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Brand Equity

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What is brand equity?

Brand equity is a marketing concept that describes the value that comes from people’s perception of a brand. If customers think highly of a company, that company has strong or positive brand equity. On the other hand, if a company is unpopular or doesn’t live up to customer expectations, it will have negative brand equity.

Why is brand equity important?

Brand equity is critical to the value of a company. 

While factors like great product quality and smooth service are important, how your business is perceived by customers is just as vital to success.

By having strong brand equity, a business can become synonymous with the product they sell, even if that product is available elsewhere.

Here’s how positive brand equity can provide value to a company:

  • They can charge a premium price for their product or service. Often, companies with strong brand equity are not doing anything unique, but users see their version of a product as superior to cheaper alternatives.
  • They can launch new products with ease, and in turn, boost sales volumes. If customers perceive an existing product line as being trustworthy, high quality, and valuable, they will want whatever else the company has to offer.
  • They can retain a loyal customer base. Marketers know that it’s cheaper to hold onto an existing customer than it is to attract a new customer. With positive brand equity, customers are more likely to stick with a company. 

Examples of positive brand equity 


Apple is always referenced as a great example of positive brand equity. 

Pretty much all of their products have an unrivaled reputation for perceived quality, innovation, and style. They sell things that are integral to people’s lives, which makes their offer irresistible to loyal customers.

Their customer service proposition is also globally renowned. 

Advisors are always available in stores to help remedy issues, and there’s an online community of users ready to assist with more immediate problem-solving.

You’re guaranteed to see shoppers queuing around the block for their next Apple purchase, ready to pay a premium for a widely available product. 


The term ‘cult following’ can definitely be applied to Nike, a sports brand name that’s loved around the world.

Nike’s customers are unwavering in their loyalty for the company and its products, giving it immensely positive brand equity that has lasted for years.

Perhaps the greatest strength that Nike has is its ability to inspire. The company’s ‘Just Do It’ slogan is a clear call to action that makes people dream big and feel supported by the brand.

Paired with inspirational marketing campaigns, this slogan pushes Nike customers to perceive Nike products as essential to their lives.

With a strong community behind it, Nike has been able to elevate itself from a sneaker store to a desirable lifestyle brand.

Examples of negative brand equity


Often a company with a loyal following can see its brand equity plummet almost overnight.

That’s the case with car manufacturer Volkswagen, which admitted to falsifying emissions data for its diesel-powered cars. 

Now widely known as the ‘Volkswagen emissions scandal,’ the cheating cost the company billions of dollars in fines, compensation, legal fees, and future revenue. 

It damaged Volkswagen’s long-held reputation as a trustworthy brand whose principles were in line with its customer values.

Regardless of how durable the brand’s cars are, Volkswagen’s brand equity took a huge hit after they falsified some really rather critical information.


Oil companies aren’t ever likely to have the most pristine reputations, but BP suffered a catastrophic blow to its brand equity back in 2010 following an oil spill. 

The spill killed 11 people, inspired a film, and continues to cause damage to wildlife to this day.

Named Deepwater Horizon after the rig where the disaster unfolded, this was the biggest oil spill in history. 

BP placed a lot of the blame elsewhere following the incident, which did irreversible damage to its brand equity. It was also accused of playing down the severity of what happened.

With damage to miles and miles of ocean habitat lasting for years after the event, it’s safe to say that many people’s perceptions of BP are permanently negative.

How to develop strong brand equity

Attaining brand equity doesn’t happen overnight; it is a journey worth taking. 

Marketers will often reference Keller’s Brand Equity Model as a good framework for building a strong brand. 

Marketing professor Kevin Lane Keller devised the model as a four-step pyramid process  in shaping your audience’s perception from the bottom up:

  • Identity. This is about drawing attention to your brand.
  • Meaning. The goal here is to communicate what you stand for.
  • Response. This part focuses on customer judgments and feelings about your brand.
  • Resonance. Then, you start to build relationships with your customers.

Here’s a little more detail about the steps that you can take to create brand value.

1. Identity

First up, work on getting your target audience to recognize your brand. To boost brand equity, you need to have a solid brand identity.

There are layers to creating brand awareness through your identity, from storytelling to the logo, color palette, and tone of voice.

Essentially you want customers to talk about you and promote your brand positively through word of mouth. 

You can convey your brand identity by:

  • Keeping visuals consistent across every channel you use and every product you sell.
  • Sharing a clear value proposition and telling your story.
  • Maintaining great communication on social media and marketing emails.
  • Ensuring first-rate customer service at all times.

2. Meaning

Here’s where you need to give some context to your brand and demonstrate what your company stands for. 

You’ll already know who your target audience is, so focus on gaining their loyalty by showing how much they need what you’re selling.


Identify the key selling points of your product. Is it something reliable and long-lasting? Does it have an amazing range of features? 

Pinpoint how your product meets your customers’ needs based on what you know about them.


A lot of buying decisions are based on psychological wants and needs. Tap into what makes your target audience feel good and check that this is reflected in your brand imagery.

Shoe brand TOMS is well known for having a socially responsible brand image. Their long-running ‘Giving’ campaign ensures a slice of their profits is given to vital causes.

The company markets this campaign as something their customers are having a direct impact on, which in turn makes customers feel great and want to stay loyal.

3. Response

Like it or not, people will always be making judgments about your brand. It’ll also evoke feelings – it’s a factor you can’t control, but you can definitely influence these responses.

Customer judgments can generally be split into four categories:

  • What your quality is – or what they think it is
  • How credible you are, in terms of expertise, trustworthiness, and likability
  • Whether your product or service is actually relevant to them
  • How superior your brand is against your competitors

Think about how you can improve and enhance these judgments. Focus on marketing strategies as well as on the actual products or services you’re providing.

Could they be better?

4. Resonance

This is the hardest part to get right when it comes to shaping consumer perception, which is why a lot of companies fail at having positive brand equity.

Resonance is achieved when your customers feel a deep bond with your brand. Like every relationship, it’s a two-way street:

  • Build a community for people to interact with you and other users. Maybe have a help forum on your website, hold events, or share user-generated content.
  • Give gifts with purchase, or send personalized emails after each transaction. It’s nice to show gratitude.
  • Champion the people who champion your brand. Those early adopters and repeat customers will be vital in strengthening your brand equity. 

Written by

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Olivia is a writer for Zyro and an eCommerce know-it-all. Having spent many years as a retail buyer, she loves writing about trend forecasting, brand building, and teaching others how to optimize online stores for success. She lives in London and spends a lot of time exploring the city’s parks with her whippet.

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