This blog delves into the fascinating concept of brand equity (also known as brand value)—the value that brands bring to businesses. We begin by introducing the basics of brand equity and, later, explore some great real-world brand equity examples.

What is brand equity?

Brand equity refers to the value a brand holds, beyond the product or service it represents. This value can be positive or negative, depending on how customers perceive the brand. When a brand is recognized and trusted by consumers, it adds value to the company and its offerings. This is called positive brand equity. On the other hand, if a brand has a poor reputation, it can lead to negative brand equity, causing potential harm to the business.

Advantages of brand equity

Strong brand equity provides several key benefits that can help a company succeed:

• Customer recognition: A strong brand ensures that a product or company stands out in a crowded marketplace, increasing visibility in an environment filled with media and advertising noise.
• Added value: Brands with strong equity add intangible value to their offerings. Customers are willing to pay more because they perceive additional benefits beyond the product or service itself. This enables companies to charge premium prices.
• Customer loyalty: Brand value leads to higher customer loyalty. Loyal customers are more likely to make repeat purchases and recommend the brand to others, which drives consistent sales.
• Competitive differentiation: A strong brand helps a company distinguish itself from competitors. By offering unique brand-added value, the company can create a strong competitive advantage, making it harder for competitors to replicate or match.
• Increased sales: A well-established brand often leads to increased sales. Customers are more likely to choose a brand they trust, even if there are cheaper alternatives available.
• Higher shareholder value: Strong brand equity can lead to long-term financial benefits, including an increase in shareholder value. This is because a brand’s value is reflected in the company’s stock price and overall market performance.

Disadvantages of brand equity

While brand equity offers many advantages, there are also some challenges and potential downsides:

• Constant need for innovation: Strong brands need to continue innovating to stay relevant. Without continuous improvement, even well-established brands can lose their competitive edge.
• High investment requirement: Building strong brand value requires significant investment in marketing, advertising, and maintaining product quality. Not every company sees an immediate return on these efforts, and it may take time before the investment pays off.
• Risk of failure: Not every brand succeeds in creating strong equity, even with significant investment. Some companies may not achieve the desired level of recognition or customer loyalty, making the investment less effective.
• Customer expectations: Companies with strong brand value must constantly deliver on the high expectations of their customers. Any failure to maintain the quality or value of the brand could lead to customer dissatisfaction and damage the brand’s reputation.
• Vulnerability to negative publicity: A strong brand is more visible, which means that any negative incidents, such as a product recall or poor customer service, can have a greater impact on its reputation. This can lead to a rapid decline in brand equity if not managed properly.

How to built brand equity with Keller’s Brand Equity Model

Keller’s Brand Equity Model (also known as the CBBBE-model) is a powerful approach for building a strong brand. It involves the following steps:

1. Brand identity: Create strong brand recognition. Ensure your brand is easily remembered and identified by consumers.
2. Brand meaning: Build a clear brand image. This includes:
   • Brand performance: How well your brand meets customer needs.
   • Brand imagery: The positive feelings and associations customers have with your brand.
3. Brand response: Influence customer opinions and emotions. This includes:
   • Brand judgments: How customers evaluate your brand’s quality and value.
   • Brand feelings: The emotions your brand evokes, like trust or excitement.
4. Brand resonance: Achieve strong customer loyalty and engagement. Ensure customers are highly loyal, frequently purchase, and recommend your brand to others.

Keller’s model uniquely focuses on creating brand value through deep customer insights and emotional connections. The customer centric approach of Keller is why we are fan of this Brand Equity Model.

Discover our handpicked brand equity examples

Discover our handpicked brand equity examples to see how leading brands have built and leveraged their strong market presence.

Brand equity Coca-Cola example

The first brand equity example is Coca-Cola. Everyone knows the iconic red label and the unique taste of Coca-Cola. This brand is one of the most valuable in the world, with an estimated brand value of over $80 billion (2020). Coca-Cola’s brand equity is not just about taste; it’s about a long-standing emotional connection with its customers. A famous taste test in 1975 showed that while people might prefer Pepsi in a blind test, 75% chose Coca-Cola when they knew which brand they were drinking. This highlights the immense influence of Coca-Cola’s brand equity on consumer choice.

Brand equity Adidas example

The second brand equity example is Adidas. The three stripes of Adidas are instantly recognizable. This global sportswear giant boasts a brand value of over $16 billion (2020). Adidas has built strong brand value through innovative products and strategic endorsements with top athletes. Whether it’s the latest in athletic gear or stylish streetwear, Adidas has a reputation for quality and performance. The brand’s ability to blend functionality with fashion helps it maintain a loyal customer base and command premium prices.

Brand value example: Apple

The third brand equity example is Apple. The sleek Apple logo is a symbol of cutting-edge technology and premium design. With a brand value surpassing $350 billion (2020), Apple’s brand value is extraordinary. The brand is known for its innovation, user-friendly products, and cohesive ecosystem. Apple’s loyal customer base often chooses its products over competitors’ despite higher prices. This strong brand value stems from Apple’s consistent delivery of high-quality, technologically advanced products.

Brand value example: Nike

The fourth brand equity example is Nike. Nike’s “Swoosh” logo and “Just Do It” slogan are globally recognized. The brand, valued at over $40 billion (2020), has built impressive brand value through strategic athlete endorsements and powerful marketing campaigns. Nike’s association with top athletes and sports teams helps reinforce its image of excellence and performance. This strong brand equity allows Nike to maintain its leadership in the sportswear market and charge premium prices for its products.

Brand value example: Starbucks

Our last brand equity example is Starbucks. Starbucks’ green siren is a familiar sight to coffee lovers worldwide. With a brand value of around $18 billion (2020), Starbucks has created strong brand value through its unique store experience and high-quality coffee. The brand has built a loyal following by consistently offering a premium coffee experience and personalized customer service. This brand value enables Starbucks to command higher prices and expand its presence globally with a strong, recognizable identity.

Frequently asked questions of brand value

In sessions with clients, we often receive various questions about brand-added value and its impact. To help you navigate these inquiries, here are some common questions along with their answers.

I. How do you measure brand value?

Brand value is measured through various methods, including surveys to gauge brand awareness, customer loyalty, and perceived quality. You can also look at market share, sales data, and customer feedback to assess how strong your brand is.

II. Can brand equity be quantified in financial terms?

Yes, brand equity can be quantified financially. This is often done by calculating the brand’s contribution to a company’s overall value, looking at factors like brand loyalty and market position. Brand valuation methods, such as the income approach or the market approach, can estimate a brand’s financial worth.

III. How does brand value influence pricing strategies?

Strong brand value allows companies to charge higher prices because customers perceive added value in the brand. When a brand is well-regarded, consumers are willing to pay a premium, making pricing strategies more flexible.

IV. What challenges are associated with managing brand equity?

Managing brand equity comes with challenges like maintaining consistent brand quality, dealing with negative publicity, and keeping up with changing consumer preferences. Companies must continuously invest in their brand to ensure it stays strong and relevant.

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