Sample Essay

Brand equity can be viewed from three different perspectives, to say the least:

  1. Financial – This is a highly important perspective that allows companies to measure the amount of brand premiums customers are willing to pay for their product / service over a generic product. For example, if the customer is willing to pay $100 more for branded apparel over the same unbranded one, this extra premium provides very important information about the brand’s value in the minds of its customers’.
  1. Brand Extensions – Companies enjoying successful positive brand image usually capitalize on their equity to create related products and services. Major advantages of leveraging from the current brand’s equity are high amount of savings in advertising, while also lightening the risk of rejection by the consumers. In some cases, these extensions serve as a “silver bullet” to re-launch the brand, hence resulting in additional successes by the core brand.
  2. Consumer based – A strong brand enforces a positive attitude of the consumer towards the product associated with the brand. This attitude is affected through experiences of the customer with the brand. This suggests that trial experiences are highly important before advertising / launching a brand.

There are some other benefits associated with brand equity as well, such as:

  1. It facilitates the organization in making predictions about future income
  2. It is a valuable asset that can be sold or leased
  3. Brand equity increases cashflow in the company by increasing the market share, reducing promotional costs and through allowance of premium pricing.

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