What Is Brand Equity?

Explain the concept of brand equity

1 Answer

  1. Brand equity is the outcome of all the effort and investment a firm makes over time on a brand.
    It is the monetary worth of all the attributes the brand carries.
    It is the combined measure of three sets of metrics:
    1. Customer knowledge about the brand
    2. Customer preference for the brand and
    3. The resulting financial performance/potential of the brand
    Measurement of brand equity poses problems because of the intangible nature of several of its components. Though brand equity has reached the status of asset, but it has not been included in the balance sheet yet.
    Brand equity has material benefits to the firm. It turns out as income and profits.
    When the brand has high brand equity means that consumers are willing to pay a premium for the brand and its extension.
    One of the measure of the health of a firm is the health/equity of the brands owned by them.

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