What Is the Value of Your Brand? - Issue: 2002 Qtr 4
Every year, Business Week magazine publishes a ranking of the most valuable global brands conducted by Interbrand, a unit of Omnicom, Inc.
The winners are the big names we all know and expect to top the list: Coca–Cola, Microsoft, IBM, GE, Nokia and McDonald’s to name a few (see side bar for listing of the top 10 for 2002).
What’s interesting to note is that this isn’t a “popularity” contest to see which brand people love the most or has the highest awareness. It ranks the VALUE of the brand to the respective companies.
In fact, the Financial Standards Accounting Board has issued rules for how companies record assets in a merger, and they will no longer have to amortize brand value as “goodwill.” That’s great news for large companies with well–known international brands, who understand that these brands are valuable assets.
But what about marketers and brand managers at other companies where the value of the brand is not just a balance sheet issue, but a sales and marketing one? How do we measure brand value?
If we believe that brands have the power to increase sales, then perhaps we can submit the brands under our care to a simple litmus test. Measure your brand against these three questions:
1. Are your customers willing to go out of their way to buy your brand? Will they inconvenience themselves or disrupt an activity to buy your brand? (Example: will they wait an extra month to have your product installed vs. shopping a competitor who can deliver next week?)
2. Are they willing to pay more for your brand? (Example: if they are conducting an apples–to–apples comparison with a competitive product, will they pay more for yours?)
3. Is it a “flip of the coin” and low price wins?
Of course there are easy ways to measure how your brand does in this test. And the closer you are to the marketplace, the better your intuitive ranking will be. But even if you never actually test to see how your brand measures up, it’s important to keep this simple test in mind, because it forces you to see your brand from your customers’ perspective.
Let’s face it, any person would be crazy to spend more money for something that is absolutely no different than a competing product selling for less. If there is no compelling difference, then buyers should make the best decision, which is based on price.
Our job as brand managers and marketers is twofold: first, to build the value into our products and our brands and second, to make sure that our brand speaks for itself and it clearly differentiates its value. Be the brand.
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