Take two comparable products, made from the same materials and designed to perform the same function. Attach an unknown name to the first and a major brand name to the second: the way they are perceived changes immediately.

Much of brand equity lies in this difference.

Brand equity refers to the additional value a brand brings to its offering through awareness, reputation, the associations it creates and the trust it inspires.

This value is intangible, but its effects are very real. It can increase preference, facilitate a product launch, strengthen customer loyalty and help a company withstand competitive pressure.

What is brand equity?

Brand equity is the value that a brand name adds to a product or service.

In 1993, American marketing scholar Kevin Lane Keller defined customer-based brand equity as the differential effect of brand knowledge on consumer response to the marketing of a brand.

In other words, would a product be perceived, evaluated or chosen in the same way if it carried a different name?

If the brand changes perception, preference or behaviour, it possesses equity of its own.

This definition also helps distinguish brand equity from brand awareness.

A company can be widely known without being particularly desirable or preferred. Awareness means that a name is present in people’s minds. Brand equity begins when that name also generates trust, expectations, preference or emotion.

Brand equity is built in people’s minds

A significant part of brand equity exists outside the company: in consumers’ memories.

A name may evoke a particular origin, a shape may become familiar, a colour may immediately bring a house to mind, or a product may inspire confidence before it has even been tried.

Some associations are functional: durability, precision, performance, simplicity or expertise.

Others are more symbolic. Over time, a brand may become associated with a particular idea of adventure, elegance, freedom, success or innovation.

These associations then influence how its products are perceived and evaluated.

A brand territory is therefore not simply what a company claims through its communications. It also consists of what audiences have gradually come to remember and associate with it.

Unaided awareness as an indicator of brand strength

There is an important difference between recognising a brand when you see it and spontaneously thinking of it when a product category is mentioned.

Brands with strong equity gradually become mental shortcuts. When a need, desire or category arises, their names come readily to mind.

This presence is built through repetition and the consistency of sufficiently distinctive brand assets.

It is also one reason why constantly changing a brand identity can be counterproductive.

Internal teams see their campaigns, colours, taglines and brand codes far more frequently than the general public. They may therefore become tired of them just as consumers are beginning to recognise and remember them.

Building brand equity also requires a degree of continuity.

Strong brands can come to own a territory

Not all associations contribute equally to brand equity.

Concepts such as “quality”, “innovation” or “authenticity” are positive, but so widely used that they rarely create meaningful differentiation on their own.

An association becomes more strategically valuable when it is positive, strong and difficult to attribute just as easily to a competitor.

It might relate to an origin, a particular craft, a technology, a distinctive approach to performance or a unique relationship with travel, the body, time or creativity.

The strongest brands can gradually come to own certain territories in consumers’ minds.

This ownership cannot simply be declared. It results from repetition, proof and consistency.

This highlights a fundamental distinction between intended identity and genuinely acquired brand equity: a brand does not own something simply because it claims it. What matters most is what its audience has ultimately come to associate with it.

Brand equity influences perceived value

Brand equity also has economic effects.

When products have comparable characteristics, consumers may assign greater value to one because of the name it carries. A familiar and credible brand can also reduce uncertainty when making a choice.

This trust operates before purchase, but also afterwards. A positive experience strengthens not only the perception of the product concerned, but also that of the brand as a whole.

It can therefore make a subsequent purchase easier or encourage customers to try products from another category.

Brand equity gradually turns individual experiences into cumulative advantages. The stronger it becomes, the less each new product needs to establish its credibility from scratch.

The brand’s reputation comes with it.

How can brand equity be measured?

There is no single indicator that can precisely measure a brand’s equity.

Instead, evaluation relies on several complementary measures.

Unaided and aided awareness indicate how present the brand is in consumers’ minds. Brand associations reveal the qualities, values and ideas attributed to it. Consideration and preference help determine whether the brand is genuinely part of the consumer’s decision-making process.

Loyalty is another important indicator, although the reasons behind it need to be understood. A customer may buy again because of genuine attachment, habit or simply because switching requires effort.

A brand’s ability to enter new categories provides another useful indication.

When a name enjoys a high level of trust, some of that credibility can extend to a new product category. However, this depends on the consistency between the new offer and the territory the brand has already established.

A relevant extension can strengthen the brand. Diversification that moves too far from its existing territory can, on the other hand, make its positioning less clear.

Measuring brand equity therefore means combining several indicators rather than searching for a single figure.

Brand equity is built over time

A campaign can rapidly increase awareness. On its own, however, it will rarely be enough to build a strong brand.

Brand equity accumulates gradually.

A product confirms a promise. A positive experience builds trust. A campaign enriches the existing brand universe. An innovation demonstrates that the brand remains relevant.

Consistency between these actions has genuine strategic value.

When each new initiative reinforces what came before, investment accumulates. When a brand repeatedly changes its territory, language or distinctive assets, new investments are more likely to replace previous ones.

In the first case, the brand builds equity. In the second, it repeatedly has to rebuild part of its recognition.

Distinctive brand assets become valuable assets

A colour, shape, motif, sonic signature, packaging design or particular style of product photography may initially appear to be simple creative choices.

Over time, some become genuine distinctive brand assets.

Audiences learn to recognise them and associate them with a brand without even needing to see its name.

This recognition gives them significant strategic value.

This is why changes to a brand identity cannot be considered purely from an aesthetic perspective. A new logo may appear more contemporary while being less recognisable. A colour considered dated internally may have benefited from years of accumulated recognition. Familiar packaging may provide an essential point of reference for consumers.

Brand identity work — whether conducted internally or with a branding agency — should therefore allow a brand to evolve without unintentionally removing assets that audiences have spent years learning to recognise.

Trust is part of brand equity

The power of a brand does not depend solely on its attractiveness. It also lies in its ability to reduce perceived risk.

Every purchase involves a degree of uncertainty: product quality, service reliability or whether the brand will deliver on its promise.

A familiar name already