Evidence · Brand growth

Brand equity: what the research shows

Brand equity is the extra response a brand earns because of what buyers know about it, compared with the same product without the name. Peer-reviewed studies show that survey measures of brand equity only partly agree with equity measured in sales data, and that awareness, consideration and liking help explain sales. The strongest behavioural evidence points to salience, the ease with which a brand comes to mind in buying situations, rather than to unique associations.

Definition

Brand equity is the value a brand adds to a product. In the customer-based view it is the difference that brand knowledge (awareness of the brand and the associations linked to it in memory) makes to how people respond to the brand's marketing. An information-economics view adds that, when buyers cannot judge quality before buying, a brand works as a signal whose credibility, built through the firm's past behaviour, makes product claims believable. Researchers measure equity either through surveys of what people know and feel about a brand, or through sales data, as the share or price premium a brand earns beyond what its marketing mix explains.

What the research finds

Two accounts of why brands are worth something

The memory-based account treats equity as the effect of brand awareness and associations on how consumers respond to marketing. The signalling account treats it as credibility: when information is imperfect and unevenly held, a brand lets a firm tell buyers where its product stands and makes those claims believable. The two views are complementary rather than competing.^[1]^[2]

Survey and sales measures only partly agree

Across ten years of scanner data for 290 packaged-goods brands in 25 categories, the survey dimensions of relevance, esteem and knowledge tracked sales-based equity fairly closely, while energized differentiation showed a slight negative association. Category characteristics changed the strength of the link. In a separate sales-response model covering more than 60 brands, awareness, consideration and liking explained almost one-third of the explained variation in sales and moved before sales did.^[3]^[4]

Salience predicts behaviour better than attitude

Brand salience is better understood as a brand's tendency to come to mind across many buying situations than as being named first. In subscription markets such as insurance and banking, lower salience was consistently related to a higher chance of defection across three studies. In a repeat-purchase experiment, people used awareness as a shortcut when choosing and were slow to give up that habit.^[5]^[6]^[7]

Unique associations do not predict preference

Across 94 brands in eight markets, having associations that no other brand shared was not related to past usage or stronger preference, and a brand's share of unique associations correlated poorly with its market share. This questions the common advice to build equity mainly through differentiation, and supports meeting general category needs well.^[8]

Distinctive assets can be measured and benchmarked

An analysis of 1,162 distinctive assets (logos, colours, sounds, slogans and similar) across 21 categories, four countries and nine years scored each by how often people link it to the brand and how exclusively. Shape-based assets such as logos and packaging performed best, at 40% and 71% on those two measures, and colour assets performed worst, at 12% and 39%.^[9]

Equity connects to customer value and firm value

Using a widely used survey of brand equity tracked over a decade in one industry, researchers related brand equity to the components of customer lifetime value (acquisition, retention and profit margin) while separating it from the direct effect of marketing activity. At the corporate level, the choice between a single corporate brand, a house of brands or a mix carries different advantages for cash flows and risk.^[10]^[11]

Brands are also cultural and identity resources

Consumer culture research treats brands as material people use to build and express identity, including through digital possessions. Interpretive studies show that brands provoke cultural backlash when their authority is questioned, and that competing brand images spread by critics and other stakeholders can shape how a new market forms.^[12]^[13]^[14]

How strong is the evidence?

The customer-based and signalling definitions of brand equity are conceptual frameworks, not tested regularities. The comparison of survey and sales measures rests on packaged-goods data from the United States and a few consumer-goods categories, so it may not carry over to services, durables or business markets. The evidence on salience, unique associations and distinctive assets comes mainly from one research group, and the awareness study is a laboratory experiment. The link from equity to customer lifetime value comes from a single industry, and firm-value links are observational. The cultural studies are interpretive: they explain how brands acquire meaning but are not designed to estimate how much equity is worth.

References

Kevin Lane Keller (1993). Conceptualizing, Measuring, and Managing Customer-Based Brand Equity. Journal of Marketing.
T\\\"ulin Erdem, Joffre Swait (1998). Brand Equity as a Signaling Phenomenon. Journal of Consumer Psychology.
Hannes Datta, Kusum L. Ailawadi, Harald J. van Heerde (2017). How Well Does Consumer-Based Brand Equity Align with Sales-Based Brand Equity and Marketing-Mix Response?. Journal of Marketing.
Shuba Srinivasan, Marc Vanhuele, Koen Pauwels (2010). Mind-Set Metrics in Market Response Models: An Integrative Approach. Journal of Marketing Research.
Jenni Romaniuk, Byron Sharp (2004). Conceptualizing and Measuring Brand Salience. Marketing Theory.
Jenni Romaniuk, Byron Sharp (2003). Brand Salience and Customer Defection in Subscription Markets. Journal of Marketing Management.
Emma K. Macdonald, Byron Sharp (2000). Brand Awareness Effects on Consumer Decision Making for a Common, Repeat Purchase Product: A Replication. Journal of Business Research.
Jenni Romaniuk, Elise Gaillard (2007). The relationship between unique brand associations, brand usage and brand performance: analysis across eight categories. Journal of Marketing Management.
Peilin Phua, Larissa Mae Bali, Zac Anesbury, Byron Sharp (2026). Shape-based assets are strongest: benchmarking distinctive brand asset performance across industries. International Journal of Advertising.
Florian Stahl, Mark Heitmann, Donald R. Lehmann, Scott A. Neslin (2012). The Impact of Brand Equity on Customer Acquisition, Retention, and Profit Margin. Journal of Marketing.
Vithala R. Rao, Manoj K. Agarwal, Denise Dahlhoff (2004). How is Manifest Branding Strategy Related to the Intangible Value of a Corporation?. Journal of Marketing.
Russell W. Belk (2013). Extended Self in a Digital World. Journal of Consumer Research.
Douglas B. Holt (2002). Why Do Brands Cause Trouble? A Dialectical Theory of Consumer Culture and Branding. Journal of Consumer Research.
Markus Giesler (2012). How Doppelg\\\"anger Brand Images Influence the Market Creation Process: Longitudinal Insights from the Rise of Botox Cosmetic. Journal of Marketing.

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