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SchmidPreissler Brand Equity+Performance©  Programm

 
 

Issue: 04/200

Next Issue: Week 18/2007

 

 

Excerpt of further issues topics: Brand Equity and Brand Strategy, Brand Equity and Brand Diffusion, Brand Equity and Company Success, Brand Equity and Sales and Acquisition of Brands or Companies, Brand Equity and Marketing Investment

 

 

 

 

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Brands Possess A Monetary Value
Franz M. Schmid-Preissler

The patent statistics for Germany published last week by the „Deutsche Marken- and Patentamt (DPMA)“ for the year 2006 show, that Germany is continuing as the country of inventors and discoverers: With approximately 80,000 trademark registrations they reached again the record of the year 2005. However, there is no doubt about it, that a trademark registrations does not automatically make for a brand. A British marketing expert got to the point by saying: “A product is something that is made in a factory, a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be outdated, a successful brand is timeless.”

Aside from the 7-elements according to SchmidPreissler, which define a brand and distinguish it from a mere word or name (origin, history, image, profile, positioning, awareness and protection), there are two criteria which are a requirement for today’s brand leadership.

Brands do not belong to marketing, they are the boss’s business

Management is responsible for the strategically most important value driver of the company. Part of this is the brand, respectively the quantitative and qualitative equity which has been created through this brand. In leading companies of all industries (not just consumer goods industry) the brand is the boss’s business.

Staff members are brand carriers

Brands can only be represented successfully by staff members, if the values of the brand are credibly exemplified in day-to-day business. Consequently, businesses have to enable their staff members to embody this brand persona.

However, this does not call for blind empathy and submission. Rather, this means that is imperative for a company to find the right employees, assure that they know their exact function and that they feel supported and compensated accordingly for the performance of their task. Meaning, if a company wants to be successful with a modern pioneer product, then this modern pioneering spirit has to permeate this company during recruitment of suitable staff members via fitting operating structures and processes, internal communication and training all the way to compensation (corporate culture as brand culture). Companies shape the style of brands. Brand cerebration has to permeate everything that concerns staff members.

Brands need to be viewed as a monetary value

The matter of fact that more and more companies recognize the drastically decreasing possibilities of differentiation of products and services lead to a displacement of product-oriented marketing, is putting the monetary brand equity more and more into the center of thinking of the persons in charge at businesses.

There have been enough examples already of how much brand equity and thus corporate equity has been destroyed through incorrect brand decisions.

However, the tide is turning. Up till now it was often considered ‘chic’ to simply cancel well-situated brands out or introduce new ones, instead of continuously adjusting them to the spirit of age. These ventures often failed despite massive communications investments – just think of Bank 24 - now many businesses are remembering brand equity that has been created decades ago.

The true value that is represented by brand equity can only be seen, if the value of this brand is known in Euro and Cent and if working with these brands has been set up in a way that their value achieves adequate return-on-investment, basically achieves performance.
The knowledge of turnover and operating marging – as a whole or according to product and brand – is no longer enough to secure investments and expenditures for brands in the future and to lead them successfully. A paradigm shift is required. So far, the success of brands has been solely measured in regards to turnover and profit. In the future, brand equity and return-on-investment have to be included in the calculations of brand leadership in regards to the marketing process.
The monetary value of brands is usually only mentioned in the yearly published brand ranking lists or during the sale or acquisition of a business. And on these yearly published brand ranking lists the brand equity often diverges greatly from one another, depending on whoever the source.
Experience has shown that a well developed and managed brand, whose monetary equity has been calculated, represents a value for its company that secures long-term profitability.

It is thus imperative at any time to keep a close watch of the monetary value of the brand.

 

 

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