One of my clients has sent me the main three brand assessment researches in the market:

The Brand Finance® Global 500 – 2010, carried out by Brand Finance. www.brandfinance.com

 Top 100 Most valuable global brands 2010, carried out by Millward Brown Optimor. www.millwardbrown.com

 Best Global Brands 2009, carried out by Interbrand. www.interbrand.com

He wanted to know what my opinion about the assessment methods these companies use in order to carry out their ranking was and he wanted to see if he could apply those methods to the landmark brand of their company. I do not want to judge which one of the three methods used there was the most reasonable. I prefer to highlight a method which I believe to be easy to apply to all these kinds of activities, although it may not be the most appropriate for him.  It consists of estimating the worth of a company with a brand and the worth of a similar company selling the same kind of products without any brand. This allows us to find out about the current overpricing being paid by clients to that particular brand, together with the current worth of the extra sales volume caused solely by the use of the brand.

So, at first glance, applying this simple method to those brands which came up first in the researches mentioned above, we have:

Google – Apple – Wal-Mart – Microsoft – IBM – Coca Cola – GE – Vodafone – HSBC – HP – Toyota – McDonald’s – Disney – China Mobile – Marlboro

We will immediately realise about the overpricing we are actually paying just because we have bought some of these brands’ products, except for the honourable case of, so far, Google.

All of the above has driven me to the reading –for the second time, of the latest published edition from “The Red Book of Brands” (El libro rojo de las marcas) by Luis Bassat www.lluisbassat.com . This copy is from December 2009 and it has updated some things with regards to the first published issue, from 1999. Despite all of this, it struck me as pretty surprising the fact that, a few years ago, Bassat, president of the WPP Group Iberia (Spain and Portugal) and Member of the Board of Ogilvy Worldwide, foresaw the role that brands were going to play in the development of companies, and he did so just in the heyday of “own brands”. As he stated: “I work with brands as if they were people, since brands are born, grow, reproduce and unfortunately, many die because of bad health”. Brands are created and live in consumers’ minds.

From my experience in the professional services sector, I can say that, creating a powerful brand with qualities related to the service is the best way to differ from your competitors. Consumers are not getting qualified services continuously. By “qualified services” I mean those which sell knowledge to consumers who only buy once, or perhaps twice in their purchasing lifetime. The cost of purchasing that the client has is minimised if we make it easier for them to spot a brand with the qualities he is after, knowing that the changing cost which the clients are going to have will be pretty high, since the purchasing of intangible goods (services) makes the probability to be wrong quite high as well, and this makes loyalty from customers greater than in other sectors.

Likewise, brands help soften what Gary Hamel www.garyhamel.com foresaw for these companies in “Leading the Revolution”. He stated that brands had worked knowledge asymmetries for a long time. These companies know something their clients don’t and overcharge for this knowledge transfer. But this asymmetry is fading out and this is leading to what he calls “market frictions”, as a consequence of the rising and extensive usage of technology and the Internet. The cost of uploading information to the Web is close to nothing and therefore, margins obtained from arbitration in knowledge will steadily go down. The setting up of a powerful brand in this environment reinforces the positioning of a leader and helps a company keeping its main asset: access to unique knowledge. In other words, counting on a certain well-known brand is assuming you have certain knowledge which the market has not left out.

This does not mean that I would not advice clients and friends to eventually use that method which best showed their brand’s worth in comparison with their competitors. A brand without potential clients is not a brand, but an obsolete product, and therefore their worth is null.

Felipe Santiago

www.gesdocument.com

www.ghdhumancapital.com

How much is my brand worth?

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