The Definition of Brand Equity

A brand is a label, term, symbol, design or any characteristic that clearly and uniquely identifies one product or service as distinctly different from the products or services of other similar sellers. Branding is a critical marketing and promotional strategy, yet very difficult to apply successfully. A strong brand helps establish your company’s reputation in the market. It can help increase brand loyalty and repeat sales. A brand can even create a perception of quality and excellence. It creates customer loyalty and creates the perception of an industry leader.


Branding provides a unique opportunity for brands to differentiate themselves from the competition. In many industries, brands are used as a key ingredient in the creation of new products. For example, some companies create consumer electronics that have been specifically designed to meet a specific user need or desire. These consumer electronics are branded because of their special attributes. One example of this is the Sony Play Station. The Play Station is designed to play music and videos, and has become a top selling household item.

Branding is also important in the business realm. A strong and identifiable brand name can distinguish and differentiate your products and services from those of your competitors. Without a brand name consumers are not aware of your products or services. A strong brand name also allows you to stand out from your competitors and create the perception of an industry leader and superior product or service. Many consumers build a list of brands and use them to find products or services that they consider reliable, trustworthy, fashionable, or innovative.

The essence of branding is to create a one product image that is strongly tied to a unique personality traits. A strong brand is identified by consumers with one or more of these traits. These consumers will be your customers for the long-term. When a customer is looking for a Sony Play Station or a pair of Coach shoes, they will think of these brands rather than a vague generic product. While some customers do not have a very clear idea of what they want, there is usually an underlying common characteristic that is their favorite attribute or trait.

A strong brand identity helps to set yourself apart from the competition and helps consumers to distinguish your brands from other similar products. When someone sees your Play Station they immediately know what it is. This is not always easy, especially if your brand name is something vague like “Play station” or “Coutreel”. But if you give consumers a good enough reason they can generally make a connection. In fact, branding almost becomes an art form as you try to make consumers understand what your company does and why they should buy from you.

Branding is often used to position your products or services as being better than your competitors. Many large corporations spend millions on marketing their brands. This strategy is often used to build consumer trust. Consumers who trust brands will often purchase from the brand when purchasing a product or service. Some brands spend heavily on advertising but it is important to remember that without brand equity in place consumers will not be as likely to purchase your products.