What is Brand Equity?

Brand equity is the value of a brand in its ability to attract and retain customer loyalty.

Brand equity is developed over time. It results from a brand's ability to provide value over and above what it costs to acquire and maintain customer loyalty.

Brand equity can be calculated using the discounted cash flow method and the residual income method. Professor Robert Cialdini popularized the residual income model in his book "Influence: The Psychology of Persuasion."

Frequently Asked Questions For Brand Equity

What is brand equity?

Brand equity term used to describe the value of a company's brand. It can be thought of as the total sum of all assets and liabilities related to a particular brand.
Brand equity includes tangible assets, such as trademarks and patents, and intangible assets, such as goodwill.

What is an example of Brand Equity?

The Coca-Cola Company is an excellent example of brand equity in action. The company has been producing soft drinks for well over 100 years, and has built up an immense amount of goodwill with consumers around the world. According to Interbrand, Coca-Cola's brand value in 2017 was $79 billion USD.

How is Brand Equity measured?

Brand equity can be measured in different ways and can take into account other aspects such as:

  • The perceived quality of a product or service
  • The financial performance of the company that owns the brand</li?
  • The public’s perception of a company’s environmental and social responsibility
  • The level of customer satisfaction with a product or service