Introduction to Branding

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What is Branding?

Brand

=

ITISMINE!!

Power of a BRAND!!

Product?? Brand??Product Brand

Made in a factory Made in the consumer mindsCan be copied Cannot be copied

Has to be a tangible (specific for service)

Is never tangible

Normally has a price associated

Has a value associated to it

Singular item Encompassing the entire organisation

Reason for profit Reason for valuation

Some brands & their value (2013)

Sl Brand Sl Brand1 Apple ($98 mn) 6 GE ($46 mn)2 Google ($93 mn) 7 McDonalds ($42 mn)3 Coke ($79 mn) 8 Samsung ($39 mn)4 IBM ($78 mn) 9 Intel ($37 mn)5 Microsoft ($59 mn) 10 Toyota ($35 mn)

Why are they so great??

What’s a brand?

A name, term, sign, symbol, or design, or a combination of these, intended to identify the goods

or services of one seller or group of sellers and to differentiate them from the competition

What’s the meaning of a brand?

• Brands can convey six levels of meaning:– Attributes– Benefits– Values– Culture– Personality– User

What does brand include?

– Name– Logo– Colors– Tagline– Symbol– Consumer experiences??

Brand Pyramid

Brand Prism

Customer-based brand Equity Model

Points-of-parity•necessary•Competitive

Points-of-difference•strong, favorable, and unique brand associations

Finance based/indirect measurement method excess-earnings method – assess the

increase in profit (or cash flow) attributable to the brand

relief-from-royalty method - if the company did not have the use of its brand name, it would need to license that right in exchange for a royalty fee.

Brand Valuation Methods

Brand Valuation approaches

• In determining the value of a brand in an acquisition or merger, firms can choose from three main approaches:– Cost approach: Brand equity is the amount of

money that would be required to reproduce or replace the brand

– Market approach: The present value of the future economic benefits to be derived by the owner of the asset

– Income approach: The discounted future cash flow from the future earnings stream for the brand

Interbrand’s Brand Valuation

• Assumes that brand value is the present worth of the benefits of future ownership

• Follows five valuation steps: – Market segmentation – Financial (role of branding) analysis – Demand (brand strength) analysis – Competitive benchmarking – Brand value calculation

• Brand value calculation : Calculate the brand value as the net present value (NPV) of the forecast brand earnings, discounted by the brand discount rate