What is brand equity?

• A. The cost of branding
• B. The value added to a product or service based on the brand's reputation and recognition in the market
• C. Market share of the brand
• D. Advertising reach

Answer: (B)

Brand equity is the extra value a product or service gains because of the brand's reputation and market recognition. This value comes from how well people know the brand, the trust and positive associations they have, and the loyalty it inspires. That combination means customers may be willing to pay more or choose the brand over competitors even when the basic features are similar. So describing brand equity as the value added to a product or service based on the brand's reputation and recognition in the market captures this intangible, market-driven value. The other options describe costs or simple metrics like branding expense, market share, or advertising reach, which don’t reflect the inherent value the brand’s identity adds.