- Positive brand equity, which occurs when customers perceive your brand as valuable, allows you to charge price premiums for your products or services and boost sales
- Effective branding can improve your brand equity, even if you don’t make any major changes to your product or service lines
- If you have a good reputation but low brand recognition, you might have low brand equity
Ever choose Advil instead of a generic ibuprofen tablet or a bottle of Evian over store-brand water? If so, you’ve experienced the power of branding. No matter how similar two products or services are, people tend to opt for brands they value most.
A brand’s perceived value—or brand equity—stems from a variety of components, such as its name recognition and customer experience. With a consistent, customer-focused marketing strategy, you can achieve positive brand equity, turning your company into a preferred brand name. Read on to learn more about brand equity and get helpful tips from seven famous brand equity examples.
What is brand equity?
Brand equity is the perceived value of a brand. Separate from the actual value of your products or services, brand equity is the worth consumers assign to a brand itself.
Businesses earn positive brand equity by achieving:
- Widespread brand awareness: Consumers know your brand name and what you sell.
- Positive brand associations: Consumers connect your brand with positive feelings, positive experiences, and positive concepts.
- Strong brand loyalty: Members of your customer base strongly prefer your brand over competitors.
- High perceived quality: Consumers perceive your products and services as high-quality.
- Ownership of proprietary assets: Your brand owns intellectual property, such as trademarks or patents.
Improving any of these five components of brand equity can boost your brand’s reputation. As a result, you can increase your profit margins by charging higher prices for your branded products or services without losing customers.
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4 positive brand equity examples
Positive consumer perceptions can help you sustain business growth. Here are four examples of brand equity and what they can teach you about improving your brand’s value and growing your business.
Nike thrives on positive brand associations. The company’s brand marketing efforts have connected Nike to feelings of motivation and victory, such as in its emotional TV commercials. Plus, it often sponsors well-respected athletes like Cristiano Ronaldo and Serena Williams, who have their own positive brands as public figures.
Nike also utilizes other components of brand equity, such as customer loyalty, perceived quality, and proprietary assets. The brand has over 200 pending and active trademarks, including the widely recognized swoosh logo and “Just Do It” tagline. Its high brand equity has allowed Nike to achieve a 39% market share in the global athletic footwear industry.
What small businesses can learn: Crafting marketing campaigns that evoke positive emotions or feature positive role models can improve brand perceptions and help you become the preferred brand for your target market.
Apple is undeniably a winner when it comes to brand loyalty. Consumers today prefer to shop online, and yet many Apple customers are still devoted enough to stand in long lines for early iPhone releases. Loyal customers refuse to stray from the iOS ecosystem, even if it means paying a premium for their device. Why?
Apple’s brand loyalty largely stems from its brand experience. Apple is known for its clean, minimalist design, and its new products (like AirPods and AirTags) are innovative while still fitting easily into the Apple ecosystem. Because of its streamlined branding, Apple products are also often perceived as higher quality.
What small businesses can learn: A unique customer experience can increase your brand’s perceived value (and therefore its equity) since customers can’t get it anywhere else.
Coca-Cola has run dozens of successful brand marketing campaigns over the years. Thanks to the use of widespread slogans like “the cold, crisp taste of Coke,” Coca-Cola is often perceived as higher quality than Pepsi, even though both sodas have almost exactly the same ingredients.
Coca-Cola amassed this positive brand equity through its iconic trademarks and positive associations with happiness and refreshment.
What small businesses can learn: Your small business branding plays a big role in enhancing the perceived quality of your products or services. Even if you don’t make any changes to what you’re selling, your brand strategy can make your products and services appear higher quality.
Toyota didn’t always have strong brand equity. From 2009 to 2011, when Toyota recalled over 20 million vehicles worldwide for a gas pedal defect, it lost a lot of consumer trust. As a result, Toyota took a major hit to its perceived quality.
While Toyota needed time to recover from the impact of the recall, statistics showed that customer perceptions already began to improve before its recalls were complete. By focusing on building quality products and launching sales events that were designed to add value and promote customer loyalty, Toyota regained its reputation for long-lasting cars and has seen its value rebound.
What small businesses can learn: Brand equity can bounce back after a downturn, but your company must make good faith efforts to resolve the issues identified by consumers and provide consistent products or services in the future.
3 negative brand equity examples
When brand equity is negative, your target audience may balk at high prices, perceive your goods or services as low quality, or flock to competitors. Here are three brand equity examples that show how brands have missed the mark in the United States (and how you can avoid doing so).
1. Burger King
Since its founding, Burger King has lagged behind one major fast food competitor: McDonald’s. But as American consumers have become more health-conscious, Burger King lost its No. 2 spot—giving way to chains that successfully appealed to health-conscious customers, including Wendy’s and Subway. On top of that, Burger King’s controversial ads have attracted negative attention, further dinging the perceived value of the Burger King brand.
What small businesses can learn: Your brand marketing efforts must appeal to your target market. Use consistent messages, emotions, and value propositions to help customers distinguish your brand from others and give them a reason to choose you.
2. Spirit Airlines
Spirit Airlines often comes up when people talk about the hidden costs and poor experiences associated with low-budget airlines. One of the biggest reasons for Spirit’s low brand equity is it doesn’t offer anything special compared to other airlines—and it isn’t always the cheapest option around.
The Los Angeles Times described Spirit’s improvement strategy as this: “Be a less terrible airline.” Though Spirit has reduced lost bags and planned to reduce flight delays, according to the LA Times, it still has higher rates of customer complaints than most airlines.
What small businesses can learn: Negative customer experiences impact your brand equity. It’s important to address feedback and critical reviews, like on your Yelp Business Page, to keep your reputation strong and brand equity high.
3. Eight O’Clock Coffee
While Eight O’Clock Coffee is sold in major retailers, its lack of advertising compared to brands like Starbucks and Folgers decreases its brand recognition. While the brand doesn’t have a bad reputation, it still has low brand equity.
Because of this, shoppers might instead reach for Starbucks, Folgers, or locally grown coffee options when at the store, overlooking Eight O’Clock because they don’t know as much about its value or quality.
What small businesses can learn: Customers need to hear about your brand to be aware of it. Marketing consistently to your target audiences can help you increase brand awareness. Once your brand is recognizable, you can start pushing out a brand story that evokes positive emotions and further boosts brand equity.
Build brand equity with inspiration
Brand equity is the perceived value of your brand. When you have positive brand equity, your customers are willing to pay more for your products or services instead of generic options. Some of the most famous examples of positive brand equity, like Nike and Coke, show how brand marketing campaigns can shape perceived quality and brand associations while boosting brand awareness.
Without a focus on making distinct products, services, or experiences that offer unique value, brand equity can decline. Once you’ve attracted your ideal audience, learn top customer appreciation ideas to add additional value to your brand.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.