What is brand equity? Which components of a brand create competitive advantage?
The incremental utility or value added to a product by its brand name. It is estimated by subtracting the utility of physical attributes of the product from the total utility of a brand. Brand equity thus increases cash flow to the business. This idea is based on that the brand of a firm is a valuable asset that is taken into account in a firm's balance sheet.
It is composed of brand awareness, brand loyalty, perceived quality, and the brand's associations.