Brand equity

Brand equity is one of the most valuable assets a company can build, yet it's often misunderstood or underappreciated outside marketing circles. Simply put, brand equity refers to the additional value a brand name brings to a product or company beyond its functional benefits. This value encompasses consumer perceptions, experiences, associations, and emotional connections. When brand equity is strong, it can lead to customer loyalty, price premiums, and resilience in times of crisis. Apple, Coca Cola, and Mercedes Benz provide powerful examples of companies whose brands command not just recognition but lasting trust and customer preference. To understand brand equity, we examine four core components brand awareness, perceived quality, brand associations, and brand loyalty. Awareness ensures recognition, perceived quality shapes expectations, Associations link the brand to values or emotions, and loyalty drives repeat business and advocacy. These elements develop over time through consistent behavior, strong positioning, and fulfilling promises. Trust is earned through genuine actions, as demonstrated by Johnson and Johnson's consumer focused response during the Tylenol crisis, which preserved its brand status. Brand equity is both an intangible and real financial asset. Traditionally, accounting standards have struggled to recognize brand value unless a company has bought or sold, creating a disconnect between marketing and finance.