February 22, 2016
Powerful and Valuable Brands
Powerful and Valuable Brands
It is not often that we think about the influence of a brand in relation to a product or service. We know of, have heard about and have probably discussed the “better known” brands or “household brands” out there – brands that people can name and identify for a variety of reasons, such as their incredible presence in our day to day lives. However, we may not always appreciate the various facets that make brands such as Coca-Cola or Google truly powerful and valuable. Coca-Cola’s Executive once said that if Coca-Cola were to lose all of its production-related assets in a disaster, the company would survive. By contrast, if all consumers were to have a sudden lapse of memory and forget everything related to Coca-Cola, the company would go out of business. Rightly so, with Coca-Cola being ranked as the world’s eighth most “powerful brand” according Brand Finance’s 2015 list of the World’s Most Powerful Brands. Brand Finance’s Brand Strength Index covers factors such as marketing investment, brand equity (the goodwill accumulated with customers, staff and other stakeholders) and the impact of those on business performance. All of this was taken into account before they crowned Walt Disney as the 2015 Most Powerful Brand. This is a significant jump for the company, which was ranked 12th most powerful last year. It is argued that Walt Disney’s acquisition of Marvel (which released Avengers) and Lucasfilm (which released Star Wars) has propelled the power of the brand into outer space. It is interesting to note that the “power” of a brand relies partly on brand equity, an intangible asset that depends on the associations made by the consumer. Powerful brands, such as Walt Disney (most powerful) , Lego (2nd most powerful) and Coca-Cola (8th most powerful) have incredible licensing capability and profit greatly on merchandising. All of this relies on consumer association because a powerful brand works as a credible signal of product quality for imperfectly informed buyers and generates price premiums as a form of return to branding investments. Walt Disney may be the world’s most powerful brand at the moment, but Apple is still the world’s most valuable brand, up almost 14% to $145.9 billion. The success of Apple has been attributed to the iPhone 6 and 6s. However, as the value of a brand depends so heavily on intangibles as such people's perceptions of them, some brand values could be shattered overnight. Unsurprisingly, VW’s brand value fell by $12 billion (losing almost 40% in brand value) following the emissions scandal last year. Brand value is an abstract concept, often determined by looking at factors such as strategic brand management, marketing budget allocation, portfolio management, brand extensions, M&A, balance sheet recognition, licensing, transfer pricing and investor relations. This year, the Brand Finance report looked interestingly at the correlation between share price and brand value. The results showed that if one was to invest in “valuable” brands, these investments would have led to a return almost double that of the average for the S&P 500 as a whole! This is important news to bear in mind for clients and trade mark attorneys alike, whose efforts can directly contribute to a company’s performance. Owning a valuable brand comes with perks such as being perceived differently (in a positive sense), enjoying greater loyalty, being less vulnerable to competitive marketing actions, commanding larger margins, receiving greater trade cooperation and support, increased and effective marketing communication, increased yield licensing opportunities and the ability to easily extend the brand to other “non-core” areas. At Stobbs, we can provide strategic advice, assistance with planning and budgeting, brand evaluation, competitor analysis, IP intelligence and advice concerning licensing. We are here to ensure you maximise the potential in your brand.
Fashion /  Food & Drink /  Publishing /  Telecoms /  Brand Valuation /  Sport /  Brand Intelligence /  Arts & Entertainment /  Brand Extension (licensing) /  Brand Structuring /  Toys

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