What Is the Difference between Brand Loyalty and Brand Equity?

M. Kayo

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. It 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 they typically continue to buy the product if it keeps doing what it promises.

Companies may use a consumer's loyalty to a brand to motivate them to try new products.
Companies may use a consumer's loyalty to a brand to motivate them to try new products.

Brand loyalty is the result of an effective marketing or advertising campaign, or of good experiences with a particular product or brand, and it 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 requires accumulated positive experiences over an extended period of time.

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 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 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. LOyalty cannot always be bought, however. For example, the Ford Motor Company attempted to use Ford's existing consumer loyalty and equity to sell Edsel automobiles in the early 1960s, a plan that backfired when consumers rejected the car in spite of the best marketing and advertising efforts that money could buy.

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