Brand Equity

The fields of finance and operations have been quantized successfully but its the marketing parameters which are yet to be quantized beyond doubt. One of few parameters which has been quantized is brand value which we generally know as Brand Equity.

David Aaker defined brand equity as 'set of assets(and liabilities) linked to a brand's name and symbol that adds to (or subtracts from) the value provided by a product or service  to a firm and/or that firm's customer'  

In short it helps us analyze and quantize the perception of the customers or population when a particular product is compared to a similar product or a substitute product.
Elements that can be included in the valuation of brand equity include (but not limited to): changing market share, profit margins, consumer recognition of logos and other visual elements, brand language associations made by consumers, consumers' perceptions of quality and other relevant brand values.

The brand equity is generally measured at various levels
At company level the brand value is measure taking into consideration the market capitalization, projected profits and the financial health of the company.
At product level  a branded product is  compared with a similar product with no brand and the premium the branded product can command when compared to the previous one.
At consumer level the brand association is calculated in terms of brand recall and recognition.


 Further reading:
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 PRABHAV GARUDADHWAJAN

GLCRMM 1012