Brand basics.

What does brand mean?  Put simply, it means name.  So product brand = product name.  Company brand = company name.

Of course, it’s not quite that simple.  Brands can also encompass logos, taglines, jingles, soundbites and much more.

Are brands worth money?

Companies usually own assets.  Assets are things that are worth money.  For example:  The company vehicles, the computers the staff use, or the buildings and land the company owns.

These kind of assets are fairly easily valued.  People know approximately how much a second hand computer is worth for example, or how much a building might sell for.

However, brands are called intangible assets.  This is because, much like the software in computers, you can’t actually physically touch them.    Also, unlike a building or a computer, brands have usually started out from nothing.

A building or computer had a set cost when it was bought, and the present value can fairly easily be calculated from the going market rate and other factors, like depreciation.  A brand though, has usually been built up over time, from when the company started, or the product was launched.

There are other things to consider too though.  How much has the company spent promoting the brand? How popular is it?  Does it have a good image?  Companies that have had some image problems may suffer from bad feeling from their customers and general public.  BP, for example, isn’t well liked just now!

Despite these difficulties working out a value, some brand names are obviously worth more than others:

Do you recognise this brand?  Of course you do! But why?  Well, because Coca Cola (also the company brand) has spent millions on advertising and promotion over the years, and because it’s a very popular drink!

Tags: Brand basics