Hiring an
expert in brand valuation is an expensive business, probably too
expensive unless you are a big brand with a special need. However,
it doesn't cost anything to look at a brand valuation model and
reflect on the implications for your brand.
|
The Interbrand
model of brand strength - part of their valuation methodology -
is a useful framework to consider the performance of your own brand.
Reflect on these seven points and you should get a better sense
of the strength of your own brand, as well as some ideas on how
to move forward.
|
The seven
components of brand strength in the Interbrand valuation model
are:
|
Market:
10% of brand strength. Brands in markets where consumer preferences
are more enduring would score higher. So for example, a food brand
or detergent brand would score higher than a perfume or clothing
brand, because these latter categories are more susceptible to
the swings of consumer preference.
|
| Stability: 15% of brand strength.
Long established brands in any market would normally score higher,
because of the depth of loyalty they command. So for example: Rolls
Royce would score higher than Lexus. |
Leadership:
25% of brand strength. A market leader is more valuable: being
a dominant force and having strong market share matters. So for
example on this score it is likely that the Coca-Cola brand would
out-perform Pepsi on a global basis.
|
Profit trend:
10% of brand strength. The long-term profit trend of the brand
is an important measure of its ability to remain contemporary and
relevant to consumers, according to Interbrand.
|
Support: 10% of brand strength.
Brands which receive consistent investment and focused support usually
have a much stronger franchise, but the quality of this support is
as important as the quantity. |
Geographic spread: 25% of brand
strength. Brands that have proven international acceptance and appeal
are inherently stronger than regional brands or national brands,
as they are less susceptible to competitive attack and therefore
are more stable assets. |
Protection: 5% of brand strength.
Securing full protection for the brand under international trademark
and copyright law is the final component of brand strength in the
Interbrand model. |
This model is not perfect, for
example several of the components have a built in preference for
older brands and so may not give adequate recognition to the value
of newer brands such as Amazon or Starbucks. |
| |