Brand Concepts

Brand Concepts

Brand ExperienceA brand experience is a brands action perceived by a person. Every interaction between an individual and a tangible or intangible brand artefact can be seen as a brand experience. Such interaction might be the opening of a bottle of lemonade, the visit of a website or branch as well as a glimpse on a billboard in the public space. Those places of interaction are called touchpoints. Hence a brand experience can include one or more of a recipients five senses and cause any kind of response.

In addition to a direct interaction an indirect one such as friends, experts or celebrities sharing their perception of a product or service can be considered as a brand experience as well. A persons perception of brand, her or his brand image, is often determined by a number of brand experiences over a period of time including one or more touchpoints.

TouchpointA touchpoint is a place, artefact or interface where a person experiences a brand.Other definitions:Touchpoint: any place where people come in contact with a brand, including product use, packaging, advertising, editorial, movies, store, environments, company employees, and casual conversation

Brand PlatformThe brand platform allows management to consider the many elements that can influence, and finally delineate, a brands uniqueness, credibility, robustness and longevity. These elements will help establish a brand that is different from competitors, perceived to be of value in the marketplace, and provide a structure for consistent, cost effective messaging to all stakeholders. It also helps brand management make informed decisions, directs creative people to relevant solutions, and employees to represent the brand with all stakeholders.

Brand PlatformCompany:Here we establish the internal aspects of the brand.Its vision, mission, core values, business model, personality, promise to stakeholders, corporate culture and heritage, and the basic brand story.Stakeholders:A statement of who these groups are, their relevance and importance in the brand picture. Define markets and market segments by the most important characteristics. Then identify suppliers, partners, employees, unions, investors, professional advisors and their roles in the success of the brands.Industry: Adescription of the industrys infrastructure, practices, legal/legislative climate, technological trends, barriers to entry.Product category:Defines the specific business category in which you will compete, and defines a desired and unoccupied position in the collective mind of your most important stakeholders within that category.This is the positioning process.

Brand PlatformCompetition:Identification and description of the positioning strategies and SWOT of the major players. Identifies niches in which competitors are most valued and least respected.Differentiators: Describe both strategic and tactical differentiators you plan to exploit, i.e., your value proposition, business model and practices, product/service attributes, product/service delivery, product/service messaging.The brand platform should be built prior to the company becoming a player. But even companies with decades in the trenches can benefit from developing a brand platform. Existing companies have the advantage of knowing competition and markets already. And with limited research and lots of interactivity between marketing, sales, human resources, customer service and executive level participation, the brand platform can usually be completed in two-three months.

BRAND VALUATION METHODSThese can be broadly classified into:

Cost basedIncome basedMarket based

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COST BASED METHODS

Book value

Replacement value

Liquidation value

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1.Book value methodCurrent cost valuationAll assets are taken at current value and summed to arrive at valueThis includes tangible assets, intangible assets, investments, stock, receivables

VALUE = ASSETS - LIABILITIES

2. Replacement value method

Cost of replacing existing business is taken as the value of the business

3. Liquidation value methodValue if company is not a going concernBased on net assets or piecemeal value of net assets

INCOME BASED METHODS

Excess-earnings method:this brand valuation methodology calculates the earnings above the profits required to attract an investor which uses the estimated rate of return based on the current value of the assets employed. These excess earnings are assumed to be attributable to the intellectual property, or brand.Price premium method:this brand valuation method is based on a capitalisation of future profit stream premiums attributable to a business brand above the revenues of a generic business, without a brand.Capitalisation of historic profits method:the brand valuation method is based on the capitalisation of profits earned by the brand.Discounted cash flow method (DCF)Relief from royalty method:this brand valuation method is based on how much the brand owner would have to pay to use its brand if it licensed the brand from a third party. It uses discounted cash flow analysis (DCF) to capitalise future branded cash flows

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Applicability of DCF methodCash flow to equityDiscount rate reflects cost of equity

Cash flow to firmDiscount rate reflects weighted average cost of capital

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LimitationsCompanies in difficultyNegative earningsMay expect to lose money for some time in futurePossibility of bankruptcy

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MARKET BASED METHODAlso known as relative methodAssumption is that other firms in industry are comparable to firm being valuedStandard parameters used like earnings, profit, book valueAdjustments made for variances from standard firms, these can be negative or positive

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MARKET BASED METHODP/E ratios method:the P/E (price to earnings) brand valuation method multiples the brands profits by a multiple derived from similar transactions of profits to price paid based on the value of reported brand values.Turnover multiples method:this brand valuation method multiplies the brands turnover by a multiple derived from similar transactions.

ApplicabilitySimple and easy to useUseful when data of comparable firms and assets are available

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LimitationsEasy to misuseSelection of comparable can be subjectiveErrors in comparable firms get factored into valuation model

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Global brandsGlobal brandsarebrandsthat are recognized throughout much of the world. Companies intending to createglobal brands need to do the following: Identify the relative attractiveness of each market for the brand.Conduct attitude and usage studies in each country considering enteringIdentify the sequence of brand launch by country/region of the worldKnow the category and brand indices in each country in which the brand operatesEstablish a branding scorecard that can be applied country by countryAgree to which decisions are made centrally and which ones are made locally

Challenger brandAchallenger brandis a company or productbrandin an industry that is not the category leader. The term denotes the fact that such companies have to play from a position behind the dominant player or leader in an industry. This makes the process of marketing significant to attracting customers.

Brand Revitalization

Strategy employed when a brand has reached maturity and profits begin to decline; approaches to revitalisation may include one or all of market expansion, product modification or brand repositioning. ORA strategy to recapture lost sources of brand equity and identify and establish new sources of brand equity. This may include product modification or brand repositioning.

Brand Revitalization MeasuresIncreasing Usage.New Markets.Image Change.Brand Enhancement