SchmidPreissler Strategy Consultants at The Lion's House
D-83703 Gmund am Tegernsee. Represented in Berlin, Istanbul, Mumbai, New York, Shanghai and Tokyo
www.schmidpreissler.de
www.briefletter.de

 

Our philosophy: Successful corporate strategies are market strategies and market strategies are always brand strategies.

 

SchmidPreissler is the avant-garde among strategy consultants. We serve business leaders worldwide.

 

With this site we present our brand equity and performance program in the scope of the
subject-matter 'turn of an era and paradigm shift in brand marketing' as a key to safeguarding
brand marketing investments and expenditures. This program is a new norm.
We regard this program to be a milestone in brand marketing already today.

 

 

 
 

SchmidPreissler Brand Equity+Performance©  Programm

 
 

Issue: 6/2005 

Next Issue: Week 35/2005

 

 

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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Brand Equity and Brand Performance
Christina Schmid-Preissler, SchmidPreissler Strategy Consultants

“Man and brands instead of machines” was one of the results of a panel discussion in regards to the critical factors of success in the 21st century at the world economic summit at the beginning of this year in Davos. Brands are considered the central device for creation of value in businesses today and rightfully so. All the same: Most businesses, if they possess brands, assume that their competitive environment and thus the corporate yield are better than that of businesses which do not use brands. However, accurate details are hardly ever available.

Aside from sales and acquisitions, the monetary value of brands is usually only listed in yearly published brand equity lists. Generally speaking, these rankings have to be viewed with caution.

That these rankings are at best guidelines show the considerations that even the ‘best’ German corporation, Daimler Chrysler, which would, depending on institution, not achieve any brand equity return even with a brand equity of approximately Euro 17.1 billion and 31.9 billion at a net profit of Euro 2.5 billion and an assumed yield of 5.5% of the net asset value. If we use 31.9 billion as a base, the situation becomes even clearer. Then we would even have to assume a negative return.

Similar can be said about the vast majority of the mentioned values. Even though the institutes calculating these values explain their methods of calculation clearly, the results are disputable. For instance, we found at one institute a value difference between DaimlerChrysler and BMW of Euro 22.9 billion (DaimlerChrysler Euro 31.9 billion and BMW Euro 9.0 billion) and at another institute a difference of Euro 4.4 billion (Euro 17.1billion and Euro 12.7 billion). The problem is, that upon brand equity establishment each case has to be considered individually, a profound knowledge of company data, company life, corporate culture, the resources knowledge and intelligence and the corresponding brand performance, position in the market, future outlook, just to name a few important factors, are required in order to come to a realistic brand equity. And this value has to be tradable, meaning it has to be sellable and purchasable. Even if a brand is sold for instance for the quadruple of the market value the question remains if this really corresponds to the brand equity.

In the end it is important to have evidence of the determined value being reflected in the creation of value, meaning a return-on-investment of the brand equity has to be verifiable. Brand equity without verifiable return-on-investment is no value. The consequence being that the brand equity return has to be entered into the calculation just as much as fixed and variable production costs, costs for research and development, investments in assets, marketing and distribution, capital charges and many more.

Since the beginning of this century a global trend for the realignment of brand portfolios has become apparent. In light of the barrage of brands of today the question arises how many brands a business needs, or in other words, how many brands they can afford. The globalization but also the national competition forces us to reevaluate the efficiency of the committed brands. Luxury to support a brand for all layers, for all divisions of a company and for each market segment is in conflict with today’s necessity for higher efficiency and better economy of scales. Most of all consumer goods companies condense and focus the number of their brands.

Worldwide there are a variety of company, product and service brands. So many so, that customers could not possibly remember a whole lot of them and only a few of them can still be heard over the noise in the markets. At the same time an aggressive displacement competition caused through excess capacity in production and sales area, is leading to price wars which diminish profitability or even endanger it.

The sheer number of brands, the cost of managing them and the exhausted retentiveness of consumers are leading to a change in thinking. With the consequence that brand equity and brand equity return cause a totally different situation than what is common today. In many businesses, brand equity is a kind of undisclosed reserve. This should be changed, if it is the case. Brands are not an undisclosed reserve. They are so elementary for the success of today and the future that they have to be managed, supported and protected just as assets would. Just as corporate property values are used are utilized gainfully, brands should be used the same way. Generally, brands should be removed from the general company property and should be established in companies which deal exclusively with brand utilization. The common business purpose of such brand utilization companies is to achieve brand performance; a professional brand utilization which tends to cost-effectiveness and interest return.

With the SchmidPreissler Brand Equity+Performance© Program we created a program where the monetary brand equity can be established in terms of ‘working capital’ and which aims for return-on-investment of the brand equity. We assume that marketing expenditures and investments, including cost of communication is only going to be ensured via return-on-investment of the brand equity.

If you do have questions in regards to this program, please do not hesitate to call Tel. +49/8022/91 78-22 Dipl. Vw. Christina Schmid-Preissler.

 

 

Corporate Strategies

 

Market Strategies

 

Brand Strategies

 

Brand Development

 

Brand Diffusion

 

Brand Leadership

 

Brand Equity + Performance

 

Brand Positioning

 

Brand Protection

 

Brand Rating

 

Brand Rules

 

Brand Net-Added Value

 

Brand Driven Selective Distribution

 

The Waisted Rectangle©- The new picture of the consumer goods markets

 

Global Branding

 

Knowledge Society as Target Group

 

 

Editor: Dipl. Vw. Christina Schmid-Preissler - Assistant Editor: Regina Seago

Copyright © 2005 SchmidPreissler Strategy Consultants. All rights reserved.

© 2005 SchmidPreissler

 

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