Question

Adam wants to buy a washing machine and is looking for something that is not too expensive. When he goes to make the purchase, he finds there are two options that meet his requirements. One is an IFB Bosch product, while the other is a newly imported South Korean brand. Adam is not very familiar with the latter and does not hesitate in choosing Bosch. This example implies that ________.

A) the imported brand will not survive the competition from Bosch
B) Bosch has a positive customer brand equity
C) the South Korean company has a low advertising budget
D) the imported brand is unreliable
E) the Bosch washing machine has better features than the imported brand

Answer 1

B) Bosch has a positive customer brand equity

Step-by-step explanation:

From the perspective of microeconomic theory, companies that produce similar products seek to differentiate themselves through product differentiation that creates a link between the brand and the customer. These differentiations are diverse and can be punctual, for example, a washing machine that uses less energy compared to the average of other machines on the market, or solid, when the company can make the brand a synonym of quality for the consumer, as is the case with Bosch. Since Adam does not know the imported product, he chooses Bosh precisely because this company has a positive brand equity with him.