Why People Go For The Brand

Some time people wonder why they go for the brand. But the simple fact is that branded stuff is purchased because the buyers become familiar with them and like them, in fact they become like friends. As a consequence there is a psychological link between a brand and its buyer, although this is generally seen as something cloudy and subjective for example a researcher might ask, 'If this brand came to life than what sort of person would it be.' It is also possible go further and quantify various aspects and quantify various aspects of a brand and ultimately to estimate when a brand

owner to sell to some other company.

What is a brand really worth? In companies where budgets are tight, how do you go about explaining the importance and the equity that brand can carry?



A brand can be considered intangible, and it’s difficult for people to understand the value that it brings to a company. It’s important when sitting down to create a brand valuation to determine what your brand includes.



It could include the trademark, logo, packaging, marketing strategy, digital assets, brand colors, etc. It’s really anything that consumers associate with your brand image.Stron brands  carry a great deal of value, as can be seen by the world’s five most valuable brands recognized by Forbes, as of 2018:


Apple: $182.8 billion
Google: $132.1 billion
Microsoft: $104.9 billion
Facebook: $94.8 billion
Amazon: $70.9 billion

Brand Development and ValuationBrand Development requires money, time and patience, and is essential to be able to forecast the value of the brand to executive leadership and investors. Brands help identify and differentiate goods and services from the competition. But how can the value be shown on a balance sheet? 

There are various ways to approach the valuation of a brand, and many of them are debatable. The concept of value often can be a difficult concept to understand. This is because value means different things to different people, so it’s not an objective concept. Valuation is determined by the use of the brand. Popular valuation methods and approaches include:

Cost-Based Brand Valuation
The brand is valued using the sum of individual costs or values of brand assets and liabilities. It’s the accumulation of the costs that have been incurred to build the brand since inception. Items you would include when evaluating costs include historical  advertising, promotion expenditures, the cost of campaign creation, licensing and registration costs. You could use this method whether you have just created a brand or you’ve gone through the process of re-developing the brand.

Cost-based valuation method requires to evaluate the cost of the brand and restating actual expenditures in current cost terms. The same method could be used if you had just worked to re-develop and launch your brand. One thing to keep in mind, while costs can be collected and used, the figure doesn’t necessarily represent the current value of a brand.

Market-Based Brand Valuation

This method uses one or more valuation methods by comparing similar brands which have been sold. We should  use comparable market transactions like the specific sale of a brand, comparable company transactions, and/or stock market quotations. Market-based brand valuation is what a brand can be sold for. The brand value using this method is equal to a market transaction price, bid, or offer for identical or reasonably similar brands. In real estate terms, it's like researching the sales prices of similar homes in the same neighborhood before putting a price on your own home.

Income-Approach Brand Valuation

This method is often referred to as the “in-use” approach. It considers the valuation of future net earnings that can be attributed directly to the brand to determine the value of the brand in its current use. The brand value using this method is equal to the present value of income, cash flows, or cost savings actually or hypothetically due to the asset.

Brand equity is one of the few assets in business that can provide a sustainable competitive advantage. There are many methods that can be used, which means it’s not difficult to manipulate the results of measuring one’s brand equity.

Ways to Go Beyond Measuring and Actually Build Brand Equity

Brand equity is built through every "touch" or interaction with the customer. Your advertising at the national and local level supports your brand equity, but so do your local marketers' face-to-face interactions with customers on a daily basis. By understanding that every outbound communication and in-store experience is an opportunity to add to a positive brand impression, brand managers can take control and not just measure brand equity but actually build it in the process.

1. Build Your National Brand

Distributed brand managers don't have direct control over local marketing execution, though they do have control over national-level campaigns. Using traditional, proven methodologies for building your brand on a national scale can increase your value to consumers and local affiliates. Strategic tools for expanding your value include:

1. Improving your brand positioning
2. Telling your brand story
3. Improving your tools for international brand consistency 
4. Using consumer and local marketer feedback to improve messaging

2. Create Brand Equity by Improving Local Marketing Performance

Brand equity at the local level is influenced by the quality of the customer experiences and consistency. If your customers see a product in your national advertisements, go to buy it, and have a great experience, you're on the way to building lasting brand equity. Just as easily as you build equity through good execution, poor local execution will undermine all those gains.

Delivering consistently great experiences at local storefronts requires brand management teams to define expectations clearly and establish processes, often by using technology, that make it easier for two-way communications between local marketers and brand management teams to occur.

In order to prevent abuse of this, it’s important to identify the objective of the valuation and use the appropriate method and assumptions to determine a fair value. It’s fair to say that brand valuation can be more of an art than a science, but it can help in identifying and developing the value proposition behind your brand.

Keep in mind , very large brands have a boosted purchase frequency : a phenomenon called penetration super charge. Buyers of bigger brands are more loyal than the the buyers of smaller brands. But there are few brands who have loyal buyers that they buy no other. The higher than average purchase frequency of large brands gives such brands an internal momentum, a tendency for buyers to disregard competition. This is the power of brand having healthy effect on company's profit.