Brand Equity
Definition
Brand equity is the willingness for someone to continue to purchase your brand or not. Thus the
measure of brand equity is strongly related to loyalty and measures segments on a continuum from
entrenched user of the brand to convertible users.

The measurable financial value in transactions that accrues to a product or service from successful
program and activities.( J. Walker Smith)

Brand equity subsumes brand strength and brand value. Brand strength is the set of associations and
behaviors on the part of a brand’s customers, channel members and Parent Corporation that permits
the brand to enjoy sustainable and differentiated
differentiated competitive advantages. Brand value is the financial
outcome of management’s ability to leverage brand strength via tactical and strategic actions in
providing superior current and future profits and lowered risks. ( Raj Srivastava & Allan Shocker)

Brands with equity provide’ an own able, trustworthy, relevant, distinctive promise to consumers.’ 
consumers.’  
 

According to David Aaker, brands have equity because they have

• High awareness
• Many Loyal Consumers
• High reputation for perceived quality
• Proprietary brand assets such as access to scare distribution channel or to
patents; or the kind of brand associations such as personality associations.
associations .

Consumers prefer high-equity brands because:

• They find it easier to interpret what benefits the brand offers
• Feel more confident to it.
• Get more satisfaction from using it.

Because of such consumer preference, the brand can

charge a higher price and command more loyalty.
 

Benefits of Brand Equity  

Customers  
To Customers
• Use Satisfaction
• Confidence in the purchase decision
• Interpretation/ Processing of information.
Firm 
To Firm 
• Brand Loyalty
• Prices/Margin
• Brand Extensions
• Trade Leverage
• Competitive advantage
• Efficiency and effectiveness of marketing programs.
 

place. 
Brands vary in the amount of power and value they have in market place. 
• At one point there are brands that are not know by customers
• Then there are brands for which customers have high degree of brand
awareness.
• These brands are having high degree of brand acceptability.
• These brands enjoy high degree of brand preference.
• There are brands that enjoy high degree of brand loyalty.

Five levels of customer attitude toward his or her brand from lowest to highest.  
• Customer will change brands, especially for price reason. No brand loyalty.
• Customer is satisfied. No reason to change the brand.
• Customer is satisfied and would incur loss by changing brand.
• Customer values the brand and sees it as friend.
• Customer is devoted to the brand.

• Brand equity is highly related to how many customers are there in classes 3,4 or 5. It is also
related to the degree of brand-name recognition, perceived brand quality, strong mental and
emotional associations and other assets such as patents, trademarks, and channel relationship.
 

advantages:  
High brand equity provides a number of competitive advantages: 
• The company will enjoy reduced marketing costs because of consumer brand
awareness & loyalty.
• The company will have more trade leverage in bargaining with distribution and
retailers because customers expect them to carry the brand.
• The company can charge a higher price than its competitors because the brand
has higher perceived quality.
• The company can more easily launch extension because the brand name carries
high credibility.
• The brand offers the company some defense against price competition.

 A brand name needs to be carefully managed

managed so that its equity doesn’t depreciate.
This requires maintaining or improving brand awareness, perceived quality and
functionally, and positive associations. These tasks require continuous R& D
investment, skillful advertising and excellent trade and consumer
c onsumer service.
 

Best Global Brands 2008

2008 Brand
Value in
Rank Million 2007 Brand Value in Percentage Country of 
Rank 2008  2007  Brand  Dollars  Million Dollars  Change  Ownership  

1 1 Cola 
Coca Cola  66,667 65,324 2 U.S.

2 3 IBM  
IBM 59,031 57,091 3 U.S.

3 2 Microsoft 
Microsoft  59,007 58,709 1 U.S.

4 4 GE
GE   53,086 51,569 3 U.S.

5 5 Nokia 
Nokia  35,942 33,696 7 Finland

6 6 Toyota
Toyota   34,050 32,070 6 Japan

7 7 Intel
Intel   31,261 30,954 1 U.S.

8 8 McDonald's 
McDonald's  31,049 29,398 6 U.S.

9 9 Disney  
Disney 29,251 29,210 0 U.S.

10 20 Google 
Google  25,590 17,837 43 U.S.

11 10 Mercedes-Benz 
Mercedes-Benz  25,577 23,568 9 Germany

12 12 Hewlett-Packard  
Hewlett-Packard 23,509 22,197 6 U.S.

13 13 BMW 
BMW  23,298 21,612 8 Germany

14 16 Gillette  
Gillette 22,069 20,415 8 U.S.

15 15 American Express
Express   21,940 20,827 5 U.S.

16 17 Louis Vuitton 
Vuitton  21,602 20,321 6 France

17 18 Cisco  
Cisco 21,306 19,099 12 U.S.

18 14 Marlboro
Marlboro   21,300 21,283 0 U.S.

19 11 Citi
Citi   20,174 23,443 -14 U.S.

20 19 Honda
Honda   19,079 17,998 6 Japan

21 21 Samsung
Samsung   17,689 16,853 5 S. Korea

22 New  H&M
H&M   13,840 New  New  Sweden

23 27 Oracle
Oracle   13,831 12,448 11 U.S.

24 33 Apple 
Apple  13,724 11,037 24 U.S.

25 25 Sony
Sony   13,583 12,907 5 Japan
 

Best Nepali Brands 2008

Rank
Rank 2008  2007  Brand 

1 1 Wai Wai
Wai  

2 2  Uniever)  
Lifebuoy ( Uniever)

3 3 Lux ( Unilever)
Unilever)  

4 7  Rumpus ( Asian Thai Food) 

Food)  

5 4  Snax)  
Mayos ( Himalayan Snax)

6 10  Nepal) 
Coke ( Bottlers Nepal) 

7 5  Unilever) 
Sunsilk ( Unilever) 
All urban Nepal ( TOM & SPONT)
8 6  Soap)  
Puja ( Mahashakti Soap) 

9 19 Fair & Lovely ( Unilever) 

Unilever) 
10 8 Clinic Plus ( Unilever)
Unilever)  

11 17  Nokia  
Nokia

12 9 unilever)  
Pepsodent ( unilever)

13 14  Close Up ( Unilever)

Unilever)  

14 12 Snax)  
Ruchee ( Himalayan Snax)

15 25  Pepsi ( Varun Beberages)

Beberages)  

16 32  Nepal)  
Fanta ( Bottlers Nepal)
17 13  Colgate  
Colgate

18 11 Liril ( Unilever)
Unilever)  

19 16 Samsung TV ( Golcha)
Golcha)  

20 15 Wheel ( Unilever) 
Unilever) 

21 23  Rara ( Gandaki Noodles)

Noodles)  

22 20 LG TV ( CG)
CG)  

23 18  Dabur Vatika ( Dabur) 

Dabur)  
24 27 Wheel Detergent ( Uniliver)
Uniliver)  

25 24 Dettol ( Reckitt Bensiker)

Bensiker)