Brand equity represents the level of brand name change in the minds of consumers, and the value of

owning a brand that is identifiable and well thought out in terms of the organizational perspective that
creates brand equity by creating a positive experience that attracts customers to continue buying from a
competitor.

Firm-based perspective on brand equity

1. A higher market share is achieved

Brand equity has a direct impact on sales volume as consumers are attracted to products that
have a great reputation. Because the percentage of cost of selling the company’s products is
fixed, higher sales volume means greater profit margins and increases the company’s market.

2. Brand loyalty increases

If a company has a strong and trusted brand, loyal customers will buy the product. Customers
will stay with the brand for the rest of their lives with ease and taste because they believe in the
product in terms of quality, style, abilities of a product. Like those loyal to the Samsung brand.
they will buy all branded products, Samsung brand. For example, in terms of smartphones,
televisions, laptops, and so on.

3. Premium prices can be charged

When a company has positive brand equity, high prices can be charged because customers are
willing to pay high prices for their products, even if they can get lower prices. Customers, in fact,
pay a premium price to do business with a company they know and admire. Because a company
that has brand equity does not incur higher costs than its competitors to produce a product and
bring it to market. For example, when Apple releases a new product, customers line up around
the block to buy it even though it is usually higher than similar products from competitors.

4. The brand earns a revenue premium

Revenue premium defines as the difference in revenue, between a branded good and a
corresponding private label.