You are on page 1of 16

Introduction to Branding

K
What is Branding?
Brand

=

IT
IS
MINE!!
Power of a BRAND!!
Product?? Brand??
Product Brand
Made in a factory Made in the consumer minds
Can 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 Brand
1 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??
Whats 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
Whats 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
Interbrands 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