Brand Equity is important when a company wants to expand its product line. It is the perceived value of a known name, logo or other identifier. It refers to a value premium that a company generates from a product with a recognizable name, when compared to a generic equivalent. 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.
Brand Equity
