Brand equity is the premium value a product commands because of its brand name. When customers pay more for Nike than an equivalent no-name sneaker, or choose Glossier over a cheaper alternative with similar ingredients, they're paying for brand equity.
Brand equity comprises awareness (do customers know the brand?), associations (what do they think of it?), perceived quality, and loyalty. Strong brand equity enables premium pricing, easier product launches, and resilience during competitive pressure.
Building brand equity requires consistent investment in product quality, customer experience, marketing, and brand communication over time. Frequent discounting can erode brand equity by training customers to wait for sales and reducing perceived exclusivity.