Posted in Marketing and Strategy Terms, Total Reads: 1327
Definition: Brand Value
The net present value or the future value of the cash flows that are attributable to the brand name or brand personality is known as brand value. A brand is an intangible asset of a business, and helps in differentiating between a company’s book value and market value. The difference is mostly attributable to the ‘brand’. Brand value is also known as brand equity.
There are a number of measures to measure brand value or brand equity. Some of them are as follows:
- In a consumer goods industry, number of repeat purchases, customer loyalty towards paying a premium for their products serve as good measures.
- In other general industries, another measure of brand loyalty from an employment perspective is the number of people willing to associate with the brand/ company at the same or lower salary.
Brand value depends a lot on the inherent characteristics of the product that make up the brand.
In USA, there was a huge uproar when Coca-cola introduced the New Coke in 1985. People staged a huge protest, because the company had meddled with the taste of the beverage. This was a sign of the brand value of the product, and its inherent characteristics. The reaction forced Coca-cola to reintroduce original Coke named Coca-Cola Classic.