brand equity are respected, not only by their customers, but also in their industry.

Brand equity can be very helpful for brands and shouldn’t be forgotten. To build positive brand equity, you’ll need to look at different parts of your brand. Let’s see how.

How to Build Positive Brand Equity

Before you can measure and manage brand equity, you need to know what it’s made of. We’ve learned that brand equity is the extra worth that comes from having a famous and respected brand name. So, you need to look at the parts of your brand that make your name famous and respected.

Some of the most important parts of brand equity are:

Brand Awareness

How familiar people are with your brand, or brand awareness, is a big part of brand equity. It’s easy to get brand awareness mixed up with brand equity. They’re closely connected, but they’re not the same thing. Brand awareness tells you how many people know your brand. Brand equity is the extra worth your products get because people know your brand.

Perceived Quality

What customers think of your product can greatly impact their decision to buy it. If they think your product is good quality, it can boost your brand equity. Plus, customers are usually willing to pay more for a product they think is high quality, letting you charge more.

Brand Association

The traits customers link to your brand, or brand associations, also boost brand equity. These associations help customers spot your brand and tell it apart from others. For example, you might link McDonald’s with its big golden arches. When you see these arches outside, you know you’re at McDonald’s. This association sets McDonald’s apart from the restaurant next door.

Brand Loyalty

Building loyalty is a key part of brand equity. The more a customer sticks to your brand, the less likely they are to switch to another brand. Brand loyalty shows a preference for your brand and adds to its worth.

How to Understand Customer-Based Brand Equity: Keller’s Model

Customer-based brand equity is the idea that a customer’s views and feelings about a brand directly affect how well the brand does. Keller’s Brand Equity Model is a famous CBBE model that shows how a brand builds CBBE. The model is a pyramid that lays out the steps to build a good relationship between a brand and its customers.

At Level 1, ‘Brand Identity,’ you set out what your brand stands for and make promises to your customers.

Then at Level 2, ‘Brand Meaning,’ customers learn about how your brand performs and looks, and form views of your brand.

At Level 3, ‘Brand Response,’ the customer’s judgments and reactions are considered.

Finally, at Level 4, ‘Brand Resonance,’ a strong bond is formed with the customer, leading to brand loyalty and the growth of brand equity.


Examples of Brand Equity


Amazon has become synonymous with convenience, vast selection, and fast shipping. The brand has managed to secure a place in the minds of consumers as the go-to platform for all their online shopping needs. Despite sometimes offering products at slightly higher prices, many people still prefer to shop at Amazon due to their trust in the brand’s reliability, customer service, and speedy delivery. This is a clear example of how strong brand equity can influence consumer behaviour and choices. Nike is a great example of positive brand equity in the clothing industry. Over the years, Nike has built an image of quality, innovation, and performance, leading consumers to associate the brand with athletic success. The recognisable “swoosh” logo and “Just Do It” slogan instantly evoke a sense of aspiration and determination. Despite often being priced higher than competitors, many athletes and fitness enthusiasts still choose Nike because they trust the brand and align with its values.

McDonald’s has significant positive brand equity. The Golden Arches are recognised globally and are associated with consistency, speed, and affordability. No matter where in the world you are, there’s a comfort in knowing that a Big Mac at McDonald’s will taste just like it does at home. Despite the fast-food market being saturated with numerous brands, McDonald’s continues to attract a large number of customers due to its strong brand equity.


BP (British Petroleum). After the big oil spill in 2010, BP saw a big drop in brand equity. The company’s failure to stop the disaster and the harm it did to the environment led to a big loss of trust and respect, hurting their brand equity. Snapchat faced negative brand equity after they redesigned their user interface in 2018. The changes made to the platform led to widespread criticism and even prompted an online petition for Snapchat to revert to its old design. Many users found the new interface confusing and less user-friendly, leading to a significant drop in user engagement. Celebrities like Kylie Jenner publicly criticised the new design, which further eroded the platform’s brand equity. Snapchat’s example shows how product changes that are not well-received by customers can lead to negative brand equity.

Understanding and managing brand equity is key for businesses. It’s not just about having a strong brand, but also making sure this brand leaves a good impression on customers. By building a strong brand, a company can get ahead, charge more, and do better in the market. Remember, your brand is not just a logo or a slogan; it’s how customers see you. So, investing in brand equity is investing in the long-term success and health of your business.