Wednesday, November 12, 2008

What’s this brand worth anyway?

As early as 1914, people were attaching dollar valuations on brands. Today CEOs, CFOs, employees and investors all want to know exactly how much their brand is worth in cold, hard cash. Any CPA can tally the value of the company’s tangible assets (buildings, plants, machinery, vehicles). But a brand’s real worth is deep and intangible. It’s the reputation, trust, good will and emotional attachment customers feel toward the brand, multiplied by the predicted length of the brand’s future. (That last calculation is the tricky part).

That Ham Ain’t Just a Ham.
The value of a pre-cooked ham changed when a BBDO copywriter came up with a strategy to brand the ham as so consistently tender and delicious that each one would be numbered and certified. That’s how Cure 81® Ham from Hormel® was born. A brand so successful it changed the way Americans thought about ham–and how the Hormel employees and investors felt about their company.

I’LL DRINK TO THAT! In 1988 Grand Metropolitian PLC poured a bit of money into an under-rated vodka. It’s paid off. By 2003 the worth of the Smirnoff® brand had swollen to $2.72 billion.

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