Difference Between Brand Identity and Brand Equity

Edited by Diffzy | Updated on: October 08, 2023

       

Difference Between Brand Identity and Brand Equity

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Introduction

Brand Identity and Brand Equity are important concepts that should be known to build a strong brand identity for a company. They are very significant in forming a brand image in the minds of the people. They guide a person's perception of the brand and communication with the brand. Brand identity refers to the identity of a brand, the characteristics such as brand logo, graphics, tagline, and many such things that define a brand. Brand identity is very important for progress in business because this leads to consumers remembering the brand, maybe because of its logo or tagline, which is why it is necessary to establish a strong brand identity. 

A strong brand identity is a plus point for a brand in this very competitive world. Brand Equity can be basically defined as how much consumers value a brand. It is nothing more than the status of a brand as perceived by the consumers. So, concerning this, brand equity is more important than brand identity because, ultimately, what matters is how much love a brand receives from its target audiences. So, establishing a strong brand identity is a must as it also benefits by encouraging brand loyalty within the customers and helps a brand to sustain in today’s competitive market. 

Brand Identity vs. Brand Equity

The terms brand identity and brand equity are often confused by people, so it is important to know how both of them are different. Brand identity is nothing but the characteristics that define a brand, such as the brand logo and tagline. These are important to create before establishing a brand otherwise, people won’t be able to recognize a brand just by its name. The visual features play a huge role of appealing in human mind. So visually appealing brand logos and taglines are created for a brand and when they do act considerably, they are customized according to the demands of the market. Brand equity, on the other hand, is the status or reputation of a brand among its target audiences. Brand equity can be established only after creating a brand identity because a brand should exist first for people to judge it. Brand identity helps in increasing brand awareness so, it is necessary to create a strong brand identity. It is also necessary to build a strong brand equity through good customer experience because both of these are necessary to survive in this competitive world. 

Difference Between Brand Identity and Brand Equity in Tabular Form

Parameters of ComparisonBrand IdentityBrand Equity
MeaningThe characteristics that define a brand’s identity to the people such as brand logo, tagline are actually the components of brand identity.The extent of love that a brand receives from its customers or how customers perceive a brand is brand equity.
People Owning itBrand identity is something that is created by a company and so the company is its owner.Brand Equity is the reputation of a brand in the minds of the people. So, it is owned by the people. The public only knows how they value a brand.
Important ElementsIt consists of a logo, graphics, tagline, color, and design.The mindset of the consumers is important here depending on how the products are marketed.
Direction of StrategyThe direction of the corporate strategy is from top to bottom.Here, the strategy is directed at customer reviews. It flows from the bottom to the shelter. It attempts to convert the negative reviews into positives.

What is Brand Identity?

Brand Identity refers to all the characteristics, such as the brand logo, tagline, design, and graphics, that define the identity of a brand and make people remember the brand through it. It is the personality of a brand which helps the consumers to distinguish it from other brands in the competitive market. It is like an individual's personal identity which makes a person unique, similar is the brand identity. It should be unique. The design of a company's brand identity shapes the company. It depends on the structure of the brand identity according to which a company functions. The brand identity is the outward expression of the company’s vision to the people. It is completely different from branding. Branding refers to a marketing practice of giving more shape to a brand and promoting a brand through brand awareness, where the brand identity is used to make a brand recognizable. The brand identity is responsible for establishing a connection between the company and its target audience because through this, consumers will recognize a brand.

It is very important to establish a strong brand identity in the competitive product market. But before establishing a strong brand identity, the company must be clear regarding what it represents as a brand. This includes: -

  • Understanding one’s mission as in what is the point of the brand.
  • Values are followed by the brand that the company also wants its audience to follow.
  • The kind of personality the company would want its brand to have through which it will influence its target audience.
  • The uniqueness of the brand makes it stand out in the competitive market.
  • Keeping clear the brand voice to avoid any miscommunication or misunderstanding.

The company should remember these points and try to improve them if rectification is needed because this increases the effectiveness of a brand, after which building a strong brand identity is like an added advantage. There are various ways of building a strong brand identity, and some of the most effective strategies are: -

  • Researching and Analysing the Product Market
  • Identifying the Target Audience
  • Determining the Brand Message and Spreading it

Researching and Analysing the Product Market

A complete SWOT analysis should be conducted to determine the strengths and weaknesses of the company and its vulnerability to any potential threats related to business and planning of projects. This helps the managers of the company to completely understand and get a grip on the situation around them and to devise better strategies and ways to get out of the danger. The analysis of the product market helps in determining the current trends, what is new in the market, and the demands of the customers. It also helps to identify the business strategies of the competitors. This helps in keeping track and benefits the overall management and functioning of the company as, according to the analysis, the brand identity can be used.

Identifying the Target Audience

This is essential for effective marketing of products. The target audience includes those people who have a high probability of getting converted into customers. So, interviews and surveys should be conducted to identify the target audience of a brand. 

Determining the Brand Message and Spreading It

A brand's target audience associate and identify with a brand based on its brand message, what it communicates, and how it communicates its message. Spreading different types of messages about a brand can be confusing for the consumers, making them want to shift to another brand for transparency, which disrupts brand loyalty. So, the company should be clear about spreading only one message of the brand, which should fit with the vision of the company, and it should remain consistent. The brand identity should also be built according to this brand message so that it is easier for people to understand the brand message and identify with it. The brand message should be simple but witty and unique. Brands that carry on consistency have a better chance of sustaining in the competitive market and retaining loyal customers.

What is Brand Equity?

Brand Equity refers to how people associate with a brand. It is the status or reputation of the brand in the mind of the consumers, like if consumers are valuing the brand. Business has become very competitive these days and customer behaviours have also changed accordingly. People do not purchase products easily these days. Quality is important to them, but so is a brand’s reputation. The sale of a brand considerably goes down if it loses its reputation and status in people's minds. So, boosting a brand's status in this competitive market is very significant along with keeping up a good quality. A strong brand equity is created through good customer experience, which raises the status of the brand in the eyes of the customers. 

The relationship between a brand and its customers is created through various steps. 

  • Firstly, the brand creates its identity through various defining characteristics such as logo, graphics, and tagline. This is called the brand identity, through which consumers can recognize and remember a brand. It distinguishes a brand from its competitors.
  • Then, brand awareness campaigns go on where the brand is introduced to its target customers through advertising. This helps in highlighting the brand among its competitors and making it noticeable.
  • Consumers can then recognize the brand in a store or a mall, and they go for a trial. If the experience turns out to be good for a customer, then they add it to their choice list.
  • When customers continuously have good experiences with a brand, then they not only suggest it to others but also become a part of brand loyalty, which means they will make all their future purchases from that brand only. The trust gets built up and through this, a strong and positive brand equity gets created. 

There are various strategies for building up a strong brand equity which are: -

  • Spreading Brand Awareness
  • Communicating what the Brand Stands for
  • Grow Positive Customer Experience

Spreading Brand Awareness

The first step in building up a strong and positive brand equity involves spreading awareness about the brand by conducting brand awareness campaigns, otherwise, people will not be able to know about the brand. Moreover, the awareness campaigns should be held according to the message of the brand, so that customers respond to the brand in the way intended. There are a few ways to do this, such as: -

Providing Good Customer Service

  • Uploading blogs, Instagram, and Facebook posts about the products of the company to stay connected with the consumers.
  • Keeping the brand message consistent.

Communicating What the Brand Stands for

A company should not only provide quality products to its customers but maintaining the social and psychological aspects is also important. Producing good quality products along with keeping up with the social values may increase the company’s reputation as many customers may associate with those values, which is why this may appeal to those customers. It can improve the brand's image in the consumers' minds.

Grow a Positive Customer Experience

When consumers have a continuous line of good experiences from a brand, then they tend to share their experiences with others thus recommending them about the brand. This also leads to brand loyalty as the trust gets built, which is why consumers tend to purchase from the same brand. This increases positive feelings among consumers, such as trust, security, and excitement.

Main Differences Between Brand Identity and Brand Equity in Points

  • Brand Identity refers to the identity of a brand that is defined by various characteristics such as brand logo, tagline, and graphics. It is like an identity card for a brand through which customers can recognize and memorize a brand. It distinguishes a brand from its competitors in the market and makes it unique. Brand Equity, on the other hand, is the reputation that a brand holds in the minds of the people. It is the status of the brand or how consumers value a brand, whether positively or negatively. It is how consumers associate with a brand.
  • The brand identity depends on the company. They are the owners because they make it. They decide its design, look, and give it existence, and through this, consumers come to know about a brand and recognize and memorize it. It consists of logos and taglines, which are all decided by the company members. But brand equity, on the other hand, depends on the customers because it is how customers associate with a brand. They are the owners here. The brand's reputation depends upon them that how they value the brand. The customer's mindset is the most important here.
  • Brand identity consists of the brand logo, graphics, and taglines. It is the physical appearance of a brand, but brand equity relies on the customer's mindset. The customer's mindset is the main element of brand equity. In brand identity, the direction of strategy is from top to bottom, whereas in brand equity, the focus is on customer reviews. The main target is to convert negative reviews into positive ones through good experience.

Conclusion

Hence, brand identity refers to the identity of a brand through which customers recognize and memorize a brand. It consists of the brand logo and taglines. Brand equity, on the other hand, is the reputation and status of the brand in the minds of the customers. The mindset is the important element here. The company is the sole owner of brand identity, whereas brand equity depends on the customers who are the owners here.


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"Difference Between Brand Identity and Brand Equity." Diffzy.com, 2024. Mon. 10 Jun. 2024. <https://www.diffzy.com/article/difference-between-brand-identity-and-brand-equity>.



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