Question

What are the benefits to an organization of brand equity?

Answer 1

Brand Equity:

Brand equity can be defined as an organizations brand value which it generates from its product or services. A brand equity can be created through focusing on few factors like quality, reliability, easily recognisable and making the products memorable.

The following are the benefits for an organization through brand equity:

1. When an organization concentrates on positive brand equity, customers would be ready to pay a high price for their products even when the competitors offer it with lower price.

2. The organization can increase its margin by concentrating on not incurring the higher expenses while production but fixes a higher price for their product.

3. This enables them to make bigger profit in the business market.

4. The perception the consumer holds about the organization would be positive which in turn give a positive business compare to competitors.

5. Intangible values such as awareness and good will is also created by these brand equity.