Brand Value

From MBA Think Tank Encyclopedia (/)

Brand Value

Table of Contents

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1 Overview of brand value

2 Strategies to enhance brand value

3 Brand value innovation

3.1 What is a brand Value Innovation

3.2 Brand Value Innovation Strategy

4 Relationship between Brand Culture and Brand Value

5 Brand Value Assessment

5.1 Brand Value The role of evaluation

5.2 Classification of brand value evaluation

5.3 Brand value evaluation procedure

5.4 The most valuable brand evaluation method

[ Editor] Overview of Brand Value

Brand value is the most core part of brand management elements, and it is also an important symbol that distinguishes a brand from similar competing brands. Michael Porter once mentioned in his Brand Competitive Advantage: The equity of a brand is mainly reflected in the core value of the brand, or the core value of the brand is also the essence of the brand.

The diversification of value theories gives brand value different connotations. According to the labor value theory: Brand value is a series of joint actions taken by brand customers, channel members and parent companies, which can enable the brand product to obtain greater sales and more benefits than without a brand name. It can also make The brand gains a stronger, more stable, and more special advantage in the competition (Kevin Keller. 2003). This definition emphasizes the components and causes of brand value; and according to the neoclassical value theory: brand value is whether people continue to buy a certain brand, which can be measured by indicators such as customer loyalty and market segments. This definition It focuses on evaluating brand value through customers' utility feelings. It can be seen from this that the reason why a brand is valuable as an intangible asset lies not only in the sunk costs involved in the formation and development of the brand, but also in whether it can bring value to relevant entities, that is, whether it can create principal interest for it. Whether the higher premium and stable future income can satisfy a series of emotional and functional utilities of users. Therefore, brand value is a systematic concept formed by the interaction between enterprises and consumers. It is reflected in the comprehensive value such as material culture obtained by enterprises through the exclusive ownership and monopoly of the brand, as well as the functional and emotional value obtained by consumers through the purchase and use of the brand.

[Editor] Strategies to enhance brand value

1. "Creating" is not as good as "buying"

According to an analysis report by an international authoritative organization, creating a famous brand , media investment alone will require at least US$200 million. If a company tries to enter a new market or the market of another country, it will undoubtedly invest more financial resources and energy in brand development, and will also encounter various forces in the original market.

At this time, using the power of capital to expand brands and enhance brand value has become the preferred strategy for some companies. One of the most successful examples is "Unilever".

Almost all of Unilever’s 12 brands in my country are leaders in similar products. Lux and Sunsilk are at the forefront of shampoo and shower products; Chung Hwa Toothpaste is a time-honored brand in the toothpaste market; Lipton black tea has a market share of over 80%; and Heluxue's position in the ice cream market is unrivaled.

Most of Unilever’s more than 400 brands around the world are acquired and promoted to all parts of the world. Unilever's success in transnational brand operations lies in its ability to acquire local brands and upgrade them into international brands.

Pond's was originally an American brand, but Unilever bought it and developed it into a famous skin care brand, which was promoted to China; "Sunsilk" was originally a British brand promoted in Southeast Asia, and Unilever also Introduce it to China. The acquisition of "Zhonghua", China's number one toothpaste brand, is a continuation of its consistent brand strategy.

This brand strategy of Unilever has not only enabled it to reap huge returns globally, but also enabled it to establish a stronger emotional connection between local brands and consumers.

As Zeng Xiwen, development liaison director of Unilever (China) Co., Ltd., said, "The purpose of Unilever's acquisition of local brands is not to weaken its impact on its own brands, put them on hold or even eliminate them, but to elevate them to the level of the United Nations." Lever's overall strategy of global brand operation will become an international brand."

2. "Strong" alliance strategy

Brand value can also be improved through cooperation with other brands. Join forces to quickly expand your brand image and create more added value.

For well-known international large companies, they are often very good at leveraging their strong brand appeal and market advantages in their respective industries to form "strong" brand alliances with leaders in other industries, in order to achieve greater success. Expand to greater market depth and breadth to strengthen your brand image. And since this kind of collaboration is often based on the brand success of two or more partners, it is easier to get positive feedback from partners and the market.

As a well-known brand in the "coffee fast food industry", Starbucks has joined hands with United Airlines to expand new business areas and enable its products to cover a wider market space; on the other hand, it is precisely because This advantageous cooperation has truly enhanced their brand value in their respective fields. Facts have proved that many former loyal customers have now become customers of United Airlines precisely because of United Airlines’ new initiatives, and now many Starbucks “supporters” also met on United Airlines and began to “love” this brand. Coffee Star". Another classic case comes from Intel. The "WINTEL" empire that he and Microsoft jointly built has brought them staggering market value, huge profits, and the establishment of the most powerful first-class brand.

Joining forces between large companies can help them quickly establish brand value in new markets. Similarly, small and medium-sized enterprises can also use this method to form alliances with companies with strong brand awareness and rely on Others' advantages enhance one's own brand value, and the most critical thing is to find the right point of cooperation and give full play to one's own comparative advantages. In the early years, Lenovo and Sitong relied on their comparative advantages to cooperate with internationally renowned large companies and stood on the shoulders of giants to grow and establish their current brands.

3. Brand extension strategy

Many of the brand strategies of Chinese companies draw on specific practices from Asian companies such as Japan. The most obvious similarity is that Chinese companies, like Japanese companies, mostly adopt a unified brand strategy, covering all the company's products with one brand, but rarely use a brand extension strategy.

Brand extension strategy includes sub-brand strategy and multi-brand strategy. The sub-brand strategy is a brand strategy between one brand for multiple products and one brand for one product. It uses consumers' trust and loyalty to existing successful brands to promote sales of sub-brand products.

From Haier’s practice, the sub-brand strategy has indeed effectively supplemented the unified brand strategy. It calls the 0.5kg small washing machine "Instant Wash", the TV "Pathfinder", and the beauty humidifier "Little Monroe", which consumers can understand at a glance. For the same product, sub-brands can also be used to distinguish specifications, tastes, grades, functions, etc. For example, Haier refrigerators use "Little Prince", "Handsome Prince", "Little Prince", etc. This also avoids thinking stereotypes like "Haier is a refrigerator," "Changhong is a color TV," and "Little Swan is a washing machine." Choosing a sub-brand strategy can effectively guide consumers to break through their original consumption patterns, accept and recognize new products, and quickly transfer their trust and loyalty to the main brand to new products.

When it comes to multi-brand strategy, it is difficult to miss the name "Procter & Gamble". Regarding brands, P&G's principle is: if there is still room for a certain category in the market, it is best if those other brands are also P&G products. For example, in the U.S. market, P&G has 8 laundry detergent brands, 6 soap brands, 4 shampoo brands, and 3 toothpaste brands. Each brand has different appeals, and P&G also uses the brand to The differences in functions and personalities win over users with different needs and life tastes, and each brand has its own space for development without market overlap, giving it a very high market share in various industries.

The reason why P&G can promote its multi-brand strategy so smoothly is that, in addition to accurate market positioning and grasp of demand differences, the most important thing is to always seek and strengthen the ability to "string" various brands. The golden thread together is a brand core spirit that transcends various products, and a consistent consumption experience that is brought to users. Just as its advertising slogan "World-class products beautify your life" conveys, "P&G" has become a symbol of the pursuit of high-quality life.

4. Intensive channel penetration

To expand and enhance a brand, you must first let your targets and potential users see your brand frequently, because the brand value ultimately comes down to the users. In terms of purchasing behavior, in order for users to complete the purchasing behavior, they must first reduce the cost of implementing this behavior, which includes psychological costs and behavioral costs. In other words, it is easier for users to think of you, become familiar with you, and buy your products less often. Some distrust and worry, and it's easier to buy you later when I think of you. To achieve this effect, strong channel support is needed, especially to "densify" sales terminals and increase penetration into the regional market.

The Coca-Cola Company is the best example. It has sales channels all over the world and has developed regional distributors around the world. It is not only sold in vending machines, nozzle drinking fountains, supermarkets, and convenience stores. , and its "cool" nature is even more evident in movie theaters, video stores, and even taxis.

Nike has also opened up some new sales channels, including a large-scale specialty self-selected shopping mall with significant effects - "Nike City", which has effectively strengthened the company's brand image. Nike has also aggressively attacked the global market. Since 1994, its brand has extended to more than 100 countries in the Asia-Pacific region, Europe, Latin America and North America.

Similarly, for relatively weak enterprises, if effective channel penetration is adopted, good results can be achieved. "Very Coke" has a relatively low awareness rate in rural areas through "Coca-Cola" situation, quickly laid out channels, and effectively controlled this market segment at a lower price.

5. Taking a "Hitchhike"

To take a "Hitchhike" is to be good at taking advantage of the situation to enhance the brand, and let others do the early development and the most difficult things, and Rely on your own personal advantages to pick up the achievements of others. The "ride-sharing" strategy is more suitable for the fast, flexible and elastic characteristics of small and medium-sized enterprises. It can quickly enter new opportunities without having to worry too much about whether its entry into new markets will follow its past style or whether it will have a negative impact on its other products.

To a certain extent, "Very Coke" has taken a ride on "Coca-Cola", relying on the huge "Coke" consumer group and market base that "Coca-Cola" has developed, coupled with the "national "The appeal and targeted channel penetration enabled it to quickly establish its own brand. And from another perspective, as long as the market share and survival space of "Very Coca-Cola" are controlled within a certain limit, "Coca-Cola" will not suppress it with all its strength, because with the market share and market capacity of "Coca-Cola", in the country The capital cost loss of internal suppression of "Very Coke" is far greater than the loss of lost market share. Moreover, letting a relatively standardized enterprise like "Wahaha" control this part of the market share is also conducive to the formation of the "Coke" market order and market stability. .

6. Challenging industry leaders

Challenging industry leaders is just like playing chess with a master to increase one's worth. Firstly, it is easy to be recognized as a master, and secondly, in the process of competing with masters You can learn a lot of valuable things and it is easier to become a real master.

TCL, as a company that started out as a wireless communications company, was synonymous with telephones a few years ago. Although it has branched into home appliances including color TVs, air conditioners, etc. in recent years, its recognition for home computers has not been high. It is not as good as Lenovo, Founder, Great Wall and other brands, but now as China's second-largest computer brand after "Lenovo", its rapid growth in the PC industry is a process of constantly challenging Lenovo. The fierce battle between the Pentium 4 and LCD with "Lenovo" in the summer of 2001 quickly established "TCL" as a computer brand in the PC industry.

On the other hand, challenging industry leaders is also a very dangerous thing. It is important to find a good entry point for the challenge, so that a win-win situation can be achieved, otherwise you may face catastrophe.

[Editor] Brand value innovation

[Editor] What is brand value innovation

The so-called brand value innovation means continuous improvement within a certain cost range. On the basis of improving products and services, use new brand value to satisfy customers' pursuit of higher value goals for original products or services. Brand value innovation can be about changing the brand value attributes, or it can be about giving the brand new value attributes (such as developing and extending the depth, breadth and relevance of the existing brand, and expanding the brand into new areas), or it can be about the company's new brand development through brand innovation. business strategy to achieve the management and maintenance of brand value and achieve the purpose of brand value creation and value appreciation.

The reason why companies need to innovate brand value is because they can improve customers' perceived value through brand value innovation. On the one hand, it can reduce customers' sensitivity to costs. Through brand value innovation, it helps customers organize and process relevant brand value information and simplify customer purchasing procedures; it can enhance customer purchasing confidence, improve loyalty, and reduce purchasing risks; it can increase the image value of products and improve customers' psychological and emotional perceived value. Reduce customer cost sensitivity. On the other hand, brand value innovation can create value for enterprises. Through brand value innovation, it can enhance customers' extensive and lasting trust in related products and increase the frequency and types of repeat purchases; it can promote the value overflow of brand reputation and promote the expansion of brand assets; it can establish an effective barrier for competitors to enter.

[Editor] Brand value innovation strategy

1. Improving the differentiated value of the brand

The key to brand value is the competitive advantage of differentiated value. First, there are differences in working performance, durability, reliability, convenience, etc. caused by product quality, performance specifications, packaging, design, style, etc. Quality difference is the core of brand value difference, and technology is the ultimate determinant of all quality. Enterprises must take technology as the guide when innovating brand value. Advanced technology allows companies to develop and introduce new products earlier, and the "first-mover advantage" formed by advanced technology allows companies to form short-term monopolies. For example, Intel's continuous technological innovation in computer memory has created new generations of new memory and created excellent brand value differentiation advantages. The second is the added value of the brand brought by services. First of all, we must ensure the promptness of service time. Customers have many service problems when consuming products. Companies need to be responsive to customers and act quickly, especially when it comes to complaints. Responding quickly to customers and solving customer problems in a timely manner are important guarantees for maintaining customer brand loyalty; secondly, ensuring technical accuracy. Technical accuracy means that when an enterprise provides support services, the measures, strategies and methods adopted must be appropriate, reliable, applicable, and able to completely solve the problem; again, the comprehensiveness of the service must be ensured. When providing services, enterprises must provide full-process and all-round services as promised; and finally, they must ensure that service personnel have sufficient affinity. In the service process, intangible services are made tangible, and the attitudes and enthusiasm of employees will form different personnel values, which is of great significance to customers' value perception and satisfaction. The third is to shape brand association and personality. Brand association can affect customers' purchasing psychology, attitude and purchasing motivation, so the brand can enhance customer perceived value. Brand association is the result of brand connotation shaping and personality strengthening. In order to build the value differentiation advantage of brand association, we must first shape the brand's connotation and strengthen the brand's personality. For example, Haier is associated with high-quality services; Wal-Mart is associated with low prices and so on.

2. Innovation in brand positioning

Position the brand. Brand positioning determines brand characteristics and brand development momentum. Common positionings include: (1) Differential positioning of the brand: brand performance association. For example, the brand is associated with those product features that can bring benefits to customers and thus promote consumption; the association is related to the reliability, durability and service capabilities of the brand; the association includes the effectiveness and efficiency of the service; the association is composed of design and Components such as style; associations related to price and value can help differentiate your brand from competitors. Brand image association. Such as who uses it under what circumstances; the cultural characteristics of the company; business content; product characteristics and even corporate spirit, etc. Insight into consumers’ inner associations. Such as consumer demand diversification and personalization, etc. (2) The competitive positioning of the brand: what reference system the brand is in; how to deal with brand characteristics that are unique to competitors.

For differentiated positioning, the differentiated features must be meaningful, feasible and based on certain interests of customers, need to be pre-emptive and easy to defend but difficult to attack. Finally, in the future product expansion process, the following brand structure will be formed: brand DNA; brand proposition; brand personality; product range; and each product benefit point. After the brand is positioned, it must also have a clear and rich brand identity, and create or maintain things and concepts related to the brand, such as Gome Electrical Appliances, with its blue and red logo; IKEA furniture, with its conspicuous blue and yellow logo; McDonald's, with its red logo Yellow logo and so on. Unlike brand image (the external correlates of the brand), brand identity is suggestive, suggesting what additions or changes are needed to the brand image. Brand identity embodies what the business organization wants the brand to stand for. Everyone involved in the brand work, including the brand team and their collaborators, must both understand the content of the brand identity and care about its development. It may be difficult for a brand to realize its potential, and it may be in a dangerous situation of being attacked by undifferentiated products and price competition. There are too many blind and incomprehensible brands on the market. They like to promote price advantages, enjoy discounts, or flock to TV channels in a haphazard manner. These are typical symptoms of a lack of integrity. Because brand identity is used to drive all brand creation efforts, its content must have depth, breadth, and relevance, not just an advertising slogan or a positioning statement. At the same time, in the process of brand building, it is necessary to consider the brand's reference system, similarities, differences, brand identification, value plan, brand positioning, execution, consistency, brand system (brand coordinates, such as SAIC-GM's Buick, Cadillac, High-end brands such as GL8 are produced in Shanghai; mid-range and low-end cars such as Sail are produced in Shandong; Chevrolet is produced in Guangxi), brand leverage (carry out brand extension and brand cooperation after identification is confirmed), track brand assets, Brand responsibility system, brand investment (sustainable brand development), etc.

3. Grasp the history, present and future

If you want to build a strong brand and innovate the value of the brand, you must first examine the brand history and current truth. Discover major milestones or turning points in brand history, such as company (brand) establishment and expansion, redesign of major packaging or identity systems, communication campaigns, first transformation actions, major negative public relations or quality crises, etc.; for today's brands Take a “snapshot”: Who are the brand’s core consumers? What are the associations with the brand? What can a brand really offer consumers? Whether the brand is in line with trends, etc.; compared with its main competitors, mark the brand's competitive strengths and key differentiating factors from competitors on the "competitive map".

The second is to seize opportunities for brand development. Analyze the industry trends for future brand development (in terms of surface and psychological descriptions of users, access, service methods, use expansion, etc.), such as mobile phones, from male-dominated to gender-neutral, from High-end devices to convenience devices, from sounds to text messages and pictures; in future growth opportunities, it is not only to expand the user base and discover new users, but also to improve functions, increase usage and frequency, and expand product uses. ; Discover and seize brand development opportunities through research on consumer behavior and insights into market trends and fashion.

The last is the future of the brand. Effectively combine the target group, brand proposition, personality and insights to find a differentiated brand platform that can stimulate creativity and find the brand's DNA. A brand's DNA is a shorthand for the essence of the brand. It is concise, distinctive, durable, and attractive. It is a single point, not an advertisement or a slogan. Such as Lux (soap) - beautiful dreams, NIKE - destiny is up to me, Disney - magical imagination, etc.

[Editor] The relationship between brand culture and brand value

1. Find the brand development direction in the bridge between brand culture and brand value

The brand development direction is outstanding It is reflected in the creation of three aspects: brand positioning, brand quality, and brand stereotypes. Clarifying the direction of brand development is to better highlight the interchange relationship between brand culture and brand value.

The establishment of this relationship can be comprehensively reflected through the process of interpreting brand culture and brand value. When starting the brand diagnosis of the color TV brand Guangzhou Digital Lehua, there is such a contradiction, that is, how to make a Can brands in decline and cutthroat competition find a clear direction for development? In the process of deconstructing Leroy's brand culture and value, we found that the CRT-based product structure corresponds to channels in rural and secondary and tertiary markets. The amplified cost-effectiveness is the entire advantage of the Leroy brand. The popularization of TV digital technology innovation has brought market The concept of a better quality life is the three main characteristics of the brand. This ordinary but exquisite color TV life and the popular enjoyment of fashionable digital TV have a direct impact on the development direction of the brand. How to establish itself in the secondary and tertiary markets and become the brand with the most lifestyle and popular technology.

The clear direction of brand development guides the brand to build communication means at a higher level, thereby further enhancing the brand value and brand cultural connotation.

2. Realizing the transfer of connotation in brand culture is the prerequisite for achieving brand image value exchange

That is, fully exploring the brand elements and finding the interest exchange point between brand culture and brand value , thereby achieving the formal unity of the brand's internal genes and external interests.

Under the strategy of successfully entering the international market, TCL immediately embarked on technology development cooperation with TBC, a global research and development institution, and followed international trends in product innovation, which all demonstrated its brand culture. In the process of transformation of its connotation, the brand value of international style has obviously been more comprehensively supported in terms of image;

This has also been achieved in the Guangzhou real estate industry. Guangzhou Poly Real Estate, which has made a good attempt to live a harmonious, natural and comfortable life, has built the core image of harmony in the image of its property Lily Garden, so "letting the beauty of harmony bloom" has become the core benefit. This kind of harmonious shaping, such as planting lilies in large areas and the summit forum of harmonious real estate, not only maintains the continuity and unity of brand output, but also extends the connotation of the brand's core concept improvement to the value transfer in the consumer market.

3. The promotion and extension of brand value by brand culture

TCL’s international image value comes from the support of the brand’s own culture, and the meaning of Lily Garden itself is natural and harmonious Characteristics, through the multi-faceted creation of brand culture to achieve the improvement of brand value, is also a form of transmission to successfully realize the direction of brand development.

In this process of transfer and exchange from culture to image to value, shaping a specific brand culture will also affect the change of brand value and even brand development direction. Mengniu teamed up with 2005 Super Girls, which is actually a classic case in which Mengniu successfully used the background of this specific event to successfully enhance its brand image. The success of Mengniu in transforming Mengniu's brand culture into Mengniu's brand value is due to the young, neutral, and slightly rebellious civilian talent show brought about by super girls, which integrated the culture with youth and fashion, allowing the brand to gain popularity among the younger generation. The brand positioning has been expanded and cultivated in the market, corresponding to the consumption value. Through the introduction of high-quality yogurt products, Zhang Hanyun's slogan "Sour and sweet is me" has realized the transfer of the brand to the consumption value.

Looking back at the brand, everything is about finding integrated value in the consumer market. This consumption value must also be the core content advocated by brand value. This process is also suitable for the process of brand culture and value transfer; not only that, in the process of brand culture and value transfer, factors that need to be considered are the mainstream Discover the unique characteristics of consumer psychology, fashion and positioning groups.

If the essence of culture is thought, it must also have the concept of time period and region. Then what kind of brand thought is suitable for the market, suitable for brand delivery, and relevant to the brand? At this stage, brand delivery content services are suitable. This must be considered comprehensively by examining the overall market situation and competitive environment as well as the brand development itself, in order to form a real value transfer.

[edit]Brand value assessment

[edit]The role of brand value assessment

Brand value assessment can not only quantify the value of a specific brand, but also By comparing the value of various brands, we can intuitively understand the status of famous brand companies, reveal the market position and changes of each brand from certain aspects, and reveal the connotation and rules of brand value.

It also creates a good public opinion and social foundation for enterprises to realize corporate restructuring and expansion with brand as capital. Consumers strengthen their loyalty to certain brands through the influence of brand value. Investors decide their investment direction through the reference of brand value.

[edit] Classification of brand value assessment

The first category is the value assessment related to shareholders’ equity, that is, the value quantification required for changes in the company’s own property rights or expansion of use rights. , this kind of evaluation must be carried out on a case-by-case basis based on the purpose of the evaluation and the evaluation standards and methods promulgated by the state. It is specially designed to serve entrusted enterprises and provides a reference for the lowest price of enterprise transactions.

The second category is the evaluation of the nature of research published in and serving society. That is the value quantification used for brand value comparison. This kind of evaluation must select the same standards, methods, and benchmark dates to conduct a unified group evaluation. It does not serve a specific enterprise, but provides consulting and reference to all sectors of society.

The former emphasizes transactionality, while the latter emphasizes comparability. No matter how many trademarks are evaluated by the former, they are not comparable. The former evaluation is limited by the purpose of the transaction or evaluation, the scale of the transaction to be completed, and the acceptance level of both parties to the transaction, while the comparative evaluation is not affected by any external subjective factors and estimates the intrinsic value entirely based on the objective indicators adopted under the system standards.

[Edit] Brand Value Assessment Procedure

(1) Establish a team of senior managers and analysts from marketing and finance. The overall command can be handed over to a more neutral third party, or professionals outside the company can be entrusted with the responsibility.

(2) Re-examine the methods used by finance and marketing departments to evaluate brand value. It is best to find relevant past literature and refer to international evaluation standards.

(3) An evaluation method oriented by financial and consumer surveys must be adopted. Only after obtaining comprehensive knowledge can the evaluation work proceed smoothly and the task be achieved.

(4) Carry out financial assessment and conduct necessary market research. The results obtained from both must be reasonable and compatible.

(5) Confirm Evaluate the possible methods of branding and find out the differences between each method, so that you can try to calculate the most reasonable and least controversial brand value.

(6) Set marketing activity goals based on the agreed asset value to make your marketing strategy a measurable strategy.

[Edit] The most valuable brand evaluation method

The evaluation formula of the world's most valuable brand can be simply stated (the details are ignored) as:

(Operating profit -Capital × 5%) × intensity multiple

In its formula, operating profit is an important base number.

To determine the value, the determination of the intensity multiple is very important. This multiple generally ranges from 6 to 20 and is estimated by experts based on certain information or impressions. For the same profit of 1 billion U.S. dollars, if the intensity multiple is 6, the brand value is 6 billion U.S. dollars. If the intensity multiple is 20, the brand value is 20 billion U.S. dollars.

As for subtracting a 5%, it is considered that companies without brands can also obtain 5% capital gains. Typically a dollar of gain comes from 60 cents of capital. This is equivalent to approximately 3% of the sales profit coming from the average social profit, so 3% of the sales profit or 5% of the total capital needs to be deducted. That is to say, even if a general product does not have a brand, it will receive 3% sales profit or 5% capital gain.

The evaluation formula of China's most valuable brands can be simply expressed as: P=M+S+D

Where: P is the comprehensive value of the brand; M is the market share of the brand; S is the brand's Value-added profit-making ability; D represents the brand’s development potential