Corporate brand equity

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The term “brand equity” refers to the companies faith that the will continue to sell better then non-brand products in that market. It is figured by placing the believed revenue of the product against the believed revenue of a non-brand. This estimation is of the actual quality of the product, as well as the image the public has of it, (does it work? Is it fashionable?) Which can never really be accurately measured. This means that brand equity is estimation, or guess at it’s most accurate.

When a brand has positive equity, it is usually due to good management and good marketing, as much as it is product quality. This can even be seen in the record industry today. Music well marketed to the consumer is not necessarily full of talent. Bad brand equity is as often due to poor marketing and management. If a soap cleans twice as well, but has no effective marketing, it won’t have any sort of image, nor reputation, as it will have no recognition, and therefore probably won’t sell any better then a no brand, thus, having poor equity.

Brand equity, though, can transfer in to related areas with a little marketing. A very popular brand of paper towels could probably get into the paper plate market with almost no difficulty, riding on it’s equity in such a closely related market.

When brand equity is against you, however, it can cause serious problems. It is much harder to get a reputation in a market already saturated with high quality, well marketed, reputatially sound competitors.

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Corporate Brand Equity