Marketing professionals use jargons like brand value, brand equity etc. in their day-to-day conversations. Very few know what these terms mean and how the value of a brand is determined. In this article, Anil Gupta talks about calculating brand value, its benefits, common methods to calculate the value of a brand and introduces some of the agencies engagedin this.
The
marketing battle will be a battle of brands, a competition
for brand dominance. Businesses and investors will
recognize brands as company's most valuable assets.
This is a critical concept. It is a vision about how
to develop, strengthen, defend and manage a business.
It will be more important to own markets than to own
factories. The only way to own markets is to own market
dominant brands. -
David Aaker (1991)
Coca-Cola ever
thought what one will have to pay to buy this brand?
A recent study by Interbrand, a JP Morgan Stanley
group company, values this brand at US$ 70.45 bn which
is approximately Rs. 3,25,000 cr. This amount is almost
equal to 18% of India's GDP. the million-dollar question
that arises here is that can we really value an intangible
asset like a brand? If yes, then how? Before we analyze
this, we need to know the rationale behind valuing
brands. Why do companies value brands?
A
brand is a distinguishing name and / or symbol (such
as logo, trademark of package design) intended to
identify the goods or services of either one seller
or a group of sellers, and differentiate those goods
or services from its competitors.In
the last two decades of 20th century, branding
became a critical success factor for most organizations,
from commercial companies to professional firms, from
charities to even political parties. Organizations
of all typesbe it service companies, technology companies,
healthcare providers, countries and governments are
enthusiastically embracing branding. When competition
has led to commoditization of products, firms increasingly
are looking forward to create differentiation in the
minds of the consumers.
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