Brand Equity

What is Brand Equity?

What is Brand Equity?

Brand equity is the value created around a product that can be either positive or negative. This value is determined by how well customers view a product’s quality, cost-effectiveness, and usefulness. Positive brand equity for a product means that it is fit for purpose, high quality, and priced accordingly for its target market.

How to Build Brand Equity Through Marketing?

Before building brand equity around a product it is important to build a great product for a defined audience. Consult focus groups to find out why customers like your product, and discover what people are saying about your product online. Once you understand why your product is beloved you can start to build equity around it.



There are many ways to build value for a product through PR, marketing, advertising, sales, and more. The most widely used ways are:

When you have a new product it is impossible to have positive brand equity without creating a launch campaign to introduce it to the world. Spend time and money on gaining sales momentum through PR and advertising at this stage of the product lifecycle which will establish your product with your target market.

  • Recognition: Brand Awareness

Once your product has been introduced to your market and people start to talk about it, it is important to build hype around it. Begin creating content around your product and the solution that it provides so that potential customers receive the right information to choose your product over a competitor’s offering.

Once your product is known and valued among your target market you can start to push it out to peripheral markets using its positive equity score to help grow loyalty and increase referrals. Using influencer marketing to break into newer markets is a great first step and maybe even experiment with video recommendations of customers to strengthen your sale collateral.

Why is Brand Equity Important to a Company

Brand equity summarizes the value of a brand for a company. This is important to a company as it can highlight if there are any issues with a product or where a product could be lacking. This can also help companies to understand where a product stands in relation to competitors.

There are two types of brand equity to measure:

  • Positive Brand Equity: This can mean that a company can charge a premium on their product as customers are willing to pay more for it.
  • Negative Brand Equity: This can lead to a company identifying serious shortfalls in their product development and can help to improve a product in the future.

Brand Equity Examples

Brand equity is a hard thing to equate but there are some signs that state quite definitively that your brand has positive or negative value. Below are some of these examples:

Positive Brand Equity Example:

Apple has had positive brand equity for many years now that have led to huge customer lines forming at launches for their new products year after year, even when products have sometimes been subpar. Apple receives this great equity score due to its superior products and the simplicity of design that is hard to tarnish.

Negative Brand Equity Example:

Uber has been in the news many times about different things but one of the most damaging things was their increase in charges during holiday periods for customers. Uber users experienced increases of up to 8.9% higher than at other times of the year. This negative encounter has stopped some of its customers using the service completely.

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