Brand Value


What is Brand Value?

Brand value is the value that a product has acquired over time. It might be valued positively or negatively.

This process occurs through the associations that users have made and the expectations they have about the company, its products and services. This experience is an intangible element since it can't be measured.

The value of the brand will be positive or negative depending on the perception that users have of the products associated with it. The type of perception has been built on the branding of the brand.

When effective advertising is used throughout the history of the brand, it's possible to obtain a positive opinion about this and its services. The product will have managed to meet the needs and expectations projected by the brand.

When the management of the brand has been wrong, this results in a negative perception on the part of the customers and will have a negative impact on the interest of the consumers for the product.

Steps to calculate brand value

Millward Brown, one of the world's leading brand and advertising research companies, highlights three steps to calculate the value of a brand:

- The earnings. There is a first step in which the percentage of the total revenue generated by each brand company is identified; For example, in the case of Coca-Cola, some income comes from sub brands such as Fanta. From these brand gains, capital and investment expenses are subtracted to obtain the real value of the company.
- Contribution. Only a part of these gains can be considered as driven by the brand. This is the "Brand Contribution", and is established through the market analysis of the country and also the brand.
- Multiple brand The growth potential of these brands is studied, based on their income. An analysis and study of its growth opportunities and brand barriers is established, making financial projections based on consumption data.

Brand Value Objectives

The purpose is to measure the profitability of a brand. A brand includes the name, logo, image and perception that identify a product or service in the minds of customers.

All this takes shape in advertising to become the focus of the relationship with consumers.

When users rely on a brand they find relevant, they choose their products over those offered by their competitors, even if they are more expensive.

Brand value is managed more effectively through the development of goals to value the brand, and which serve to monitor its progress and performance.

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