Question

True or False:

1) Word-of-mouth is ineffective in building the equity of a brand.

2) If a brand has none to very few tangible attributes/features, then significant resources should be spent on building a brand via communication.

3.) A brand has no financial value for a company.

4.) A branded product's tangible components should be enough to support the claim being made by brand communications.

Answer 1

1. False

Reason: Word-of-mouth is very effective in building the equity of a brand, especially for the company in service sector.

2. True

Reason: Brand via communication has high degree of leverage in building a goodwill even for the brand having none to very few tangible attributes.

3. False

Reason: Brand has financial value which is seen in Balance sheet of the company under the head - good will.

4. True.

Reason: if product's tangible component is not enough to support the claim, the branding through communication wouldn't be sustained in long run.