ToUnderstand the Value Creation of Brand Valuation ROI of both Tangible andIntangibles.
In today's competitive market, where businesses are fighting for survival, creating a unique brand identity has become essential. A brand is much more than just a logo or a name. It is the embodiment of a company's reputation, its history, and its promise to its customers. However, how do you know how much your brand is worth? This is where brand valuation comes in, which is the process of determining the monetary value of a brand.
There are many reasons why a company would want to know the value of its brand. It could be to measure the effectiveness of marketing campaigns, assess the impact of a merger or acquisition, understand the value of licensing or franchising opportunities, or report the value of intangible assets to stakeholders. Knowing the value of a brand can also help companies to make better-informed decisions, such as whether to invest in a new product or service or to expand into new markets.
But how do you measure the value of a brand? In the past, brand valuation was typically done by financial experts and accountants, who looked at factors such as revenue, profit, and market share. However, in recent years, the approach has become more sophisticated and has moved across the full spectrum of brand marketing management.
Today, brand valuation is seen more as a tool to manage marketing ROI, management KPIs, and the entire branding process. It is no longer the domain of the financial experts and accountants alone. It is an activity that involves the brand marketing management team, who can provide valuable insights into the brand's value and how it can be increased.
To measure the ROI of brand and marketing initiatives, it is essential to have a robust ROI measure. ROI is the gain from the investment, and when you divide the cost of investment and divide that by the cost of investment, you get a number that is the ROI. So, when the CFO has a hundred dollars to spend on a particular initiative, they are toying in their mind, who should they give it to? Should they give it to the manufacturing guy, the marketing guy, set up a new business, or a new geography? Where should they be investing this hundred dollars to get the largest ROI?
The key challenge that marketing teams face is converting their efforts and initiatives into a dollar outcome. The majority of marketers or brand owners do not have a robust ROI for their marketing initiatives. This lack of robust ROI can result in marketing budgets being cut as the CFO cannot convert the efforts and initiatives into a dollar outcome.
The solution to this challenge is to create tangible ROIs that the company has regarding sales and profits. Advertising, sponsorship, and other areas such as Corporate Social Investment (CSI) initiatives are all activities and initiatives that companies can undertake to generate tangible ROIs. By tracking these ROIs, the company can assess the impact of its branding efforts and make better-informed decisions.
The value of a brand is not just the sum of its tangible assets; it is also the sum of its intangible assets, such as brand reputation, brand equity, brand loyalty, and brand awareness. To understand the value of a brand, it is essential to look beyond just the financials and to consider the brand's emotional and cultural value.
In conclusion, brand valuation is an essential tool for businesses to understand the value of their brand. A robust ROI measure is necessary to ensure that marketing efforts and initiatives generate tangible ROI in terms ofsales and profits. By creating tangible ROIs, businesses can make better-informed decisions, understand the impact of their branding efforts, and assess the value of intangible assets such as brand equity, brand loyalty, and brand awareness. Brand valuation is not just a domain of financial experts
