Benefits of Brand Equity

The ZEN versus iPod saga illustrates the power and complexion of brand equity. In consumer marketing, the softer aspects pertaining to the brand’s affinity with consumers, are often the most potent.

By the time ZEN was launched, iPod had garnered enormous brand equity on a global scale, the benefits of which gave the brand formidable competitive advantage. Some of these benefits are listed below:

• A brand possessing high equity nurtures strong loyalty.
• It can command a price premium.
• Trade cooperation improves as retail partners are more receptive to it.
• Consumers are receptive to the extensions of the brand.
• There is greater interest in acquiring license for a brand with high equity.
• Brand communications become more effective. The brand finds it easier to register messages in the minds of their target consumers.

These benefits reduce friction as products flow from factories to retailers and from retailers to consumers. They raise profitability.

At a time when the stakeholders are demanding greater accountability of marketing, the pursuit and measurement of brand equity has gained significance. No other asset compares with a high equity brand, in its potential to generate future cash flow and sustain long term profitability.