Diffreence between brand equity and brand valuation
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Brand value is easier for a company to estimate. The company can determine the fair market value of the brand by asking other companies what price they would pay to purchase the brand.
Brand equity is more difficult to estimate because it relies on customers' beliefs. The company does not know whether a customer makes a purchase because he recognizes the company's brand or whether the customer uses other criteria, such as price and convenience, to make his decision.
A brand may have a positive value on the company's books and still lack brand equity. When the company begins a new branding project, the company pays its employees while they work on the brand, but customers do not know about the brand yet.
A company needs to develop brand equity past a certain point in a customer's mind before it becomes effective.
Brand equity is more difficult to estimate because it relies on customers' beliefs. The company does not know whether a customer makes a purchase because he recognizes the company's brand or whether the customer uses other criteria, such as price and convenience, to make his decision.
A brand may have a positive value on the company's books and still lack brand equity. When the company begins a new branding project, the company pays its employees while they work on the brand, but customers do not know about the brand yet.
A company needs to develop brand equity past a certain point in a customer's mind before it becomes effective.
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