The brand is an intangible asset. Following the site Investopedia: “An intangible asset is an asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today’s marketplace.” Simply saying —Brand adds value to your business.
S&P 500 index showed that “over a 30-year period between 1975 and 2003, the overall corporate value of intangible assets increased from 17% to 80%.” A study by Interbrand in association with JP Morgan concluded that on an average, brands account for more than one-third of shareholder value.
Does that mean that the value of most businesses comes from intangible assets? If so, then brand must be the most evident of these assets.
Check this table based on information from Businessweek, Interbrand, JP Morgan league table –
You may say, that your business is not big enough, or you are not going to sell it. But here is food for thought. Why is that brand adds so much value to the cost of the company? Do you think they just pay for logo and couple of font/colour combinations? Hell, no. This additional price is given by recognition, trust and love of the customers, in fact, millions of buyers.
A bit of history by Wiki:
“During the 1970s, American cola giant Coca-Cola abandoned operations in India rather than accepting a forced sale of 60% of their equity to an Indian company. Following this, the Parle brothers, Ramesh Chauhan and Prakash Chauhan, along with then-CEO Bhanu Vakil, launched “Thums Up” as their flagship drink, adding to their portfolio of older brands “Limca” (lime flavour) and “Gold Spot” (orange flavour).
In 1993, “Coca-Cola” re-entered India after a prolonged absence, spurring a three-way “Cola War” with “Thums Up” and “Pepsi”. That same year, Parle sold out to Coke for the US $60,000,000. Some assumed Parle had lost the appetite for a fight against the two largest cola brands; others surmised that the international brands’ seemingly endless cash reserves overwhelmed Parle. Thums Up had an 85% market share when sold.”
Even today majority of Indians would prefer to refresh themselves with “Thums Up” (well, it’s marginally less sweet than Coke, so there is no difference in the product). Guess it’s called customer’s love 🙂
Check all 5 reasons to have a better brand:
No. 1 “Branding helps you create a unique impression and gives you a chance to be memorable.”
No. 2 “The brand is in sharing the values and attracting like-minded people to your products and services.”
No. 3 “Good brand motivates your team and customers”
No. 4 “Branding helps you advertise effectively &creates a connection between the product and the customer.”
No. 5 “Brand adds value to your business”