Defining value of a Brand.

What is Branding?

We frequently refer to ‘brand’ as something as a symbol, name or any design. But is it the symbol or a name which creates a brand? The idea of a brand is to allow your customers and client to know what to expect from your business. It can often be hard to determine what a brand is worth and why it is important.

For developing brand and estimating the value of your business, brand value is an essential tool. There are different ways to approach the valuation of brand and it defers on the basis of your business, industry and situation.

A brand is a voice and a product is a souvenir.

Any organization is made up of tangible and intangible assets. Things like land, machinery and inventory are included in tangible assets whereas intangible assets are like tradename, trademark which is referred as intellectual property. The value of a business is forward-looking exercise, where the value of the asset today is equal to the present value of the asset’s cash flows in the future. In simple ‘cash flows’ are typically sales.

Why is branding important?

Instead of above approach, we believe a better way to track a brand’s value is to value the costumers and if it’s not done properly than it could create a problem in the future for any organization. Let’s look at the big brands which are out there to understand the statement. iPhone aren’t the most advanced phone out.

They’re known as a status symbol. Starbucks isn’t the best coffee out there; they’re known to make you happy. Tata isn’t making anybody’s dream car; they’re known as safe and reliable. What does all these brands have in common? They are selling values to their consumers instead of products.

Revenue based valuation

We often think that the more our product will be sold, the more it’ll expand our business and we try every possible way to increase it. If you’re a service provider there’s need of more professionals who can create more opportunities for business, sometimes we have to bring 2-4 more machineries to increase the productivity which is somewhat necessary to achieve key milestones and helps in expanding the business.

But what we forget is these things are helping in today’s marketplace and we have to work every day to maintain the cash flow. You can use this method of brand valuation if you have just launched or if you're going through the process of re-developing your brand.

Creating a meaningful value for a Business

There are few aspects through which we can achieve the key branding goals for any business. Those aspects vary upon the audience as per the type of business’ service/product. For any kind of organization or business it is important to understand the market’s behavior. Consumers regularly pay more for branded products as compared to store brands, and they will pay even more for a premium brand as compared to a mass-market brand, which is based on audience’ perception.

Through lucrative designing we can do amplification of any business’ image by enriching user experience. One can create meaningful and effective campaigns to reduce the defection rate, by breaking down to the market and consumers’ insights which will help in identifying the brands’ gaining value versus the brands’ losing its value.

As a successful brand you are delivering fulfilment but one also needs to look at the rate at which the brand is gaining new consumers and calculate a valuation for the future customers. Once current and future customers are valued, it’ll provide a value of a brand.