The Power of Brand Value

How much is that value of the piece of paper in your wallet?

You know, the one green and yellow one, made of polymer with slightly rough texture, has the portrait of the first SPB Yang di-Pertuan Agong on it, and has the label ’50 Ringgit Malaysia’ on it? No doubt, it is valuable – be it to purchase a meal, to fill your car up with petrol, or to get some groceries for the next few days. That is the value of a 50 Ringgit note.

What about a brand? What value does it have? It might not have the same currency value as a 50 Ringgit note which can be used to purchase items or service, but it is beyond that. But it seems like it is the ultimate currency sought after by companies, as it spurs demand and create pricing power. So, what is a brand value?

Author and entrepreneur Seth Godin wrote, “a brand’s value is merely the sum total of how much extra people will pay, or how often they choose, the expectations, memories, stories and relationships of one brand over the alternatives.”

Over the past few years, we can see that well-established global brands prove the fact that brands certainly have the power to make or break in the markets. Coca-Cola, Gillette, Nestle, Kellogg’s, McDonald’s and other brands have been around for a very long time and have gained certain brand power to drive growth through brand reputation and relationship with the consumers.

Branding is considered to be a strategy that is driven and managed by the CEO or the organization along with the senior management as well as marketing heads. Over the recent years, we see new concepts of brand value, brand power and brand equity etc. being coined and measured.

According to Forbes’ annual study, Apple emerged on top of The Most Valuable Brands 2017, with a value of USD170 bil. Google and Microsoft came in Second and third place, each respectively having the brand value of USD101.8 bil and USD87 bil.

The study was carried out over 200 Global brands, where Forbes valued the brands on three years of earnings and allocated a percentage of those earnings based on the role brands play in each industry (e.g., high for luxury goods and beverages, low for airlines and oil companies).

From this, we can see that brand value and expenses towards brand building have become an accepted part of the balance sheet. Capitalizing the brand value and the expenses towards meeting the brand promotion are budgeted and accounted for in the balance sheets and in many cases the ROI of a brand is also calculated to reflect the brand value status over time – it has become a marketing strategy.

Marketers have realized the growing power of brands and have begun to nurture the brand image and cultivate brand value through brand ambassadors. Most of the lifestyle and luxury brands globally and locally have well-known actors and sports persons as brand ambassadors. We can see this brands like Mitsubishi Motors Malaysia (MMM), which appointed Malaysian motorsports talent Leona Chin as its ambassador, Baskin-Robbins’ selecting actress Amyra Rosli as its official ambassador and First Pink Lady, as well as Men’s Biore picking actor Sharnaaz Ahmad as brand ambassador. Through these personas, the marketers derive the power to connect with the consumers and build brand loyalty.

Aside from that, brands have their own value. The market leadership and profitability of a certain product or business is realized through the brand value. Growing the brand power and using the brand value as a driver to increase profitability as well as the market calls for expert management of branding. Maintaining the leadership of a brand calls for strategic planning in the long term perspective.

Apple Co-founder, the late Steve Jobs once wrote: “To me, marketing is about values. This is a very complicated world, it’s a very noisy world. And we’re not going to get the chance to get people to remember much about us. No company is. So we have to be really clear on what we want them to know about us.”