Coattail Effect Vs. Brand Equity: What's The Difference?

Brand equity is the differential effect that knowing the brand name has on customer response to the product and its marketing. Discuss the four choices a company has when developing brands and the advantages. Why its important to understand and measure brand equity in your brand tracking study in order to accelerate brand growth.

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The answer is two words: Developing your brand's equity could help you increase your margins by increasing its perceived value in the eyes of your customers. Whats the difference between positive and negative brand equity? If your brand has positive equity, your customers are likely willing to pay more for your product.

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Positive brand equity examples from creating brand value include: Nike has an enduring association with peak athletic performance, dedication, and inspiration. In franchising, the coattail effect refers to a situation where franchisees who are prosperous and doing well may be forced to shut down due to the failures of franchisees who own a franchise of the same brand. The coattail effect is a phenomenon where a franchise owner benefits from the reputation, success, and goodwill of another company or brand.

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