FEATURE
Six Strategies
By Pete Canalichio
to Grow Brand Value Over the past 100 years consumers have gone from purchasing products from people they know well to purchasing from people who work for companies that they have never met. As consumers have had to make this transition, they have looked to brands to help them decide which products and services they prefer. Due to this “assumed” role, the growth of brand value has become increasingly important for a brand’s lifecycle. This has made brand value growth a necessity for all companies which own a brand, or which are in the process of building one. Growing your brand’s value can help drive revenue growth through higher consumer demand, improve gross margin by commanding a premium on prices, and reduce business costs through improved supplier agreements. One method of valuing a brand is to take the market value of a company (total shares of stock outstanding multiplied by the company stock price) and subtract the value of its
assets (found on the balance sheet). Using this methodology, Coca-Cola ranks as one of the world’s most valuable brands. Consumers choose Coca-Cola billions of times per day because of its authenticity, refreshment, originality, consistency, and taste. The more The Coca-Cola Company can improve consumer demand for its brands, the more consumers will consume their products. For Coca-Cola, more consumption translates into more revenue and more profit. Navigating how to grow your brand’s value can be a daunting task. So, to help start you on the path of brand value growth, here are my six strategies: 1. Improve your understanding of what a brand means. Take my first example; there are a variety of reasons why people choose to drink Coke. Many people drink Coke or wear Coke shoes because of the way they are perceived by oth-
ers when drinking it. It offers a certain “coolness” factor. Others drink Coke because they know they will gain social acceptance. Some drink Coke for the increase in energy it gives them. Still, others drink Coke for its refreshment and great taste. By keeping abreast of how consumers perceive their brands, Coke continuously meets their consumers’ expectations. This enables the Coca-Cola brand to maintain tremendous brand value. 2. Innovate your products to meet your consumers’ unknown needs. When Nintendo launched the Wii, they revolutionized the way people play video games. Nintendo created a product consumers hadn’t even dreamt of playing. In doing so, Nintendo not only delighted avid video game players, but they also converted millions who never played video games into Wii players. With games like Wii Sports and Wii Fit that enhance both skills and fitness, Nintendo eliminated the inactive aspect of video games – one of its biggest negative perceptions – and, in turn, permitted consumers hours of guiltless entertainment. Talk about a brand value builder! 3. Stay solution focused. Product engineers and marketers are notori-
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TOTAL BRAND LICENSING