Why is brand equity so important?
Attorney Michael Lasky discusses the importance of brand equity.
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Phone: (404) 441-1750 or (952) 253-4106
The purpose of brand equity is really to accomplish two things. One is to be able to get greater margins on your products. Take an example, a Prada shoe and a Payless shoe – enormous price differential; let’s say $1,000.00 versus $100.00. Yet the product is made with about the same amount of labor and with about the same amount of materials. You could argue that one uses better materials or not, but not enough to justify ten times the value. So where is this ten times coming from? This is the brand equity. People are buying the product because they want to associate with the meaning of the brand.
The second reason why brand equity is important is it leads the way from one product or one sale to the next. When you come from a firm like Accenture and you walk into a client’s room, they immediately have all kinds of feelings about Accenture – presumably good – and you walk in with the backing of the brand and years of their development already done. So brand equity gives you the momentum to build from the last sale you had and you get paid more too.