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Home→The Westburn Dictionary of Marketing→B→brand equity

brand equity

Definition:
The value imputed to a brand which recognises its worth as an asset . This value reflects the market share held by the brand, the degree of loyalty and recognition it enjoys, its perceived quality and any other attributes which distinguish it positively from competitive offerings e.g. patent protection, trademark etc.. There is considerable debate as to whether brand equity should be included in a firm's BALANCE SHEET in the way in which "goodwill" may be included. Those who argue that it should point to the difference between the acquisition value of a company and its balance sheet value without brand equity as an indicator that the brand equity may be well in excess of all the firm's other assets. For example Nestle paid five times the balance sheet value of Rowntree Mackintosh in order to secure ownership of its brands such as Kit-Kat, Yorkie etc..

Cross-References:
[balance sheet]

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© Westburn Publishers Ltd 2002, The Westburn Dictionary of Marketing edited by Michael J Baker, ISBN 978-0-946433-01-8. www.themarketingdictionary.com. Entry: [Michael J. Baker], [1998].