Why Is Defining Brand Equities Important?

In the business world, the concept of brand value has gained significant importance over the past few decades. However, just as important—if not more profound—is the concept of brand equity.

Brand equity are the core principles and beliefs that an organization upholds. They define how a brand positions itself in society, how it connects with customers, and what kind of messages it conveys to the world. In other words, while brand equity reflects the material and financial worth of a brand as perceived by consumers, brand equity represent the brand’s inner essence—the emotional and ethical connection that reaches the hearts of its audience.

What Are Brand Equity?

Brand equity refer to the core principles, beliefs, and value system that a company or organization upholds throughout its operations. Simply put, brand equity represent what a brand believes in and what kind of stance or message it aims to convey.

For example:

• Patagonia is known for its commitment to environmental protection and sustainability.

• Nike values human endurance, the power of sport, and the drive to succeed.

• Apple is recognized for its focus on user experience, innovation, and quality.

Because consumers understand and resonate with these values, these companies have earned strong positions in the global market.

Why Are Brand Values Important?

From a business strategy perspective, defining brand values offers several key advantages:

1. Builds Consumer TrustModern consumers care not only about product quality but also about the values a brand represents. Many purchasing decisions are now based on whether a brand aligns with a customer’s personal beliefs.For instance, according to the Edelman Trust Barometer, 64% of consumers prefer to buy from brands that reflect their own values.

2. Differentiates the Brand From CompetitorsIn today’s competitive market where similar products and services are everywhere, clearly defined and consistently communicated brand values can make a brand stand out.Brand values don’t just serve as identifiers—they also create emotional distinction in the minds of consumers.

3. Boosts Employee Motivation and ProductivityBrand values shape company culture. When employees resonate with the brand’s values, they tend to feel more satisfied with their work and perform better.A study by Deloitte found that 88% of employees feel happier working at a company whose values align with their own.

4. Guides Marketing StrategyClearly defined brand values provide direction for marketing campaigns, making them more focused, impactful, and aligned with the target audience.This ensures that messaging is consistent and effective, ultimately enhancing the performance of advertising efforts.

5. Fosters Long-Term Customer LoyaltyCustomers who find alignment between a brand’s values and their own are more likely to build long-term relationships with that brand.This strengthens brand loyalty and increases the Customer Lifetime Value (CLV).

How to Define Your Brand Values

Defining your brand values is a crucial process that requires a structured, thoughtful approach. The following steps can help you clearly define your organization’s core values and effectively integrate them into your brand strategy:

1. Start with the Founder’s Vision, Mission, and the “Why” Behind the Brand

The first step is to understand why the company was founded in the first place—your brand’s core purpose or “Why.”When answering this, consider:

• What problem was your company created to solve?

• What beliefs and long-term vision did the founders uphold?

• What did your brand want to stand for or do differently from others?

Example: The Body Shop was built on a strong foundation of not testing on animals and using natural ingredients. These values around environmental and animal rights protection helped the brand earn global trust.

2. Evaluate Internal Culture and Gather Employee Insights

Your employees are the ones who embody and live out your brand values every day. Understanding the current internal culture and team perceptions is essential.You can use the following methods:

• Employee Surveys: Ask team members what they believe your current brand values are and what they find important.

• Focus Groups: Host group discussions to explore strengths and weaknesses in your organizational culture.

• Leadership Workshops: Bring together leadership to align on shared values and strategic direction.

Example: Google conducts an annual internal survey called "Googlegeist" to gather employee insights on culture and values, which plays a major role in shaping their strategy.

3. Research Customer Values and Align With Your Audience

Strong emotional connections are built when your brand values align with those of your target customers.To do this:

• Conduct Market Research: Identify which values (e.g., quality, affordability, sustainability, social responsibility) your audience prioritizes when choosing products or services.

• Analyze Competitors: See how rival brands connect with consumers through values and identify areas where your brand can stand out.

• Interview Customers: Learn directly from your customers why they chose your brand and what values they expect from you.

Example: Starbucks found through research that its customers valued environmental responsibility and fair trade, which led the brand to define and communicate those as core values—further strengthening loyalty.

4. Clearly and Simply Articulate Your Core Brand Values

After gathering insights, it’s important to distill your brand values into a clear and memorable format. Follow these principles:

• Choose 3–5 Core Values: Focus on a few meaningful values instead of listing too many.

• Use Simple, Understandable Language: Avoid jargon—use clear, relatable terms.

• Make Them Actionable: Define how these values will show up in day-to-day operations and decision-making.

Example: IKEA's brand values are simple and visible in every aspect of their business:

• Simplicity

• Innovation

• Environmental and customer focus

These are easy to remember and observable throughout IKEA’s products, store experiences, and communications.

In Conclusion...

Only brands that clearly define and authentically live by their values can hold a strong position in the market. These values lay the foundation for building long-term, meaningful relationships with customers, enhancing brand reputation, and ensuring operational stability.

When organizations define their values with sincerity and integrate them into real actions, business success becomes more sustainable.

What does your brand believe in?

That’s not just a question you ask yourself—it's the question every customer is silently asking.