Question

Brand equity provides a financial advantage for a brand's owner because successful, established brand names have an economic value in the sense that they are

Answer 1

Brand equity provides a financial advantage for a brand's owner because successful, established brand names have an economic value in the sense that they are intangible assets that can be bought or sold.

Explanation:

The commercial value of a well-established brand name based on the perception of the consumer. It is significant as the brand equity reflects in the price of the service or products and this can be considered as an asset to the brand.

The established brand name would help the concern in welcoming a wide range of customers thereby having enough profits and goodwill.

The following factors stimulate the consumers to buy the brands that have high brand equity,

• Fanaticism for the brand
• Brand loyalty
• Professional image
• Social acceptance
• Brand confidence

For example, Apple has a high brand equity. In spite of the similarity in terms of features to other brands, the loyalty of the customers, the demand and price premium remains the highest among all other companies in the consumer tech industry.