What is meant by 'brand equity'?

Brand equity refers to the additional value that a brand name adds to a product or service, which originates from how consumers perceive it in comparison to unbranded products. This value is largely built through consumer experiences, brand loyalty, and the overall reputation of the brand in the marketplace. A strong brand equity can lead to increased customer loyalty, enabling businesses to charge premium prices, increase market share, and experience greater financial performance. This perception is cultivated over time through consistent marketing, product quality, and customer engagement, making brand equity a crucial aspect of a brand's overall strategy.

In contrast, the other options focus on different aspects of branding. The legal right to use a brand name pertains more to trademark law and does not speak to the value associated with consumer perception. While total sales revenue generated by a brand and costs associated with maintaining a brand provide some insight into a brand's financials, they do not directly address the intrinsic value derived from consumer loyalty and perception that defines brand equity. Thus, the chosen answer highlights the critical role brand perception plays in creating value beyond mere financial metrics.