Pricing Mini Case: Calculating Brand Equity Brand equity is one of the most important concepts for marketers, yet it remains notoriously difficult to measure. There are many definitions for brand equity, but they all deal with the concept of how much tangible value a brand is capable of generating through the intangible elements communicated about the brand. As a very simple example, If someone was willing to pay $1000 for an Apple laptop, but would be only willing to pay $500 for the exact same unbranded laptop, that would be clear evidence that Apple has large positive brand equity. Segment A Segment B Durability Typical Selling Price of Brand Typical Selling Price of Product in Category Brand Sales % in segment Brand market share in segment Brand Sales % in segment Brand market share in segment

Brand A 0.60 durability 10 typical selling price of brand 6.00 typical selling price of product in category 30% brand sales % in segment 40% brand market share in segment 70% brand sales in segment 20% brand market share in segment

Brand B 0.40 durability 6 typical selling price of brand 6.00 typical selling price of product in category 60% brand sales % in segment 30% brand market sale in segment 40% brand sales % in segment 30% brand market share in segment

According to this calculation of brand equity, which brand has the best brand equity? has the best brand equity, nothing. (Round to two decimal places.)

Durability Typical Typical Selling Selling Price of Price of Product in Brand Category 106.00 6.00 Segment A Brand Sales Brand market % in share in segment segment 30% 40% 60% 30% Segment B Brand Sales Brand % in market share in segment segment 70% 20% 40% 30% Brand A Brand B Brand A do 0.60 0.40 6.00