One of the most misunderstood aspects of branding is brand architecture. And because it is so misunderstood, many brands are undervalued when they are bought, sold or merged with other brands. Brand architecture defines the relationships different brands have to one another within a business portfolio. The management of these relationships involves a multitude of critical decisions – whether the brands should be sibling brands, whether they should be sub-brands to a master brand, whether or not that master brand should be expected to imbue the sub-brands with a “halo” effect, whether the brands should be distinct business units with their own brand positioning and marketing budgets, etc. Every one of these decisions can have a serious effect on brand valuation. It’s critical that the owners of brand assets understand their brand architecture and manage it in a way that maximizes brand value.
California just entered the “Yellow Tier” which is the least restrictive phase of the pandemic lockdown. If our COVID infections keep dropping as they have been, we’ll soon have an economy that is wide open again. But demand won’t immediately jump to pre-pandemic levels because people will still be cautious. There will still be a lot of unvaccinated people out there and it will be a while before people – especially older people – will be comfortable mixing it up at movies, sporting events or concerts. Still, notwithstanding some parts of the country that are trailing California, and some parts of the world that are still suffering horribly in the emergency, things are finally starting to look up, at least here in the US. But everything will be different in the new economy. There is not a single enterprise that has not changed the way it’s doing business. The market is now more mobile, more digital and more agile. And one thing it won’t tolerate is a stagnant brand.
There are many firms that evaluate the commercial worth of businesses. Senior management turns to these firms for a variety of reasons: partnership disputes, regulatory reporting or establishing fair market value, to name just three. These firms use a variety of tools and formulas to assign monetary value to tangible property like equipment, real estate, inventory and every other thing that a business may own. They also account for the value of intangibles like intellectual property, i.e, copyrights, patents and trademarks. But very few of these firms really specialize in intellectual property valuations. Many underestimate brand value because they don’t completely understand what a brand really is and where its full potential lies. One firm that does specialize in precise evaluations of intellectual property (IP) is San Diego-based Nevium. Brandtalk had the recent pleasure of talking to Brian Buss, co-founder and principal of Nevium, about its unique brand assessment rubric, the Nevium Brand Score Tool. What follows are the salient points of our conversation, lightly edited for length.
You decided you’re done “winging it” with your brand. You’ve opted to do a little research and find out exactly what your market wants of you. And now that you’re clear on that, you’re determined to be exactly what your market needs you to be. So you realigned your business with your market and created all-new touch points guaranteed to resonate with your best customers. OK so when does it pay off? The answer is (of course) it depends. It mostly depends on the size of your market. But other factors come into play as well. How well was the new brand promoted? is one key question. The good news is a new brand is likely to start paying dividends almost immediately. For instance, after a rebrand or a brand refresh, there is often a corresponding upward tick in sales. This can be a subtle little bump or a significant increase. We’ve written on the Eight Benefits of Branding before. So this article will focus not on what the benefits are but when you could expect to enjoy them in full.
In our last post,we showed how the brand is the most valuable asset of any business. Today, we want to take a few short paragraphs to drive that point home. Especially attentive should be private equity investors. Why? Because they are on a constant quest to drive up the market value of the companies in their portfolios. And attention to brand value is one quick and relatively inexpensive way to get significant results. Founders, owners and others may want heed this advice too but it’s PE investors to whom we speak directly. And to them we offer, as a guiding principal, “It’s the brand, stupid.”
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Best Branding Reads
Week of June 7, 2021
4 Ways B2B Marketers Can Successfully Combine Brand And Purpose
An interesting case study from LinkedIn
Branding’s Perfect 10 – Absolute Marketing
Some of the greatest home runs in branding history.
Why Brands Really Matter
Sometimes it’s worth reminding yourself why you drank the KoolAid in the first place.
How Purchase Decisions Are Made
Again, if you think people reason their way to a decision, you’re wrong.
Walk the Talk – How Brands Lead by Example
Two great examples here.
Building Brands For A Commitment-Free Economy
I’m 100 percent behind this idea. I’d subscribe to a transportation service where I take the bus most days but drive a Ferrari once a month.
Market Research for Success, Purpose, and Connection
At least once a day, I’m trying to convince a potential client of this. From now on I’ll just send this article.