What is Brand Equity and How Do I Earn it?

December 21, 2016 By MAXtech News Branding Comments

In the Marketing world, there is always talk of Brand Awareness and Brand Equity. More often than not, Brand Awareness is a vague term used to convince a client that their marketing campaign didn’t fail. The truth is, however, that unless your “Brand Awareness” increased your Brand Equity, then you paid for nothing. So what is Brand Equity and how does your company increase or even measure it? Let’s break it down.

1.What is Brand Awareness?

You may think “Brand Awareness” is an easy-to-understand term, but in reality the word is misused all the time. Yes, “Brand Awareness” is a measure of how aware people are of your brand, but not in a general sense. Think about Hewlett Packard (HP) and Apple for a minute. You know both are technology companies and that is basic Brand Awareness. But real Brand Awareness is when people can understand what makes your company unique compared to your competition. 

You know Apple makes expensive, high-end computers, phones, etc. This is an example of good Brand Awareness. Most people not only know what Apple makes, but they know what sets Apple apart from every other technology company. What about HP? Do they make expensive computers? Are they creative? Are they cheap? How is HP different from Lenovo or any other computer company? If you can’t answer these questions, it’s because HP does not have good Brand Awareness. People understand what industry the company is in, but can’t identify unique differentiators. 

2.What is Brand Equity?

So how does Brand Awareness create Brand Equity? How do you measure Brand Equity? These may seem like complicated questions, but the answers are fairly simple. It’s easiest to understand Brand Equity through an example. Let’s take an ASUS computer and an Apple computer. Both have the same EXACT specifications, but Apple can charge 2x – 3x more for their product. Why? Brand Equity. 

That difference in price is Apple’s Brand Equity. It’s the extra value given to their products/services compared to their competitors because of their perceived brand. So in this example, both ASUS and Apple have good Brand Awareness. Apple is perceived as high-end while ASUS is cost-efficient, but ASUS makes no extra money off of its products because of its brand. This means that Apple has a much more valuable Brand Equity compared to ASUS. The lesson here is that not all Brand Awareness translates to Brand Equity. Just because people know who you are doesn’t mean you can charge more than your next closest competitor. 

So how do you build a brand that can create equity? That requires more knowledge than a blog post can convey. It takes time and money, but in the long run your company can become Apple while your competition becomes ASUS. If you need guidance on how to build your brand, reach out to our Brand Experts online at https://www.maxtechagency.com/contact-us.php or give us a call at 614-401-8800.