What could happen if a company lacks brand equity?

A company that lacks brand equity may struggle to differentiate its products and create customer loyalty because brand equity reflects the value a brand adds to a product or service. When a brand has strong equity, it is often associated with positive perceptions, trust, and familiarity, which can significantly influence consumer behavior. Without this equity, a company might find it challenging to communicate its unique selling points, making it difficult to stand out in a crowded marketplace.

In this situation, customers may view the products as being similar to competitors, leading to less brand preference and loyalty. They may switch between brands more frequently, often based on price rather than emotional connection or trust in the brand. This can result in a lack of repeat purchases and a diminished ability to command premium pricing, which is something brands with strong equity often achieve.

While the other options address potential issues related to brand equity, they do not directly capture the essence of the challenge of differentiation and loyalty, which is at the core of what brand equity provides to a company’s marketing strategy.