BRAND EQUITY

Brand equity is the added value that a company gains from having a brand that consumers recognize and trust, and for which they are willing to pay a premium. A brand is a familiar name, logo or symbol that marks products or services and helps consumers recognize them and associate them with certain qualities, values or characteristics. A brand-name product has a higher value than its generic equivalent because it is known to consumers and is therefore perceived as being more trustworthy and familiar.

Brand equity also mean that a brand is easily recalled, or that it comes to mind when a consumer thinks of a certain category of products or services. This familiarity leads to higher consumer confidence in purchasing the product and therefore translates into higher sales, more customer loyalty and ultimately higher profits. Consumers often pay a premium for brand equity because they believe certain brands have higher value or quality. Consumers also recommend brands to one another which also increases the brand name.

If a consumer likes a brand and it is a well known one then the particular brand have high brand equity. The companies that enjoy high brand equity are very careful about their brand's image and to make it as widely recognized as possible. Brands that have a transparent, distinctive and extremely recognizable identity often develop the highest brand equity

Companies also estimate brand equity by comparing their sales to other companies who sell the similar products without the brand equity. The stronger the brand, the more it guarantees future profitability from ongoing sales of the products associated with it.

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