Brand Equity and Brand Value

Explanation and Measurement

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Brand equity and brand value are often used as synonyms. But that is wrong. While the brand value describes the monetary value of a brand the equity is a set of soft factors that increases or decreases utility associated with a product and changes the purchasing decisions of prospective customers. There are different approaches to measure the brand equity but all of them rely on a number of different variables that form a message together. There are also different approaches to measure or calculate the brand value. Unlike the measurement of the equity the measurement of the value has to result in a single value. While it does not seem to be possible to express brand equity in a single variable this is regularly done for brand value which also relies brand equity as an important factor. This implies that problems with the reliability of the brand values are to be expected. This booklet explains the terms in detail and shows the current status of equity and value measurement.