The Value of Marketing a Name

An effectively branded name adds real financial value to a company.

In a market where consumers are exposed to thousands of advertising messages a day, penetrating that deluge requires not only persuasive messages but a brand name that distinguishes you from competitors and is easily remembered.



A brand is a name, tag line, slogan, symbol or other information that distinguishes a product, service or company in the marketplace.

Intangible Value

According to the University of Berkeley, intangible assets such as a company name, brand, symbols and slogan portraying quality and proprietary resources have important value.

A brand name can provide a competitive advantage which can deliver more customers and profits.

Value Reduction Example

Some businesses don't recognize the value of a brand name and can damage that name by focusing on short-term profits at the expense of brand equity, according to the University of Berkeley. Others may not consider the impact of actions on brand equity.

According to the Harvard Business Review, in 2007, an internal leaked memo by Starbucks founder Howard Schultz did lessen Starbucks' brand value. The memo stated, "Stores no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store." The exclusivity of the brand was compromised as Starbucks' expansion caused some consumers to perceive the company as a mass retailer.

Challenges

According to the Carlson School, one challenge companies face is the number of brands competing for consumer attention. For example, in supermarkets, there are approximately 30,000 brands competing. The sheer number of brands--even if a consumer is interested only in a few--impact the effectiveness of branding efforts.

Solutions

To penetrate brand clutter, companies have created customer loyalty programs and provide incentives for repeat customer business. For example, airlines have provided frequent flier miles. Some ice cream and sandwich stores give away free food or discounts after a certain number of purchases.

Technology is also being used to help branding. Some companies use interactive computer displays to educate customers about products and services. In other cases, technology is part of the brand. For example, Amazon's website suggests other books based on a consumer's interest.

References

• Harvard Business Review: How Starbucks' Growth Destroyed Brand Value
• University of Berkeley:Managing Brand Equity: Capitalizing on the Value of a Brand Name
• Carlson School: What is the value of a brand?

Resources

• Business Journalis: Building your professional brand resource list