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What is brand equity?

Updated: Jul 27, 2018

One of the biggest problems branders face is that for most people it's pretty hard to understand the intangible elements or aspects, of branding. As a previous post on this blog mention, branding — executed by an identity system, the brand's logo and so on — is the tangible manifestation of the brand. When you build or work on a brand there are a lot of elements "left brained" people find hard to grasp. One of them is brand equity.

Since stock equity is a "numeric" concept, it's easy for business people to understand, mainly because it is a number - 50 stocks, 100 stocks and so on. Brand equity is not exactly the same because it is not something you can put an exact number on it.

There are marketers and branders that makes the concept of brand equity very hard to understand since they explain it using words such as experience, promise and so on, which others find amorphic enough. I think that a better way to understand what is brand equity is to think of value and price. Values are very important in branding but in branding and marketing, we usually don't talk about tangible values. To understand brand equity you should look at big brands with high positive brand equity such as Apple and Mercedes. They have high brand equity because customers are willing to pay a very high price to have Apple or Mercedes. It's important to understand - expensive products are not high equity brands! They are expensive products. Not every business or company that sells expensive products have high positive or even just high brand equity. It is not about the price or the product. Like anything else in branding - it is about people and their feelings, thoughts, and desires. Last week Bloomberg magazine had a segment about the fact that lately iPhone looks like it's tech aspect is in decline with the example of a "fragile" IOS system that needs constant upgrades. They wanted to know if it hurts the brand and ran a quick research. The research showed that more than 90% of iPhone holders say they will continue use iPhone in spite of a headache of ongoing updates they need to do recently!

That's brand equity! .



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