Whats the value_of_a_brand_name

548 views

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
548
On SlideShare
0
From Embeds
0
Number of Embeds
16
Actions
Shares
0
Downloads
12
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Whats the value_of_a_brand_name

  1. 1. L2 INNOVATION FORUM 2010 Presented by: Nima Rahnemoon WHAT’S THE VALUE IN BRAND NAME?
  2. 2. Value Dell Laptop 15” $800 Macbook Pro 15” $1200
  3. 3. Value Honda Acura $70,000 Ferrari $250,000
  4. 4. Value Rolex Oyster $10,000 Fake Rolex Oyster $10
  5. 5. Value Conclusion • Having a well-known/respected brand -> selling products at a higher price = higher profit margins • Logically people should attribute value to product quality, styling, service and reliability instead of brand • Brand name value is easy to compute
  6. 6. Value Of Brand Name Coca Cola $4/6 pack RC Cola $2/6 pack
  7. 7. Example Cont. Margins Coca Cola RC Cola Current Revenue $21,962,000 $21,962,000 Operating Margin 15.57% 5.28% Sales/Capital (Turnover Ratio) 1.34 1.34 Return on Capital 20.84% 7.06% Growth rate during period (g) 10.42% 3.53% Cost of Capital during period 7.65% 7.65% Value of firm $79,611,000 $15,371,000 Value of brand name = $29,611,000 – 15,371,000 = $64,240,000
  8. 8. Proposition 1 •Brand is the most sustainable competitive advantage
  9. 9. Proposition 2 •Luck and serendipity are just as important as advertising
  10. 10. Proposition 3 •Brand Value is an Illusion
  11. 11. Proposition 4 •Even Valuable Brand Names Lose Value
  12. 12. Personal Application •Understanding the importance of brand •Making a sustainable company •Not being a smarter consumer
  13. 13. Classroom Application •Fustec •Documents on LMES •Entrepreneurship

×