Brand equity

Brand Equity is the value built-up in a brand. It can be positive or negative. Positive brand equity is created by a history of effective promotion and consistently meeting or exceeding customer expectations. Negative brand equity is usually the result of bad management. The value of a company's brand equity can be calculated by comparing the expected future revenue from the branded product with the expected future revenue from an equivalent non-branded product. This calculation is at best an approximation. Positive brand equity can be a significant barrier to entry for prospective competitors. The greater a company's brand equity, the greater the probability that the company will use a family branding strategy rather than an individual branding strategy. This is because family branding allows them to leverage off the equity accumulated in the core brand. This makes new product introductions less risky and less expensive.

See also : brand management, brand, Product management, equity, marketing

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