Brand equity refers to the value of a well-known brand name and the ability of its owner to generate more revenue than lesser known brands. It is derived from goodwill and name recognition built over time, leading to higher sales and profits. Positive brand equity provides benefits like commanding premium prices, facilitating brand extensions, and reducing marketing costs. Building strong brand equity positions a company for long-term success as loyal customers are more forgiving of mistakes. Brand equity results from various stages of customer experience, from awareness to loyalty, and must be sustained over time.