The formula to calculate the Brand Equity (BE) is:
\[ BE = \frac{BV + BA + BP + BL + BC}{5} \]
Where:
Brand equity refers to the value and strength of a brand in the market, which is derived from consumers’ perception and experience with the brand. It is the added value that a brand name gives to a product or service, influencing how consumers think, feel, and behave towards the brand. High brand equity can lead to customer loyalty, increased sales, and the ability to charge premium prices. It is built over time through marketing strategies, customer service, product quality, and customer experiences.
Let's say the Brand Value (BV) is 80, Brand Awareness (BA) is 70, Brand Perception (BP) is 75, Brand Loyalty (BL) is 85, and Brand Communication (BC) is 90. Using the formula:
\[ BE = \frac{80 + 70 + 75 + 85 + 90}{5} = 80 \]
So, the Brand Equity (BE) is 80.
Definition: The Brand Equity Index is a measure of the strength and value of a brand in the market.
Formula: \( BEI = \frac{Brand Value}{Total Market Value} \)
Example: \( BEI = \frac{5000000}{20000000} \)
Definition: Developing a brand equity measurement involves creating a systematic approach to quantify the value of a brand.
Formula: \( BEM = \frac{(Brand Awareness + Brand Loyalty + Perceived Quality + Brand Associations)}{4} \)
Example: \( BEM = \frac{(80 + 70 + 75 + 85)}{4} \)
Definition: Valuing brand equity involves estimating the financial value that a brand adds to a company.
Formula: \( BEV = \frac{(Revenue \times Brand Contribution)}{100} \)
Example: \( BEV = \frac{(10000000 \times 30)}{100} \)
