Finally, a metric for measuring the comparative equity in a brand name across markets, industries, and products.

For years, people have talked about brand value and brand equity in difficult to define terms.  Brand value was one of three things: 1) the current financial worth of a brand entity, 2) the future financial worth of a brand entity (valuation), or 3) the allowable premium businesses could charge for branded goods over generic goods.  It is nearly impossible to have a meaningful discussion on brand without defining which brand value we're talking about.  Here is my definition:

Brand Value = The current financial cost of building your brand (i.e. if your brand suddenly disappeared, how much would it cost to build it back to the place it is today?)

Brand equity has an even more elusive definition.  As a matter of fact, most of the definitions I listed for brand value are also used for equity!  Some others create subjective scales that measure the quality of the customer experience or the ability of the brand to deliver on promises made in advertising.  Yet other definitions use broad conventions to define the overall reputation of a brand based on media reports and personal anecdotes.  All of these are sufficient definitions, but none of them are consistent enough to provide a cross-industry (or even cross-segment) metric.  Here is my definition:

Brand Equity = The overall ability of a brand to demand a price premium when compared to the market as a whole.

To test my theory on Brand Equity, I performed a very un-scientific survey of several people online.  I asked questions about various automobile brands, soft drink brands, and even personal computer brands.  The results were exactly what I expected.  Through a more refined survey, I suspect Brand Equity tracking will give us a more detailed and informative market health barometer.

Here are a few of my results:

Soft Drinks

  • Coca-Cola: 0.97
  • Pepsi: 0.92
  • Sprite 1.11
  • Dr. Pepper: 1.66


  • Dell: 0.87
  • Apple: 2.00
  • Hewlett Packard: 1.06
  • Gateway: 0.63


  • Audi: 1.23
  • Hyundai: 0.50
  • BMW: 1.49
  • Chevrolet: 0.69
  • Toyota: 0.73
  • Honda: 0.69
  • Jaguar: 1.95

According to my quick (un-scientific) study, Apple is one of, if not the, strongest brand in the market.  This came as no surprise considering the well-known computer manufacturer was able to monopolize an unrelated market with a new product basically overnight (the iPhone anyone?).

Remember, even though Jaguar and Apple are not competitors, the numbers represented here are still comparable - a key difference between my method of brand equity scoring and others'.  A brand equity score of 2.00 means an Apple-branded product can charge roughly double what a non-branded product could in the market.  Conversely, a brand equity score of 0.50 means that Hyundai can only command only half the price of a non-branded product.

What would you supposed your business' brand equity score is?  How about your competitors'?  Would knowing your brand equity score make a difference in how you manage your marketing efforts?  Why or why not?