Brand equity refers to the value and strength of a brand that it has built over time within its target market. This value is derived from consumer perceptions, experiences, and associations with the brand, which can influence their buying behavior. A brand with high equity is recognized for its quality, reliability, or other positive attributes, and it often commands customer loyalty, allowing it to potentially charge premium prices compared to less established or lesser-known competitors. Brand equity is built through consistent marketing efforts, delivering on promises, and maintaining product quality. It encompasses several components, including brand awareness, which is the extent to which consumers are familiar with the brand; brand associations, which are the qualities and attributes consumers think of when they hear or see the brand; perceived quality, which relates to the consumer’s judgment about a product’s overall excellence or superiority; brand loyalty, which is the tendency of consumers to continue buying the same brand repeatedly; and other proprietary brand assets like patents, trademarks, and channel relationships. These elements of brand equity contribute to a brand’s market share, enable it to retain and attract customers more effectively, and provide a competitive advantage. Ultimately, strong brand equity translates into financial benefits for the company, as it can lead to greater sales volume, higher margins, and increased shareholder value.
