The commercial value a brand holds beyond the functional value of the product itself — the premium a customer will pay, or the preference they'll show, purely because of the brand's reputation.
Why it matters
Brand equity is why two functionally similar products can command very different prices, and why a company can survive a bad product cycle if the underlying trust in the brand remains intact. It's an asset that compounds — or erodes — over years, not campaigns.
In a sentence
"The brand equity built over a decade let them charge a premium even when a competitor launched a cheaper, comparable product."
Related terms
- Antonyms: Brand damage, reputational harm (the erosion of brand equity).
- Often confused with: Brand awareness (equity is about the value and trust associated with a brand; awareness is simply whether people have heard of it — a brand can have high awareness and low equity, or vice versa).
- Synonyms: Brand value, brand strength.