Recognized brand names are worth a lot. People are far more inclined to throw their money at a familiar name with familiar packaging than they are at something unknown. Even the "generic" "brand" is a brand, isn't it? A lot of companies have really gone down the tubes, in quality terms, but they've been able to coast on a recognized name for years. Some of them come to their senses and move on; others eventually wear out all that good will and they just lie down and die.

The down side is that once you've got brand equity, you can turn it against yourself by selling crap. I guess you'd call that "negative brand equity" or something, when that "G for Goodness" turns into an equally recognizable "C for Crap".

What's interesting about brand equity is that it's mostly an emotional thing, so it can have strange effects. You can start selling something almost entirely unrelated to your current product line, something with which you clearly have no experience, and people will usually buy it (at first, anyway) because they know who you are.

This is why so many companies are so fanatical about trademark infringement. That name, or that symbol, is money in the bank. They don't want you making money from it that they could be making, and they sure don't want you selling crap and building up ill will directed at them when they're not ready to lie down and die just yet.

This is also why some companies will buy other companies and shut them down completely, retaining only the brand names, which, utterly dissociated from the stuff they used to refer to, are still worth a great deal.

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