While many companies and products have established brand equity, some of the most recognized are Tylenol, Kirkland Signature by Costco (COST), Coca-Cola (KO), Starbucks (SBUX), and Porsche. All of these companies enforce quality control to ensure the best possible service or product is delivered to the client or consumer.
Creating and maintaining strong brand equity is critical to a company's success. When a brand is associated with high quality, trust, reliability, and other positive attributes, consumers tend to flock to these brands almost automatically. For a company, this ensures strong sales, growth, and a positive future outlook.
- Brand equity refers to a value premium that a company generates from a product with a recognizable name when compared to a generic equivalent.
- Creating and maintaining strong brand equity is critical to a company's success.
- Johnson & Johnson's Tylenol and Costco's Kirkland have been great brands for their parent companies.
- Companies that have grown into brand powerhouses include Coca-Cola and Starbucks.
Manufactured since 1955 by McNeil (now a subsidiary of Johnson & Johnson), Tylenol ranks above average in the pain relief category. A study performed by researchers at the University of Chicago showed that, even though Tylenol is "physically homogenous" with generic brands of acetaminophen, consumers without any expert knowledge end up choosing Johnson & Johnson's brand about 26% more than its generic counterpart.
Furthermore, as of Q2 2021, Tylenol is the third most popular drug brand, after Band-Aid and Neosporin. With Millennials, it is the second most popular drug brand. Out of all respondents questioned, 97% have heard of Tylenol.
Tylenol has been able to grow its market with the creations of Tylenol Extra Strength, Tylenol Cold & Flu, and Tylenol Sinus Congestion & Pain.
Since 2009, the Kirkland Signature brand by Costco has maintained positive growth. Kirkland Signature encompasses hundreds of items, including clothing, coffee, laundry detergent, and food and beverages.
Kirkland Signature even includes gasoline, which Costco provides its members. The gasoline is cheaper than standard market rates and is provided at Costco's private gas stations. Adding to Kirkland's popularity is the fact that its products often cost less than other name brands.
Thanks in part to Starbucks' loyalty program, which in Q1 2021 had more than 21 million members, up 15% year over year, Starbucks is one of the most powerful brands in the world. Rated the fifth-most-admired company in the world by Fortune magazine, Starbucks is held in high regard for its pledge to social responsibility.
Starbucks' main competitors are Dunkin Donuts, Costa Coffee, McDonald's, and Tim Hortons—companies with their own strong brand equity.
With more than 32,000 stores around the globe, Starbucks remains the largest roaster and retailer of Arabica coffee beans and specialty coffees. Among Fortune 500 rankings for 2021, Starbucks ranks no. 125.
With a brand value of $64.4 billion according to Forbes's 2020 list, up 9% from 2019, Coca-Cola is often rated as the best soda brand in the world. However, the brand itself represents more than just the products; it's symbolic of positive experiences, a proud history, even the U.S. itself.
Also recognized for its unique marketing campaigns, the Coca-Cola corporation has made a global impact on its consumer engagement. According to Fortune, Coca-Cola is the 22nd most admired company in the world. Among beverage companies, it ranks no. 1. For the Fortune 500 rankings, Coca-Cola comes in at no. 93.
Coca-Cola outsells its historical rival, controlling almost 45% of the soft drink market while Pepsi controls a little less than 25%. The next largest share of the market, approximately 19%, is controlled by Keurig Doctor Pepper. It appears that Coca-Cola is winning the cola wars.
Porsche, a brand with strong equity in the automobile sector, retains its image and reliability through the use of high-quality, unique materials. As a luxury brand, Porsche provides owners of its vehicles not only with a product but an experience. In comparison to other vehicle brands in its class such as Mercedes Benz and BMW, Porsche ranks no. 1 in terms of automobile brand rankings, according to Consumer Reports.
The Bottom Line
Brand equity is built by a company over time through the delivery of high-quality products, strong marketing, reliability, and positive press. When a company creates strong brand equity (and with that, trust), it is a key factor in its continued success. Once a consumer becomes loyal to a brand, they perceive it as having an added value that they will not get with another brand. This sets the stage for a company's continued success, growth, and possible domination of its market.
How Much Is Apple's Brand Worth?
In 2021, the value of Apple's brand is $612 billion. It comes in second as the world's most valuable brand, after Amazon, whose brand value is $638 billion.
How Can a Company Build Brand Equity?
Companies build brand equity by creating a positive experience and association with their products that either cannot be found with competitor products or that is better than competitor products. To build brand equity a company must first start building brand awareness to achieve brand recognition, deliver a high-quality product, and then create a positive experience for the customer to establish brand preference.
What Are the Most Valuable U.S. Brands Worldwide?
The most valuable brands in the U.S. are Apple, Amazon, Google, Microsoft, Walmart, Facebook, Verizon, Home Depot, AT&T, Walt Disney, and Starbucks.