Key Difference – Brand Equity vs Brand Image
The difference between brand equity and brand image lies in the broadness of each concept. Branding is a complex concept, and it is becoming an essential marketing scheme. In simple terms, a brand is considered to be a distinguishing symbol, logo, word, sentence, mark or a combination of these items which is used by companies to distinguish their product or service from others in the market. But, brand management is a broad concept which houses a number of related concepts. Brand management provides strategy for the company to increase the perceived value of a brand in the longer run. It provides sustainability and growth for the company through increasing perceived value. Thus, a brand reflects the complete experience of customer interaction with that specified brand. In brand management, brand equity is an important and broad concept, and the brand image is an integral part of brand equity. We will discuss each concept in detail.
What is Brand Equity
Brand equity deals with the brand from a receiver perspective or how the receiver absorbs the firm’s marketing message. Ailawadi, Lehmann, and Neslin (2003, p1) defines brand equity as: “Outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name”. It can be simply understood as the brand’s commercial value which is derived from the consumer perception. Though brands mostly provide a premium on commercial value over a generic product, it does not need to be so.
As per Keller and Lehmann (2006), brand equity is the value accrued through impact at three primary levels. These are customer market, product market, and financial market. These are activities and responses during the formation of a brand. Initially, the seller provokes an offering which in turn leads to a customer mental response (perception, belief, attitudes, etc.). If this mental response stimulates the willingness to pay, it initiates a customer behavior in the product market (sales). This process adds value to the seller via increase of goodwill, market capitalization (stock value increase), etc. This process reflects the three primary levels described by Keller and Lehmann (2006). The customer mindset is the customer market; the sales is the product market while the value sense is the financial market. This process aids us in understanding the formation of brand equity and its complexity. The customer mindset is the most complex part of brand equity. The mindset consists of two components; brand awareness and brand image.
Brand awareness – It’s the memory of a consumer, whether he is able to recognize and recall the brand.
Brand image – Perception of a brand on the basis of associations
What is Brand Image
Brand image can be defined as a unique group of associations which creates a perception about an offering within the minds of target customers. Brand image is the present mindset of a customer about a brand. It reflects what the brand stands for at present in customers minds. Customer beliefs about a brand create the foundation for brand image. Customer perception about an offering transforms into a brand image. It can be either planned positioning in line with seller strategy, or it can be formed by the environment factors surrounding the customer like word of mouth, competitor advertising, usage reviews, etc. Brand image is not necessarily a mental image; it can have emotional attributes added to it as well. It is a bundle of functions and mental connections with the brand that the customers have. Brand image is often not created; it’s automatically formed. The brand image can include to products’ appeal, ease of use, functionality, fame, and overall value from a customer viewpoint.
The associations in the minds of customers shape the brand as well as the character of the organization which the brand is associated to. These associations form by contact and observation by elements which are internal or external to an organization. Internal communication reflects the organizational mission and a positive slogan describing the brand’s key values. External communication may be via recommendations, peer reviews, online polls, etc. These shape the brand image or perception about a brand in customer mind. For example red bull is known for instant energy. Ferrari or Lamborghini is associated with racing and sports driving. Volvo is for Safety. The perception is subjective and can differ between individuals.
They say products are made by companies and brands are made by customers. So, customers expect more when buying brand over a generic product. So, companies should always reinforce the brand image with positive and unique communication tools such as advertising, packaging, etc. These messages should assist the customer to easily differentiate the brand from competitor offerings. A positive brand image can improve brand value for an organization which will boost its goodwill.
What is the difference between Brand Equity and Brand Image?
Brief introductions of both brand equity and brand image have been discussed above. Now let’s compare and contrast the two to highlight the difference between brand equity and brand image.
Characteristics of Brand Equity and Brand Image:
Brand equity: Brand equity has a broad scope and brand image is part of the brand equity in calculating the value of a brand.