Local Brand Advisor Chronicles
Brand plays a strategic role in the success of any business. Relative brand values can be of significant in determining the acquisition values. Brands increase consumer willingness to take the risk of buying even premium products if they are convinced that it is from a credible source and they trust the manufacturer. Along with a brand name a logo or symbol also help people to recognize the product. It is for this reason that the brand is often registered. Once registered it becomes the property of the company. The trade mark is a very valuable asset of a company and companies spend valuable resources in legal fights to protect themselves when competitors create confusing symbols and trade marks. To get additional info, Local Brand Advisor
Consumer decision making is made simpler when the consumer is familiar with the brand because the consumer develops confidence and faith in such brands. A good brand name prolongs the life of the product on sale for many years. It will also help the company get a good market share if the company’s brand is well recognized. Further, the company can produce more products under the same name and reduce the time and promotion expenditure in selling the new products.It gives a legal right for the company, making the company beneficiary of all the positive effects and also makes the company responsible for any damages or any negative effects that the brand may have caused.
Brand Valuation and its Importance
It is important that organizations work hard to create strong brands and nurture them carefully. Brands thus created generate revenue for a number years in the form of sales and also have some intangible name associated with them due to the “good will” generated by them in the market. For these reasons, the brands should be valued like any other assets of the company. If the company were to go for sale the price of the shares will naturally be based on the brand image and the value associated with it.
Valuation of the brands helps in accounting in areas like balance sheet reporting, tax planning, licensing and franchising, mergers and acquisitions, investor relations,borrowing and legal protection.
From a marketing perspective brand valuation is useful to determine budget and allocate resources on high priority, track performance and see if the marketing teams are able to value or not and also to examine if the strategies need change.
Brand value increases the credibility of the top management to motivate the line managers within the organization, on the performance of the company and increase their confidence levels and loyalty. It helps to plan the new products and see what extensions should be added especially to make best use of the high value brand names.