Absolutely, it’s a proven thing that the people

Absolutely, it’s a
proven thing that the people are more willing to pay for a famous brand than
for a product with the same specifications produced by a less famous brand. In
the marketing industry, the concept is referred to as Brand Equity.

Basically, Brand Equity
is the values associated to a brand name, based on how consumers understand the
brand. Brand equity is a term used in the marketing industry which describes
the significance of having a well-known brand name, depending on the concept
that the owner of a famous brand name can generate more earnings simply from
brand recognition; that is from products with that brand name than from
products with a less famous brand, as consumers assume that a product with a
well-known name is better than products with less well-known brands.

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Brand equity talks
about to the value of a brand name. Brand equity has been analyzed from two
different points of views: cognitive psychology and information economics.
According to cognitive psychology, consumers generally observe familiar brands
as more reliable and deserve more attention. Additionally, they may relate the
brand with quality attributes not necessarily centered on any detailed
knowledge of the actual products. According to information economics, a strong brand
name could be a trustworthy indicator of product quality for improperly aware buyers
and produces price premiums as a form of return to branding investments. These
benefits incorporate to help consumers rationalize higher spending on more famous
brands than a less famous brand.

For example, most
consumers will assume that the Apple Watch is more high-class, much easier to use
and more reliable than its rivals even though they have never used these kinds
of watches. It’s actually because they already correlate Apple with such
attributes.

It has been empirically
proven that brand value plays a vital role in the determination of price
structure. Positive brand equity can bring many benefits to the company, among
which is charging higher prices from the consumers. In other words: if a
consumer is brand conscious, he/she will be willing to pay more for the products
or services.

Several marketing
researchers have come to the conclusion that brands are one of the most
valuable assets a company has, one of the most important factor to boost the
financial values of brand to the owner is brand equity, although not the only
one. Essentials that can be included in the valuation of brand equity include
(but not limited to): changing market share, profit margins, consumer
recognition of logos and other visual elements, brand language associations
made by consumers, consumers’ perceptions of quality and other relevant brand
values.

Another research has
proved that the people linked with a familiar brand refrain to move a new one.
According to new research, sixty percent|60 %} of global consumers who have
access to the internet prefer to buy new products from a known brand rather than
switch to a new brand.

Listed below are the
seven reasons why consumers prefer a known brand rather than a less-known
brand.

1. Brands provide peace
of mind.

By getting branded
products, consumers want comfort, happiness, and satisfaction in their lives. The
consumers form a trustworthy opinion about brand by consistently using if the
brand delivers a positive experience, which gives them a pease of mind when
buying.

2. Brands save
decision-making time.

If someone wants to
purchase a product of brand, it makes easy for a consumer to make decision. For
an example, if someone wants to purchase an “HDTV” Samsung will be the right
decision for the consumer.

3. Brands create
difference.

Any grocery store aisle
has more product options than anyone can reasonably consider purchasing. What
allows us to choose one peanut butter brand over another or over a generic
product? Branding helps define-in an immediate}, with a minimum of thought-what
makes your product different and even more desirable than equivalent products.

4. Brands provide
safety.

Generally, people avoid
risk and seek safety. Imagine one is on a business trip in a new place, and
need to pick a restaurant for dinner. He is most likely to choose a nationwide restaurant
brand over a local one because he is aware of the national brand. It’s the safe
and sure option because this individual knows what to anticipate. Brands offer
safety and minimize the risk of dissatisfaction.

5. Brands add value.

Consumers pay higher
prices for the brands compared to unbranded or generic products because of
quality which leads the companies to charge premium prices by making more money
for the branded products.

6. Brands give
consumers a reason to share.

Generally, people share
their experiences about things whether good or bad. We become brand advocates
when we share positive experience of brands. Strong brands give consumers a
reason to share their experiences.