Question

In: Operations Management

When do firms compete more - when brand equity is an important factor in consumers' decision...

When do firms compete more - when brand equity is an important factor in consumers' decision making or when brand equity is not so important (i.e., consumers focus on product features before thinking of brand name?)

Both of these are true

None of these are true

Firms compete more when brand equity is not important

Firms compete more when brand equity is important

Solutions

Expert Solution

Ques- (a) Both the statements are true. Brand equity has three essential segments: buyer recognition, negative or beneficial outcomes, and the subsequent worth. First, buyer discernment, which incorporates both information and involvement in a brand and its items, fabricates brand value. The observation that a buyer section holds about a brand legitimately brings about either positive or negative impacts. On the off chance that the brand value is sure, the association, its items, and its financials can profit. On the off chance that the brand value is negative, the inverse is valid.

At last, these impacts can transform into either substantial or elusive worth. On the off chance that the impact is certain, substantial worth is acknowledged as increments in income or benefits and impalpable worth is acknowledged as promoting as mindfulness or altruism. On the off chance that the impacts are negative, the unmistakable or immaterial worth is additionally negative. For instance, if shoppers are eager to pay more for a conventional item than for a marked one, the brand is said to have negative brand value. This may occur if an organization has a significant item review or causes a broadly plugged ecological calamity.


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