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Main Distinctions of Brand Equity and Brand Value

08 January 21

Brand equity and brand value are similar in names, only essentially different. Brand equity relates to customers' beliefs, earned through consumers' loyalty. Brand value, on the other hand, is the financial worth of the brand, the price customers are willing to pay to get a certain product or service. As one of the leading brand agencies in Indonesia, Milestone acknowledges there are three main differences between brand equity and brand value. 

First, brand equity comes from consumers’ attitude and enthusiasm for the brand while brand value is determined by the amount of money customers are willing to spend for the brand’s products or services.  Customers are the focus of brand equity. Brand value, in contrast, focuses on the financial worth of the product/service. 

Second, brand equity and brand value are not created in the same way. According to Kevin Keller, the marketing professor at the Tuck School of Business at Dartmouth College, to build strong brand equity, shaping customer perspective is required. Brands have to build positive experience in order for their customers to have good feelings and opinions about them.  Meanwhile, brand value grows from the quality of the products or services, consistency, and its uniqueness with other brands. 

The last one is what they represent. Brand equity indicates the success or failure of the brand based on customers’ attitude and satisfaction. It is accomplished when customers are using the brand name as a synonym for the products. Otherwise, brand value describes the overall financial worth of the products/services in the market. It could be seen by conducting marketing and financial analysis. To make a successful brand, separating the two is not possible. Brand equity plays a major role in strengthening the brand’s worth, which later affects the value of the brand for customers.