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Branding
Foto: Renate Altenhofer
Foto: Kellogg Graduate School of Management
Bobby J. Calder
is the Kellstadt Professor of Marketing at the
Kellogg Graduate School of Management,
Northwestern University, Evanston, IL USA.
Intangible assets are now the
key to economic growth and increasing
corporate value. Unfortunately,
as with intangible assets
generally, it has historically been
very difficult assign a value to
brands. Everyone recognizes that
brands are important. It is just
that in the past we have had great
difficulty in measuring the value
of a brand. There has been little
success in developing standards
for brand value.
The reason for this is that standards
for intangible assets are in
general difficult to develop and
they are particularly difficult for
brands because of the very nature
of a brand. On the face of it everyone
knows what a brand is and
would recognize the American
Marketing Associations definition
of a brand as a “Name, term, design,
symbol, or any other feature
that identifies one seller’s good or
service as distinct from those of
other sellers.”
This definition is good, so far
as it goes, but it does not go far
enough, for brands are really not
things. Brands exist in the minds
of customers. Names, symbols and
the like are just ways of referring
to brands, ideally in a way that
itself influences how consumers
think about the brand. The brand,
however, is the ultimate meaning,
or the idea, of the product in the
consumer’s head. It is how the
consumer thinks about the product,
what he or she believes to be
true about it.
These beliefs can be functional
in that they concern what the product
does or how well it does something.
Beliefs can also be emotional,
how the brand makes the
consumer feel. They can also be
beliefs about what kind of person
you are if you buy the brand. The
brand can become linked to the
consumer’s very concept of self.
A brand is thus subjective, not
objective. The key point to realize
is that it is the consumer who
owns the brand. The brand exists
in their subjective world.
Although brands are created
by tangible investments in advertising
and other marketing activities,
the resulting brand is the idea
or meaning that is created in the
consumer’s mind. It is an intangible
asset. Beyond this, and unlike
software or patents, a brand
only exists as a subjective state in
the consumer mind. From a company’s
point of view, the question
becomes, how do you assess
the value of a brand when brands
are so intangible as to be essentially
subjective. A standard must
necessarily set a monetary valuation
for something that exists in
the consumer’s head.
To do this we have to first
evaluate the strength of the brand.
A standard must specify the
different kinds of indicators of
brand strength that can be used to
evaluate the power of the brand >>
The European Business and Investment Magazine iconannual 91