value creation through brand building


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value creation through brand building

  1. 1. Value creation through brand building Presented by- Nupur agrawal According to Kapfefer (2001), “a product gives a certain efficacy while a brand gives more trust.”
  2. 2. CONTENT- Terms; Process of value creation-  business model;  brand equity; How the brand creates Value for shareholders; How the brand creates value for customers; Top ten brands of the world because of their high brand value; Conclusion.
  3. 3. Meaning of terms  Value- what the buyers are willing to pay for?  Brand-A brand is the identity of a specific product, service, or business  A brand is a promise of the seller to deliver a specific sets of benefits or attributes or services to the buyer. brand building- “efforts to gain consumer confidence in brand “  The establishment and improvement of a brand's identity, including giving the brand a set of values that the consumer wants, recognizes, identifies with, and trusts.
  4. 4. The Two Determinants of Value Creation Business model VALUATION MULTIPLE Brand equity Brand equity- The value inherent in a well-known brand name. EX-WILLS FILTER CIGARATTES LUX
  5. 5. Business model Value proposition Market segment Value chain structure Revenue generation and margins Position in value network Competitive strategy
  6. 6. Value chain
  7. 7. What needs to be true for a 100% global brand? Homogeneous needs world wide Common usage Common, unique features and benefits Same value equation Common heritage and roots Common brand value Common visual identity
  8. 8. Benefits of global brand strategy R & D efficiency –product and engineering Capital utilization Input costs Crisis management supply Management over head Agency and design cost Brand assets Experience-interdependence Market level operational focus on excellence of execution
  9. 9. Values developed in the process of brand building include psychological, physical, and functional properties that consumers desire and should always identify a property that is unique to that brand.
  10. 10. Value creation for Shareholders Price premium-High prices can be there with well known brands. Brand loyalty
  11. 11. Firms that establish a successful brand can extend the brand by adding new products under the same “family” brand. Such branding may allow companies to introduce new products more easily since the brand is already recognized within the market. Strong brands can lead to financial advantages through the concept of Brand Equity in which the brand itself becomes valuable. Such gains can be realized through the out-right sale of a brand or through licensing arrangements If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trade marks, and I would fare better than you." — John Stuart, Chairman of Quaker (ca. 1900)
  12. 12. Customer recognition- Brands provide multiple sensory stimuli to enhance customer recognition. The Volkswagen bus ad, talked only about ‘plenty of room’ The Volkswagen bus ad, talked only about ‘plenty of room’ Value creation for Customer
  13. 13. Perception of the customer Well-developed and promoted brands make product positioning efforts more effective. The result is that upon exposure to a brand (e.g., hearing it, seeing it) customers conjure up mental images or feelings of the benefits they receive from using that brand. This “benefit = brand” association provides a significant advantage for the brand that the customer associates with the benefit sought
  14. 14. Growing importance of intangible assets (BRAND)
  15. 15. Comparison of companies having brand value and don’t having it
  16. 16. Brand name Brand value (2011) Brand value(2010) Rank (2010) Rank (2011) $44,291 Billions $36,191 Billions 2 1 $42,805 Billions $33,605 Billions 5 2 $36,220 Billions $41,365 Billions 1 3 $36,157 Billions $33,706 Billions 4 4 $30,674 Billions $28,995 Billions 7 5 $30,619 Billions $26,047 Billions 12 6 $30,504 Billions $31,909 Billions 6 7 $29,543 Billions $19,829 Billions 20 8 $28,944 Billion $21,916 Billions 15 9 $28,884 Billions $26,585 Billions 11 10
  17. 17. “If Coca Cola lost everything except for ‘the formula’ and its brand name , it could walk into any bank in the world and get $100 billion loan to start from the scratch” Fortune Magazine Brands add value to the product, which helps it differentiate itself from competition
  18. 18. THANKS