Trademark expert witness William D. Neal is Senior Executive Officer at SDR Consulting and in Modeling Brand Equity, he writes on branding:
The measurement and management of brand equity has become a major issue for marketers and marketing researchers over the last several years. The concept of brand equity goes well beyond the legal concept of a trademark or the accounting concept of goodwill. Brand equity encompasses a gestalt of intrinsic values, or equities, that adds to the tangible, measurable benefits delivered by a particular product or service. These intrinsic equities may include such things as the image imparted to the purchaser, advertising quality, advertising quantity, trust, long term reputation for reliability, customer support, social responsibility, and so forth.
As an example, two unbranded home breadmakers may deliver the exact same set of features in terms of capacity, warranty, ease of use, display, color alternatives, and price. As long as these two breadmakers remain unbranded, they will be undifferentiated and therefore equivalent to the purchaser. But, if we label one of those breadmakers, say, an Acme and the other Braun, most purchasers will attribute additional, intrinsic, value to the Braun product. The two branded breadmakers are no longer undifferentiated and, to most consumers, the Braun breadmaker has more value. Most purchasers associate the Braun brand name with the intrinsic values of quality, durability, reliability, trust, and an image with which they want to be associated.
In the marketplace, this concept of brand equity allows Braun to charge a price premium over Acme. That price differential allows Braun to reinforce their brand equity through improved product quality, higher levels of customer service, investments in socially responsible programs, and more effective promotion.