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Brand equity

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Brand[4] equity refers to the value derived from consumers’ perceptions, experiences, and associations with a brand. This concept is a key component in the marketing and business strategies of a company. It is primarily studied in consumer[3] markets, but understanding it is also essential for competitive dynamics in business-to-business[1] markets. Brand equity is driven by factors like brand awareness[2], perspective, and attachment. It is measured using specific metrics that assess the brand’s value and the level of consumer trust. Tools like Aaker’s Brand Equity Ten attributes and Moran’s Brand Equity Index are used for this purpose. Positive brand equity can lead to consumers’ willingness to pay a premium, while negative events like scandals can harm it. Managing brand equity involves setting and tracking goals, maintaining brand consistency, and making strategic shifts when necessary.

Terms definitions
1. Business-to-business ( business-to-business ) Business-to-business, commonly known as B2B, is a term that describes the exchange of products, services, or information between businesses, as opposed to between businesses and consumers (B2C). It typically involves large-scale transactions as it forms a crucial part of the supply chain for most industries. B2B transactions often require significant upfront investments, professional staff, and legal counsel. They also have their own unique negotiating power dynamics and are usually based on raw data. B2B can extend to include e-commerce for consumers, known as B2B2C. B2B operations face various challenges, so it's essential for organizations to develop effective strategies and relationships. The emergence of e-procurement, where businesses make purchases via online platforms, has significantly transformed B2B operations.
2. brand awareness. Brand awareness is a fundamental concept in marketing that refers to the level of familiarity consumers have with a particular brand. It plays a significant role in their purchasing decisions, affecting the sustainability and growth of a business. Brand awareness is divided into two types: brand recall, the ability of consumers to remember a brand from memory when prompted with a product category, and brand recognition, where consumers confirm their previous exposure to a brand. It is typically measured using surveys, recall tests, and other metrics such as brand association and salience. Advertising is a crucial tool in building brand awareness and converting consumer interest into sales. Notably, strong brand awareness can enhance brand equity, which is the cumulative value derived from a brand's name and logo, including factors like brand loyalty and perceived quality.
Brand equity (Wikipedia)

Brand equity, in marketing, is the worth of a brand in and of itself – i.e., the social value of a well-known brand name. The owner of a well-known brand name can generate more revenue simply from brand recognition, as consumers perceive the products of well-known brands as better than those of lesser-known brands.

In the research literature, brand equity has been studied from two different perspectives: cognitive psychology and information economics. According to cognitive psychology, brand equity lies in consumer's awareness of brand features and associations, which drive attribute perceptions. According to information economics, a strong brand name works as a credible signal of product quality for imperfectly informed buyers and generates price premiums as a form of return to branding investments. It has been empirically demonstrated that brand equity plays an important role in the determination of price structure and, in particular, firms are able to charge price premiums that derive from brand equity after controlling for observed product differentiation.

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