Accountants and Business Advisers
In today's economy, chances are that one of the most valuable business assets you have is your brand.
Your brand differentiates your business from your competitors, helps to retain customers and is crucial in building new customers. No other intangible asset has such a linear link between the market your business operates in, and the revenue the business generates. Accordingly, it is increasingly important to measure and track your brand value, particularly in relation to your competitors.
Your brand and your business
A market orientated business - one that is responsive to consumer needs and demands, and responsive to competitive activity - depends on its customers generating revenue through volume purchases at profitable prices. Therefore, brand value is dependent upon the timing of a company's development.
Brand value is influenced by a range of factors, including advertising, word of mouth, personal consumer experience, direct selling, and promotions. Financially, brand value is a variable that the company depends on to make its superior profits. So, a strong brand secures a business' customer base by creating and reinforcing functional and emotional barriers to the competition, and by encouraging loyalty in current customers.
By understanding and developing the value of its brand, a business can more effectively engage its customer base. In turn, the owners and managers can introduce strategies that drive brand loyalty and continue to fuel business growth.
When it comes to the role that a brand can play in developing market share and inevitably the financial performance of the company, understanding a brand's value allows for transparent comparisons with your competition.
Ultimately, knowing the financial performance of a brand will assist in determining earnings estimates, help with setting marketing budgets and strategies, resource allocation and internal communication. Aside from business strategy, other reasons you should understand the value of a company's brand include:
Brand is a major driver of corporate value, and investors and business leaders have recognised this fact. Financial managers and planners are increasingly using brand value models to facilitate business planning. Investors also want greater disclosure of brand values and marketing performance to understand individual brands and improve the future performance and value of companies in which they are investing.
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