Brand Equity

What Is Brand Equity? Key Elements & How Most Brands Use Them

Branding 5 Mins Read
published on: 18 September 2023 last updated on: 18 December 2023

A brand’s general perception to their target audiences matter gravely when it comes to expansion and doing well in competition. As the world of the internet expands more, the perception of a brand is becoming increasingly important.  That is when brand equity starts to become important for a brand. 

According to data, 74% of customers nowadays are concerned about how a brand treats their customers, employees, and creates their work environment. 

So, if you want to keep your brand ahead in the competition, it is necessary to build a good brand equity. Please read this article to learn more about brand equity and why it is so important for a brand. 

What Is Brand Equity?

What Is Brand Equity

One cannot explain the term brand equity with only the brand in mind. The consumers and the audiences are the key parts of brand equity. The term refers to the influence the brand has on the mind of their audience or their consumers. A good brand equity refers to the value of a brand and the degree to which they are identifiable to the audiences. 

A brand has to create positive experiences for their buyers enticing them to keep purchasing from the brand and become recurring customers.  The common practice for generating brand equity is through campaigns that convey their message to the target-consumer values. They also make promises and ensure qualifications when their target audiences buys from them. Their other initiatives include establishing loyalty and retention efforts. 

Why Is Brand Equity Important?

Building and establishing a positive brand equity has several benefits. Brands that build a better brand equity have a higher chance of generating better ROI and doing better in terms of competition. 

Organizations better equipped to leverage their branding can potentially generate better revenue compared to their competitors. Not only are they earning more, they also comparatively spend less in advertising ,mproduction, and regarding other operational costs. 

Also, a brand with a better brand equity can charge a higher price rate to their products. It is because the customer is aware of their products and services, they are bound to pay more to get the services and products from the brand they like.

Also, if the brand is willing to add a new product line under the same brand umbrella, the new product can do  well in the market. They have their pre established reputation of the previous products to thank for that. So, once a company develops itself as a brand they can launch new products  and services and succeed. 

However, an immense amount (80%) of consumers do not want to buy from a brand they do not trust. So, it is needless to say how important brand equity is. 

Four Key Elements Of Brand Equity

Four Key Elements Of Brand Equity

Famous American Organizational theorist named David Aacker created a model featuring the different crucial elements of brand equity. Here is a complete break down of the same –

Brand Awareness

It is important for the consumers and the audiences to be able to easily identify your brand. The messages, and the imagery you set around your brand should be cohesive and simple to understand. That way your consumers will be able to identify the brand easily even if you are launching a new product in the market.  So, ask yourself about the questions like – what values are your brand adding to  your consumer? Is it quality of product, its sustainability, or is it family friendliness? 

Brand Attributes

How was the first hand experience with the brand? Some areas of it would include a good performance for a product according to the company’s expectations. And the performance encounter with the brand representatives and the team of customer service could be worthwhile. 

Perceived Quality

The term perceived quality suggests the customer’s tendency to judge the quality of the product based on the overall experience the product provides. In general, the product might be good enough. But the audience might have a different perception of the product. They may have a negative past experience with the product. 

So, they end up having a wrong perception and do not react positively to the brand anymore. But, a brand can elevate its perceived quality through better customer experience and boost their sales. 

Brand Loyalty

Brand loyalty has few layers and it involves the customers’ past and present experience with the brand. The brand awareness and the brand attributes are also key elements of brand loyalty. One can take brand loyalty as customer preference. When a brand is building up on the previously mentioned qualities of a brand, they will eventually build brand loyalty. With ease. A brand has better control over their customers and can influence the customers better when they have a strong brand loyalty. 

A brand needs to combine and build upon all of these elements. The process requires focusing on the customers which in turn focuses on them. When the brand has built all of these elements, they will, in turn build a better brand equity. The perception of their current and potential customers will increase thanks to their brand equity being increased. 

How Does A Brand Develop Their Brand Equity Organically?

A brand can carefully devise a plan and develop their brand equity. But, that does not always have to be the case. Some brands can organically develop their brand equity. They can manifest their brand identity while facing outside influences and tremendous competition. 

However, if a brand has to build their brand equity then they can start by focusing on these parts –


The awareness phase makes the customer of the brand come into constant contact with the brand’s product and the services. 


The brand can make the target customer recognize them when the customer comes in contact with the customer again. This can happen both online and offline. 


Once the target customer identifies and recognizes the brand, they start to be interested in the brand more. Through the continuous process of interaction, the customers become comfortable with the brand. They might want to give the services or products provided by the brand a try. 


When the customer has a good experience with the brand, they keep preferring it over other brands. 


When the brand is able to build loyalty among the customers they can expect the customers to recommend them to other potential leads or customers. This way, not only the brand has a better retention rate, they are also expanding themselves through mouth to mouth marketing.

Bottom Line 

When a company is developing itself as a brand they need to stick to and improve the key elements that boost the brand equity. But, as per the processes are concerned, a brand can follow the practices most brands follow. Once you have gone through this article, it will be easier to understand the practices most brands follow to build their brand equity. 

Read more of our articles to learn about topics like brand identity, brand awareness, and brand loyalty etc.

Read Also:


Brand Awareness Brand equity brand management brand marketing

Shahnawaz is a passionate and professional Content writer. He loves to read, write, draw and share his knowledge in different niches like Technology, Cryptocurrency, Travel,Social Media, Social Media Marketing, and Healthcare.

Leave a Reply

Your email address will not be published. Required fields are marked *

may you also read

Brand Personality
trade show booth design
Brand's Visibility