Consumers usually benefit from branding, and trademarks may help them shop more efficiently, as they avoid brands that they dislike, while buying the brands that they like most. Brand loyalty is a favorable perception of, and the consistent buying of, a certain brand over time. The marketplace has been dramatically changing in the past decade thanks to advanced and cheaper communications technologies, which enable consumers to make better choices and share their buying experiences with others, worldwide. Consumers are now increasingly dependent on the internet to acquire information and compare brands before buying. Consumers can easily shift brands if they believe that they have not been treated fairly by a certain company (Kotler & Keller, 2015).
AMA (n.d.-a) defines brand equity as “the value of a brand. From a consumer perspective, brand equity is based on consumer attitudes about positive brand attributes and favorable consequences of brand use.”
According to Johansson (2009) brand equity is “the value of the positive associations that consumers have with a product’s brand name. These associations often involve emotional attachments, affinity, positive brand image, and brand identity. They also involve cognitive factors such as familiarity, knowledge and perceived quality, as well as social factors including peer-group acceptance. When these associations turn negative (as in antiglobalization sentiments against global brands) the brand equity can go down very quickly.”
Brand equity is basically the added value that a brand gives to a product beyond the functional benefits that it provides. Brand equity provides competitive advantages; for example, Mercedes Benz implies quality. A second advantage is that consumers are willing to pay more for a product with a brand equity. Here, brand equity is represented by the premium that a consumer is willing to pay for a certain brand over another when both brands provide similar functional benefits. Acura, Infinity, and Lexus cars enjoy a price premium that arises from their brand equity (Kerin & Hartley, 2017).
Brand equity takes time to develop and is carefully crafted and nurtured by marketers who forge unique, strong, and favorable experiences and associations with the brand. Brand equity resides in the consumers’ minds, and results from what they have seen, heard, felt, and learned about the brand over time. Brand equity is not quickly or easily achieved (Kerin & Hartley, 2017).