Professional Documents
Culture Documents
brand value
patrick collings
sagacite
Coca-Cola
2009 Rank: 1 (1 in 2008)
2009 Brand Value: $68,734m (3%)
100 Best Global Brands
IBM
2009 Rank: 2 (2 in 2008)
2009 Brand Value: $60,211m (2%)
100 Best Global Brands
Microsoft
2009 Rank: 3 (3 in 2008)
2009 Brand Value: $56,647m (-4%)
100 Best Global Brands
GE
2009 Rank: 4 (4 in 2008)
2009 Brand Value: $47,777m (-10%)
100 Best Global Brands
Nokia
2009 Rank: 5 (5 in 2009)
2009 Brand Value: $34,864m (-3%)
33%
average contribution to value of a company
15%
average contribution to value of a company
in an emerging market
the rise of brand valuation
the valuation of brands
started to emerge in the
1980s
TBWA
WPP Omnicom
“When given a monetary value, a
brand increases its power as a business
driver and planning tool”
Joanna Seddon
CEO Millward Brown Optimor
Collecting the data
Data for the evaluation is first drawn from the
researched opinion of thousands of brands in
17 categories by knowledgeable consumers
and B2B customers across 31 countries
The brand’s advantages are unique:
Bonding
“it’s my brand”
branded
earnings
branded
intangible
earnings
branded earnings
branded intangible earnings X brand contribution
Differentiation
Differentiation
Relevance
Relevance
D>R D<R
The most healthy brands More relevance than
have greater differentiation differentiation equals potential
than relevance. “Room to commoditization. “Uniqueness
grow, brand has power to has faded, price becomes the
build relevance”. dominant reason to buy”.
Esteem
Esteem reflects popularity and quality.
Esteem relates to how well a brand
fulfills its implied or stated consumer
promise. It requires differentiation and
relevance to have preceded it, but it
can outlive both of them
Knowledge
Knowledge captures intimacy and
understanding, it is the end result of all
the marketing and communications
efforts and experiences consumers
have had with a brand. Consumers
understand and remember those
brands that demonstrate high
knowledge.
Esteem + Knowledge = Brand Stature
Knowledge
Knowledge
Esteem
Esteem
E>K E<K
More esteem than
Too much knowledge can be
knowledge means “I’d like
dangerous. “I know you and
to get to know you better”.
you’re nothing special”. The
The brand is better liked
brand is better known than liked.
than known.
high
low high
Brand Stature
(Esteem & Knowledge)
low high
Brand Stature
(Esteem & Knowledge)
high
06
03
00
low high
Brand Stature
(Esteem & Knowledge)
eBay
high 03 06
low high
Brand Stature
(Esteem & Knowledge)
Google
give it a try at
http://www.thebrandbubble.com/explore/
Best known of the brand valuation
methodologies. Created to find an
approach that incorporated marketing,
financial and legal aspects
Interbrand starts by assigning
sales to individual brands &
projecting five years ahead
intangibles
Future earnings are discounted to arrive
at net present value
Discounts calculated with current
interest rates and the brand’s overall risk
profile
Criteria Weighting Notes
brands in growing or established markets where
market 10% consumer preferences are more enduring would score
higher
economic profit
(economic profit is the amount of after-tax profit a
company earns that exceeds the cost of capital the
company has used in operating the business)
uses the delphi
forecasting technique
to calculate economic profit owing to brand
called the resource recognition procedure
The resource recognition procedure
starts with experts representing major
functions sitting with a facilitator to
identify drivers of economic profit
1 supply chain management 10 marketing support
9 pricing 18 leadership
Through an iterative process reduce list to 5
to 8 items and weight their importance. a
score of between 0 and 10 to assigned to
each item to indicate the influence of the
brand
1 supply chain management 10 marketing support
9 pricing 18 leadership
the scores are summed to produce
brand premium profit
which is the portion of economic
profit attributable to the brand
media titles 80 - 90 %
fmcg 65 - 75%
retail 63 - 67%
insurance 50 - 55%
b2b 45 - 60%
energy 45 - 50%
Expected life
in years
0
brand knowledge structure analysis
Market research determines awareness and
associations, reduced to score out of 100
40
Expected life
in years
0
100
If brand value is increasing, brands should be Brands are less liked and respected. Esteem and
more liked and admired regards for brands fell by 12% in 12 years.
If brand value is increasing, brands should be Brands are less salient than ever. Awareness of
better known brands fell by 20% in 13 years.
e: patrick@sagacite.co.za
m: +27 (0)83 616 0967
w: www.sagacite.co.za
b: www.collings.co.za
t: pjcollings (follow me on twitter)