What is Brand Equity Model?

Brand equity is the value of a brand based on the strength of its customer loyalty and recognition. It is determined by the amount of positive sentiment a brand has among its customers, the perception of its quality, and its ability to command a premium price.
Brand equity can also refer to the value of a company's brand name, symbols, and trademarks. Brand equity is important because it provides a company with a source of competitive advantage in the marketplace.
But the concept of attaching a value to a brand is very interesting and has a deeper meaning to it. In a CX Study with 102 CX experts, Daniel Cady, Director of Creative Services at PeaTos, stated, "A brand has to recognize what makes it "special" to consumers. That's when they become truly irreplaceable. You have to make a significant impact on the people who matter the most to your business - the customer."

Based on numerous research studies, it has been established that the brand is one of the most important intangible assets of a company which helps to improve the financial performance of a company. Out of many different types of research and tools developed, the Brand equity model is a significant one.

Based on the various brand equity models, it is evident that brand equity is controlled by different components such as quality, performance, brand awareness, and loyalty.

Brand equity models are designed to establish the way in which brand value is created for a brand. Each of the brand equity models offers a deep insight into the brand value concept and the ways to evaluate it.

Brand equity models are used to design marketing strategies at various stages. Some of the significant actions that can be taken by using these brand equity models are to improve the perception of a product, to get more loyal customers, to get a competitive edge, etc.

Types of Brand Equity Models

1. Aaker Model 

David Aaker has defined brand equity in his Aaker Model. He defines brand equity as a group of assets and liabilities that can be directly associated with the brand and that which adds value to the product.

Aaker model consists of 5 components:

Aaker Model

Brand Loyalty

This explains the level of loyalty that a customer shows toward a brand

Brand Awareness

This is the extent to which the brand is popular in the market

Perceived Quality

The image of a product and its quality in the eyes of the customers

Brand Associations

The level of recognition that a brand has in its product category

Proprietary Assets

The number of patents, intellectual property rights, trademarks, etc. that a brand owns.

These components of the Aaker model help to influence the customer’s choice. A customer will be willing to associate with a brand that offers higher quality and satisfaction.

2. Keller’s Model 

Kevin Keller has made a signification contribution to the branding theory and has rolled out the concept of customer-based brand equity. Keller defines a brand as an effect that emerges out of a favorable association with a brand.

Keller’s model seeks to get answers to 4 questions:


Who are you?

The first step is to create awareness about the brand and build a strong identity. When people have not heard or seen a product, it is difficult to sell the product.

It is important to know your customers and what they expect from a brand. When you start building a brand identity, it becomes easier to catch the attention of the consumers.

You should ensure that your brand stands out, and customers are aware of your brand can recognize your brand.

What are you?

The next step is to communicate to the users about what your brand means and what does it do. You should explain the performance of your product, which means that your brand should be reliable, should offer good service, it should be durable, should have service effectiveness, good style, and design, and reasonable price.

It is important to explain how your brand is able to meet the needs of the customers and connect with them on a social and psychological level. This can be done using a variety of marketing strategies such as direct promotion, sharing customer experiences, or using social proof.

What do I think about you?

In this stage, the brand response is obtained. The brand response can be either a feeling or a judgment about a product. Consumers always have a feeling or judgments about a product. 

When a product meets the expectations of users, it evokes a positive feeling about your brand. A product has to be attractive, satisfy the needs of the consumers and should be unique when compared to the competitor products.

What is the association with you?

In this step, the relationship between the brand and the customer is strengthened. The brand response that came from the earlier stage is now converted into an intense and emotional bond between the brand and the customer. This is the final stage and the most difficult to achieve.

When the customer is in a good relationship with the brand, they often make repeated purchases and become loyal customers.

These steps in Keller’s brand equity model provide direction to build and measure brand equity.

3. Brand Asset Valuator (BAV) Model 

BAV is a brand equity model that gives the brand equity value of many brands and helps to compare brand equity across many brands.

As per the BAV model, collecting consumer insights will help to improve brand health and the future of a brand.

The four key components of brand equity are:



This is the extent to which the brand is different from another brand. A brand should be unique and stand apart from its competitors.


This is a measure of how relevant your brand is for consumers. It is important to know if your brand is relevant to consumers in terms of its cost, needs, and convenience.


This is a measure of how well a brand is perceived and respected for its quality and performance. This depicts the response of the consumers to the growing popularity of the brand or the decline of the brand.


This measures the level of understanding of the consumers relating to identifying the brand. Knowledge can be built by brand-building exercises.

The BAV model tries to ascertain how the differentiation, relevance, esteem, and knowledge are related to each other for the determination of the brand strength.

4. Brandz Model

Brandz model was developed by the marketing research consultants Millward Brown and WPP.  BRANDZ is a tool that is used to diagnose and predict brand equity. In this model, data is collected with the help of interviews and publicly available data. Consumers of different brands are asked questions about the brand that they know.

This model is developed based on five steps that are in sequential order.  Each step in this model is a continuity of the previous steps and should be conducted in the same order.



Do I know about it?

This is a stage of building familiarity with the product based on past trials and brand promise.


Does it offer me something?

Once people know about a product, the next step is the question of relevance. Does the product offer what they want? Is the product relevant to consumer needs?


Can it deliver?

When the product is found to be relevant to consumers, the next step is to check if the product delivers what it promises. Is the product performing as expected or as promised?


Does it offer something better than others?

Once the product is known to deliver what it has promised, the next step is to check if the product has any special bonding or preference over all the other similar products in the market.


Nothing else beats it.

This is the last step, where the product has proved to be excellent and has built a strong bond with the user. This will eliminate all other competing products as the customer is now emotionally and psychologically bonded with the product and is not ready to compromise with any other product.

Importance of Brand Equity Models

With the evolving marketing strategies, the most common factor was that customers became the center of all strategies. Companies soon realized that the customer is the king, and they can flourish only when the customer is happy. The customer can be made happy by offering unique and quality products that in turn, build a strong brand. When customers are able to identify the brand, they start connections and slowly build a strong bond with better-performing products. All this comes under brand building exercise, which ultimately increases brand equity for the company. 

Brand equity models have been designed and prepared by various researchers to study and understand consumer behavior. Brand equity models have proved to be a tool that helps in the diagnosis and to predict the strength of a brand. 

In today’s world of the internet, there is a huge amount of data that is available about consumers. But not many know how to convert the data into information that can be used to understand consumers and their needs. The brand equity model helps to know the most important components of consumer behavior and also helps to eliminate unnecessary noise from the data. 

Ultimately the focus of every brand equity model is to increase the brand equity of an organization.