Brand equity

Brand Equity is the value built-up in a brand. It can be positive or
negative. Positive brand equity is created by a history of effective
promotion and consistently meeting or exceeding customer expectations.
Negative brand equity is usually the result of bad management. The value of
a company's brand equity can be calculated by comparing the expected future
revenue from the branded product with the expected future revenue from an
equivalent non-branded product. This calculation is at best an
approximation. Positive brand equity can be a significant barrier to entry
for prospective competitors. The greater a company's brand equity, the
greater the probability that the company will use a family branding strategy
rather than an individual branding strategy. This is because family branding
allows them to leverage off the equity accumulated in the core brand. This
makes new product introductions less risky and less expensive.

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