What is brand equity? 11 Ways to measure brand equity for companies in Jordan

Brand equity is an intangible wealth for companies, but its impact is strongly tangible in financial and business performance. When a brand has a strong value, it can easily attract customers, justify high prices, and increase market expansion. Therefore, companies that invest in building and managing the brand value of their brands have a significant competitive advantage.

This concept is also closely related to branding and marketing, all of which together contribute to achieving a long-term competitive advantage and increasing financial returns. Which makes it a crucial element of any successful business strategy, and in our article today, we will show you all the brand equity meaning, how to measure it, and its most important benefits.

What is brand equity?

It is a concept that refers to the additional value that a brand gains thanks to its reputation and image in the minds of consumers. This value is formed based on several basic elements. 

Measuring brand equity

Measuring brand equity helps to know the strength and influence of the brand based on customers’ perception and feelings towards it. In fact, measuring it is a rather complex process, and it also requires understanding several aspects of customers’ interaction with the brand.

There are several methods and tools that can be used to measure this value, and they often rely on a combination of quantitative and qualitative measures. Here are some of the main methods:

• Spontaneous and induced awareness surveys.
• Online search rate
• Opinion polls and questionnaires.
• Analysis of reviews and ratings.
• Aaker brand equity model.
• Qualitative analysis and semantic analysis online.
• Customer retention rates.
• Loyalty surveys.
• Financial valuation of the brand.
• Market share analysis.
• Sentiment surveys and social analysis.

The most important elements of brand equity

There are many elements of brand equity, all of which contribute to building the brand’s commercial value.

These elements are interconnected and mutually reinforcing, as improving one element can improve the overall brand value. Here are the elements:

Brand Awareness

Refers to the extent to which the public knows about the brand and its presence in the market.

The more widely the brand is known and associated with a particular category of products or services, the stronger it is.

Perceived Quality

Relates to the consumer’s opinion about the quality of the products or services offered by the brand.

If the perceived quality is high, customers tend to trust the brand and consider it a better choice.

Brand Associations

One of the most important elements of brand equity, which includes the images, ideas, and feelings associated with a particular brand. Strong associations enhance brand preference and increase customer loyalty.

Brand Loyalty

Refers to the extent to which customers are attached to a brand and continue to buy its products over time.

Strong loyalty means that consumers do not prefer competing brands, which reduces the cost of acquiring new customers.

Brand Identity

Includes the visual and verbal elements that make a brand distinctive, such as logos, colors, names, and advertising slogans.

A clear brand identity helps build a strong relationship between the brand and its target audience.

Customer Experience

The more positive the customer experience across different touchpoints, the higher the brand value. It is one of the most important elements of brand equity, which includes:

• Quality of service.
• Convenience in accessing products.
• Dealing with after-sales service.

Financial Brand Value

It relates to the financial value that the brand adds to the company’s business. A strong brand contributes to increasing sales, enhancing market share, and increasing the company’s ability to set higher prices.

Market Positioning

It refers to the brand’s position in the market relative to competitors and how it is distinguished.

Brands with high value usually have a distinctive position and strong competition in the market.

Brand Personality

A brand’s personality helps attract a specific audience and create an emotional connection with them. It includes identifying the qualities and characteristics that represent the brand.

Customer Trust

Customer trust in the brand is one of the essential elements of brand equity. Brands that enjoy high levels of trust can retain customer loyalty and continue to attract new customers over time.

Brand equity examples

Here are examples of the Equity of brand for three well-known brands that can be leveraged to great effect:

Coca cola brand equity

Coca-Cola is one of the most powerful brands in the world, and has a huge brand value. Here is an explanation of the highlights of coca cola brand equity:

• Brand awareness: Globally known and a distinctive symbol of soft drinks.
• Perceived quality: Trusted for its consistent quality.
• Emotional attachment: Associated with happiness and engagement.
• Loyalty: Very loyal customer base.
• Financial performance: Generates huge profits due to its market power.

Nike brand equity

Nike is one of the most valuable and powerful brands in the sportswear and footwear industry:

• Brand awareness: The “Swoosh” logo and the phrase “Just Do It” are globally known.
• Perceived quality: Associated with innovation and high quality.
• Emotional attachment: Represents determination and sporting success.
• Loyalty: A loyal customer base due to the brand’s association with sports stars.
• Financial Performance: Huge revenues due to high brand value.

Ali cafe brand equity

Ali Cafe is a well-known brand in the instant coffee market and is considered a leading brand in the sector in some Asian and Middle Eastern markets. Here are the details of its equity of brand:

• Brand awareness: Well-known in regional markets.
• Perceived quality: Trusted for its quality and good taste.
• Emotional attachment: Associated with comfort and relaxation.
• Loyalty: Loyal customer base in some markets.
• Financial Performance: It achieves good sales in the instant coffee category.

What is the relationship between branding and brand equity?

The relationship between branding and brand equity is an integral one, as branding represents the ongoing process of building and developing a brand identity.

While Brand Equity is the outcome or value resulting from these efforts made by branding. Branding also builds Brand Equity, and the second enhances branding’s influence and effectiveness in the market.

Simply put, it can be said that branding is the tool or process, and the second is the result that reflects the success of this process.