Brand as an Asset

Defining Brand as an Asset

• A brand as an asset refers to the measurable worth of a brand in economic terms. It is the potential value that a brand name holds for a company.
• The brand’s worth or value is based on the economic advantage it offers over its competitors due to consumer perception and recognition.
• In simple terms, if the brand was to be sold, the amount it could be sold for would be the brand’s asset value.

The Value of Brand as an Asset

• The value of a brand is often built over time through effective branding strategies and efforts that develop brand recognition, reputation, and loyalty.
• A powerful brand as an asset can often drive customer choice, enhance reputation, create customer loyalty, and can be used to charge a premium for products or services.
• It is important to note that brand value can both increase and decrease over time. If the brand reputation deteriorates, the brand’s asset value can also decrease.

Measuring Brand as an Asset

• Brand value can be difficult to measure precisely. It involves estimating the financial impact of brand-related factors such as brand recognition, customer loyalty, and brand reputation.
• Methods used to estimate brand value include the cost approach (how much it would cost to build a similar brand), the market approach (how much the brand could be sold for), and the income approach (the projected revenue from the brand).
• Brand value can also be reflected in share price for listed companies. Higher brand value often correlates with higher share prices.

Managing Brand as an Asset

• Brands are not just logos, names or symbols; they are valuable assets that need strategic management to increase their value over time.
• Brand portfolio management is the analysis and management of all the brands owned by a particular company to maximise their collective value.
• It is crucial to protect the brand against negative public relations, infringement, or misuse that could devalue the brand or negatively impact the company’s reputation.
• Mismanagement of the brand can result in decreased brand value, loss of customer loyalty and overall business impact.