Brand Equity Ehab Dawoud


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3rd Technology Commercialization Conferance Amman
Brand Equity Ehab Dawoud

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Brand Equity Ehab Dawoud

  1. 1. Valuing Brand Equity in the Arab World Abu-Ghazaleh Intellectual Property Ehab W. Dawoud Amman , Jordan Nov. 2007
  2. 2. Contents <ul><li>Defining Brand Equity </li></ul><ul><li>Brand Equity Element </li></ul><ul><li>Arab world Valuable Brands </li></ul><ul><li>When Brand Valuation Is Necessary? </li></ul>
  3. 3. <ul><li>Defining Brand Equity </li></ul>
  4. 4. Defining Brand Equity <ul><li>“ The differential effect of brand knowledge on customer response” </li></ul><ul><li>“ A product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need” </li></ul>
  5. 5. <ul><li>Brand Equity Element </li></ul>
  6. 6. Brand Equity Element <ul><li>Differential </li></ul><ul><li>Brand Knowledge </li></ul><ul><li>Customer Response </li></ul>
  7. 7. Differentiation <ul><li>The most critical element </li></ul><ul><li>Price premium. </li></ul><ul><li>In some instances, differentiation is easy to create . </li></ul><ul><li>whereas in other instances this can be much more challenging (e.g., gasoline and bottled water) </li></ul>
  8. 8. Brand Knowledge <ul><li>Customers should know about the differentiation. </li></ul><ul><li>Customers should be aware of it, </li></ul><ul><li>Customers should appreciate that </li></ul><ul><li>The differentiation is meaningful for them </li></ul>
  9. 9. Customer Response <ul><li>Customers should respond favorably to this differentiation. </li></ul><ul><li>Product loyalty, </li></ul><ul><li>Pay a premium </li></ul>
  10. 10. <ul><li>Valuing Brand Equity </li></ul>
  11. 11. Valuing Brand Equity <ul><li>Value is a function of three primary variables </li></ul><ul><li>Profitability (Level of cash flow ) </li></ul><ul><li>Growth ( Increasing cash flow) </li></ul><ul><li>Risk (Volatility of cash flow) </li></ul>
  12. 12. Valuing Brand Equity (Cont’d.) <ul><li>B rands create </li></ul><ul><li>Preference (the basis for profitability), </li></ul><ul><li>Permission (the basis for growth), </li></ul><ul><li>loyalty (the basis for stable revenues and profits). </li></ul>
  13. 13. Valuing Brand Equity (Cont’d.) <ul><li>What is required is a methodology for quantifying the impact of brands in terms of the profit, growth and risk of the overall business. </li></ul>
  14. 14. Arab world Valuable Brands
  15. 15. Al-Jazeera <ul><li>Voted the world 5th most influential brand. </li></ul><ul><li>Al-Jazeera came just behind </li></ul><ul><li>Apple’s iPod, </li></ul><ul><li>Google, </li></ul><ul><li>IKEA </li></ul><ul><li>Starbucks, </li></ul>
  16. 16. ?????? ( $ Mil) USD 4,156 Al Jazeera USD 2,576 Starbucks USD 7,817 Ikea USD 8,461 Google USD 7,985 Apple
  17. 17. The 100 Top Brands <ul><li>Each brand must derive about a third of its earnings outside its home country. </li></ul><ul><li>Be recognizable outside of its base of customers </li></ul><ul><li>Have publicly available marketing and financial data </li></ul>
  18. 18. <ul><li>When Brand Valuation Is Necessary? </li></ul>
  19. 19. When Brand Valuation Is Necessary? <ul><li>Tables of brand values such as the one in magazines like BusinessWeek and Forbes have helped to raise awareness of the economic significance of brands. </li></ul>
  20. 20. Necessary of Brand Valuation <ul><li>Three situations in which a brand valuation may be necessary or desirable: </li></ul><ul><li>1. It is required for accounting purposes. </li></ul><ul><li>2. It will inform the terms of a prospective transaction. </li></ul><ul><li>3. It will enhance the management of the brand. </li></ul>
  21. 21. Thank you Q & A