Brand equity

Brand equity is the additional value a brand name adds on top of the unbranded product. The concept spans two traditions that need each other. The financial tradition treats the brand as an intangible asset: something you can value, put on a balance sheet and settle in an acquisition. The consumer-based tradition sees brand equity as the sum of awareness, associations and purchase propensity in the customer's mind. There is criticism too: the term glues together three different things, brand value, brand strength and brand description, and is therefore often used sloppily. Anyone working with brand equity must first make explicit which meaning is intended.

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