Final answer:
Brand equity can be increased by enhancing customer loyalty, perceived value, and brand awareness, which are all critical for maintaining a competitive edge and reputation in the market. Lower prices from competitors do not aid in building a brand's equity but are challenges to be addressed.
Step-by-step explanation:
The factors that help to increase a brand's equity include customer loyalty, perceived value, and brand awareness. Customer loyalty refers to the likelihood of repeat customers who also recommend the brand to others, which can be crucial for a firm's growth and sustainment.
Perceived value is the customers' evaluation of a product's worth, which can often allow a company with a good reputation to charge higher prices. Brand awareness signifies how familiar consumers are with the brand, which can be reinforced not only through advertising but also via methods such as emphasizing product quality and creating a strong brand reputation.
In some cases, a firm's large advertising budgets may also act as a deterrent to competitors, showcasing the strength and establishment of the brand. However, it's important to note that lower prices from competitors do not help to increase a brand's equity, but rather, they present a challenge that the brand must overcome by strengthening its own equity.