Glossary of Branding Terms

Brand equity

What is brand equity?
Brand equity is brand capital – added value that a brand has in the perception of customers.

How is brand equity quantified?
To determine brand equity, various dimensions are examined on the basis of studies: brand awareness, associations, preference, brand loyalty, brand experience, and perceived quality.

What does a brand equity study reveal?
A brand equity study provides valuable insights for the strategic management and development of the brand. With the help of a brand equity study, companies can identify strengths and weaknesses and make strategic decisions to improve brand positioning.

Why is a brand equity study often more helpful than a purely financial valuation of the brand?
The financial valuation of a brand focuses on existing and expected sales and profits over a certain period of time.

A brand equity study also captures the non-monetary value of the brand. For example, it determines brand perception, associations, customer experiences, emotional attachment and brand loyalty: all factors that influence brand value over the long term.