Importance of Brand Equity in B2B

Ivana author

Ivana Vnučec

Content Writer

⏱ Reading Time: 8 minutes

The concept of brand equity has aroused deep interest among marketing managers, business strategists, researchers, and academics. For its important role in the business today, significant research efforts have been channeled into defining and building brand equity.

🚀Read: Customer Experience Guide: How to Put your Customers First? 🚀

The financial community has also placed remarkable prices on the value of successful brands. How to build the demand for your product and more importantly, how to invoke customer loyalty is something that is on everybody’s mind lately. In this article, we will be talking more about brand and brand equity so keep scrolling if this is a subject that is also on your mind! 

What Defines a Brand?

Although we are all familiar with what brands mean today, be might not be aware that they are not something new. Branding is not a new concept and has been around for centuries.

In fact, the word brand is derived from the Old Norse word brand, which means “to burn”.

Word “to burn” before was related to marking animals to identify them and nowadays we could relate it to burning desire to this particular brand.

According to Kotler, a brand, as we know today, can be defined as a name, term, sign, symbol, or design, or combination of them. This intends to identify the goods and services of one seller and to differentiate them from those of competitors

Related: 7 Marketing Hacks That Will Make Your Brand Grow Faster

Except for name and logo, the brand has to have “brand identities”. One of these identities is also equity.


Picture 1. Examples of brands you can name just by looking at their logo

Brand Equity Definition

A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless.

– Stephen King WPP Group

David Aaker defines brand equity as consumer perception of the value added to the functional product or service through association with the brand name.

From a financial point of view, a company may view it as a future discounted value of the profit stream that can be attributed to the price premium or enhanced loyalty generated by the brand name.

In words of management, it is a set of assets including brand awareness, loyalty and brand associations. All of them are strongly related to a brand name or symbol.  

There have been two general motivations for studying brand equity:

  • Financially-based motivations to estimate the value of a brand
  • Strategy-based motivations to improve marketing productivity and efficiency

Introduced by Procter&Gamble in the 1880s, Ivory soap is a prime example of creating and brand equity as we know today. The soap’s brand name and the aggressive national advertising provided a start toward high brand awareness.

Following that, brand equity is a set of brand assets and liabilities linked to a brand. These added assets make value provided by a product or service to a firm and to that firm’s customers.

Brand Equity Model

The brand equity is best presented in Keller’s Brand Equity Model. It is also known as the Customer-Based Brand Equity (CBBE) Model. The concept behind the CBBE model is simple.

In order to build a strong brand, you need to shape how customers think and feel an out your product. You need to build the right type of experience around your brand. This will make your customer have specific thoughts, feelings, opinions, and perceptions about it.

The Brand Equity Model can simplify be shown as a pyramid.

On the bottom of the pyramid, there is brand salience. Brand salience answer on a question “Who are you?. It is related to brand awareness and identity.

Below the pyramid are brand performance and brand imagery. They answer on a question “What are you?” and show point of differences.

Further below are brand judgments and brand feelings. The answering question “What about you?” they show reactions.

On top of the pyramid, there is brand resonance. It answers the question “What about you and me?” and is related to loyalty.

Brand resonance is the most complex level of brand and it consists of 4 elements. These elements are (1) behavioral loyalty, (2) attitudinal attachment, (3) sense of community and (4) active engagement.

In terms of the CBBE model in real brands, we will show an example of Nike. On the bottom, for Nike salience is that it is a leader in the footwear industry. Below are high technical performance and symbols of status and cool accessories in people’s eyes.

In place of judgments, Nike is a high-quality and innovative profiled brand. Feelings it support are an achievement and ability to do anything. On top of the pyramid, there is the loyalty of people who buy sports shoes.

Building Strong Brand Equity

To build strong brand equity, it is crucial to make sure that brand strategy match with the corporate strategy. If there are any misalignments, it will soon be spotted, first by employees, and then by customers.

Keller explains how a strong brand is built or created. According to this model brand building consists of four steps the success of each depends on the previous one.

These four steps are as follows:

1. Identification of the brand with customers and association of brand in the customer’s mind.
2. Linking tangible and intangible associations with certain properties and be in the customer’s mind.
3. Obtain customer responses to brand identification and brand meaning.
4. Convert this response to a reliable loyalty relationship. 

They represent the following set of fundamental questions that consumers ask about brands.

Also, the crucial for Customer-Based Brand Equity Model are:

1. What is your brand identity?
2. What is the brand’s meaning?
3. What do I think about you and your responses?  
4. What kind of relationships we have?


B2B Brands’ Needs

Brand equity can help not only to improve business-customer relations but also business-business relations. When it comes to a business, there are some specific needs that brands have to pay attention to. Strong equity can help in following specific areas of improvement.

Also, according to McKinsey’s research, these are also the most important functions of brands in B2B:

Increase information efficiency

Branded products make it easier for customers to gather and process information about them. From its name, it is easy to connect their manufacturer’s origin, quality, etc. in a confusing environment. Moreover, branded products have recognition value meaning. This meaning can make customers find their trusted brand in a very easy and fast way.  

Risk reduction

Brands provide continuity in the predictability of the product benefits. Brands can legitimate buying decisions in B2B where buyers are highly risking adverse. Good relations between businesses provide fewer fluctuations and better connectivity.

Value-added creation

In B2B, the additional value provided by brands is not in a purely self-expressive way as it is in B2C. Nonetheless, it is still important to present your employees and the whole corporation through your brand.

The Role of Brand Equity in B2B

When talking of brands, most people think of Coca Cola, Apple, and Gucci and other strong brands of business-to-consumers (B2C) markets. In the other hand at business-to-business (B2B) markets people, can’t remember so many strong brands.

However, there are some of the strongest brands belong to B2B markets. Brands such as IBM, GE, Siemens, Intel, Boeing, and FedEx, are B2B examples even though some of them also operate in the B2C segment.

Brands in B2B markets serve purposes the same as ones in B2C markets. For them, it is important to have strong brand equity.

Some important general purposes common in both B2B and B2C are:

• Identify the product, services, and businesses
• Differentiate products and services from competitors
• Communicate the benefits and value propositions
• Guarantee the quality, origin, and performance
• Reduce risk and complexity of buying decision


Picture 3. Brand equity values

Measuring Brand Equity

Opinion researchers define and measure brand equity in terms of the knowledge consumers have of a brand. To this end, numerous published models and measurements of brand equity are available.

One of them is Six-Stage Brand Development Model. It has 6 components of equity. First is the recognition of the brand.

If your brand lacks recognition in the marketplace it’s crucial to develop your brand strategy and enaction it tactically with a fully integrated branding plan in order to raise its profile.

The second is that your brand must be memorable.  The brand should be among the first called to mind when customers decide what to purchase.

That A Brand Should Be Viewed Favourably is the third stage. As we often remind our clients, it’s not enough for people to be aware of a brand. The target audience must also believe the brand is able to meet their needs with trust and respect for what the brand represents.

A distinctive brand makes a customer feel compelled to buy it because they think the product offers a unique brand promise unlike what any competitor can provide.

The fifth stage is being preferred. Ideally, customers will prefer your brand over all others, and be willing to purchase it repeatedly. If the preference for your brand is low, you’ll need to evaluate why through a brand audit and then implement changes based on the analysis and findings made.

Finally, customers need to be satisfied with your brand. If that isn’t happening, evaluate where the discontent lies and work on improving your product.

Read How to Build and Measure Brand Equity


The ongoing globalization, together with several important factors such as appealing substitute products, more educated and fragmented customer tastes, are driving forces of hyper-competition.

Hyper-competition markets are characterized by intense and rapid competitive moves. If they want to follow, competitors have to move very quickly and constantly try to surpass the advantages of rivals. One of the most important roles to keep your partners in brand equity.

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Importance of Brand Equity in B2B was last modified: June 30th, 2021 by Milica Vujasin
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