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Unformatted text preview: Interbrand 130 FifthAvenue New York, NY 10011 WhatMakes Brands Great !\ (:ha pter fronl Brands all(lllra.n(jing An EconOll1ist Book Tiean that today there is a )foHferation of measure- ~lentapproach,?:> that Jttempt to bridge the T2ditional!y separate =onskj\~r3tlons of finance In a global economy subject to changing market dynamics and heightened competition, the role of brands has never been greater. They serve as a route map for purchasing behavior and, when managed properly, generally accrue significant value to their owners. But how do you evaluate a brand and evaluate what makes it special? This chapter examines what makes brands great, but first it is helpful to briefly review valuation and evaluation approaches. For years, most brand owners relied on marketing-oriented measures such as awareness and esteem. Today they use more innovative and financially driven techniques to better quantify the value that brands represent. These new techniques draw from a mix of traditional business valuation models and economic tools that measure brand performance in terms of monetary quantification, historical benchmarking, competitive asseS$ment and return-on-investment analyses. This has enabled companies to evaluate their brands more rigorously and to establish criteria with which to govern their development in the future. But what is the right answer for evaluating brand performance? Some would argue that financial models in isolation are unreliable, given fluctuations in corporate profitability. Some would contend that marketing measures alone are unsuited to the realities of today's management needs. Others would argue that no single methodology is credible enough to encompass all the dimensions and complexities of a full evaluation of a brand. These different points of view mean that today there is a proliferation of measurement approaches that attempt to bridge the traditionally separate consid-. erations of finance and marketing needed to provide a more holistic view of brand performance. olljec:tM-based Rnandal Tangible Rational Subjective-base Emotive Perceived Personal Coca-Gola American Express BMW IBM Microsoft Nike Pepsi Toyota Colgate-Palmolive Disney FadEx Hewlett-Packard Kellogg's Sony Starbucks Intel Kodak Nokia For the purposes of this chapter, 23 models that assessed the value and benefits of brands were examined (see list at end of this chapter). Some were more financially driven and others employed tradi- tional marketing techniques. Many offered brand rankings based on their methodologies. From those rankings, the brands that repeatedly appear at the top of the different list of rankings (see Table 4.1) were identified in order to determine why they come out on top regardless of the criteria used to rank them....
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- Fall '07