The model also assumes six ways that brand assets create value for the firm.
Firstly, brand equity can enhance the efficiency and effectiveness of marketing programs. A promotion, for example, will be more effective if the brand is familiar and if the promotion does not have to influence a skeptical consumer of brand quality.
Secondly, brand awareness, perceived quality and brand associations can all strengthen brand loyalty by increasing customer satisfaction and providing reasons to buy the product. Thirdly, brand equity will usually provide higher margins for products, permitting premium pricing and reducing reliance on promotions. Brand equity can also provide a platform for growth by brand extensions and can provide leverage in the distribution channel as well. Channel members have less uncertainty dealing with a proven brand name that has already achieved recognition and has established strong associations. Finally, a strong brand represents a barrier that prevents customers from switching to a competitor.