For brand management, the brand equity is vital as it establishes and fosters the customer loyalty towards the brand, and directly influences the business growth may it be a well-established or a new business.
There can be two motivations to study brand equity −
● Finance-based motivation − You can estimate the brand value more precisely for accounting purposes, such as to evaluate the brand as an asset for the purpose of reflecting in the balance sheet, or in case of merging or acquiring a business.
● Strategy-based motivation − You can study brand equity to improve productivity of marketing.