16
Brand equity assets generally add or subtract value for customers. They can
help them interpret, process, and store
huge quantities of
information about products
and brands. They also can affect customers’ confidence in the purchase decision (due
to
either
past-use
experience
or
familiarity with
the
brand
and
its
characteristics).
Potentially more important is the fact that both perceived quality and brand
associations can enhance customers’ satisfaction with the use experience.
Brand equity
has the potential to add value
for the firm by generating
marginal cash flow in at least half a dozen ways:
Brand
equity
can
enhance
programs
to
attract
new
customers
or
recapture
old
ones.
Brand
equity
can
provide
reasons
to
buy
and
can
affect
use
satisfaction.
Even
when they are
not pivotal to brand choice, they can reassure, reducing the
incentive to try others.
Enhanced brand
loyalty
is especially
important
in buying
time to respond when competitors innovate and obtain product advantages.
Brand equity will usually allow higher margins by permitting both premium
pricing and reduced reliance upon promotions
Brand equity can provide a platform for growth via brand extensions
Brand equity can provide leverage in the distribution channel
Brand
equity
assets
provide
a
competitive
advantage
that
often
presents
a
real
barrier to competitors
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