Starbucks is not the best coffee in the country, but a cup of their coffee or two can make a person happy. Toyota is not making everyone’s dream car, but it is known to be safe and reliable. Apple iPhones are not the most advanced phones in the market. However, people clamor for its new releases. Carrying an iPhone became a status symbol. These situations highlight the power of branding.
WHAT IS A BRAND?
A brand is more than just a name! It is a culmination of a consumer’s experiences with a recognizable product. Branding makes your products stand out from the rest. With the right strategies, a brand is powerful and can often lead to competitive advantage. You see, a brand develops loyalty among consumers. People are more willing to pay more for their preferred brands.
WHAT IS A LOGO?
A logo is the pictorial persona attached to the brand. It is one of the key elements that help build a trustworthy relationship between the product/service and the target audience themselves. A good logo is memorable, functional, and meaningful. Your logo must reflect the concept of your products or services. Moreover, the logo must include both the visual and conceptual values of the brand.
If a logo is not memorable, the consumers can dissociate it with the brand. For instance, we all know that a big checkmark is associated with Nike and its slogan: “just do it”. Design and branding consultants can help you develop an efficient way to communicate your brand to your target audience. This includes logo design.
HOW CAN INVESTORS PUT VALUE ON A BRAND?
Although brands are valuable to companies, brands are still considered among the intangible assets. Investors can put value on a brand by using these three main approaches.
#1: CALCULATE THE BRAND EQUITY OF A COMPANY
One of the simplest ways to put a value on a brand is to calculate the brand equity of a company. Take a firm’s enterprise value and subtract the tangible assets and intangible assets that can be identified (e.g., patents).
#2: FOCUS ON THE PRICING POWER OF A COMPANY
The next approach focuses on the pricing power of the company. Investors want to know how much of a premium the company can charge above its competitor’s product. To give the annual figure for how much the brand is worth, this premium can be multiplied by the units sold.
#3: COMBINE DIFFERENT APPROACHES
Perhaps the most time-consuming approach is to combine the above approaches with the proprietary measures of brand strength, the role of the brand in consumer decisions, and more. This comprehensive approach may not be practical to individual investors.
HOW ARE BRANDS SHIFTING NOW?
Creating a significant connection with people is essential for all organizations and a brand can embody attributes which consumers will feel drawn to. In the last several years, brands have become more visible through social media and other digital platforms. The consumer’s voice is louder and much more public now. There are even websites dedicated to championing the views of the consumers (e.g., TripAdvisor and Yelp).
Consumers can easily publish their experiences about a certain brand with a few taps on their mobile phones. This amount of convenience can either tarnish or help your brand. Fortunately for you, you have the ability to respond to feedbacks and reviews. Responding to these can have a profound effect on how your brand is perceived. Take some time to think about your responses.