What Is the Difference Between Brand Loyalty and Brand Equity?

While brand loyalty and brand equity may be inextricably connected, there are some big differences between the two. Brand loyalty refers to the consumer's desire to continue to purchase a specific brand of product. Brand equity is the consumer's perception of a particular brand or name, developed through advertising and marketing efforts. Marketing for high brand equity will create advertising that attracts, fosters, and maintains an ongoing relationship between consumers and the product. This ongoing relationship and positive perception creates brand loyalty in the consumer's mind. People like a particular product for many different reasons and continue to buy the product if it keeps doing what it promises.

Brand loyalty is the result of an effective marketing or advertising campaign or of good experiences with a particular product or brand and typically requires a lot of time — sometimes years — to build. There are many reasons that consumers develop loyalty to a particular brand, including a connection to some pleasurable experience or the use of a product or brand by previous generations in their family. The long process of building brand loyalty requires accumulated positive experiences over an extended period of time. The connection between brand loyalty and brand equity is in the ways in which they both affect one another.

Producers want every new product or brand name to attain brand equity. New products that are unknown to consumers are introduced through a series of mapped out marketing plans and through advertising. A company may willingly pay millions of dollars to a marketing firm to develop the best and most attractive personality for a new product. They do this by finding the most cost-effective methods of using different media, like television, radio, print, and online outlets. Next, an advertising agency, a master at touting the best features of a product, creates an ad campaign designed to entice consumers to try the new product and begin the process of developing and brand equity.

Both brand loyalty and brand equity are developed by either a consumer's perception or experience with a brand or through carefully planned and orchestrated marketing and advertising efforts. Some products will use a consumer's loyalty to a particular brand to introduce or sell similar products, the hope being that loyalty to one brand will be transferred to all other products within that brand. Brand loyalty and brand equity cannot always be bought, however. For example, the Ford Motor Company attempted to use Ford's existing consumer brand loyalty and brand equity to sell Edsel automobiles in the early 1960s, a plan that backfired when consumers rejected the Edsel in spite of the best marketing and advertising efforts that money could buy.