How to measure the world’s brands

Interbrand – Many of you may know this company because they are publishing the “Best Global Brands” chart each year. To all of you who think that they are not doing anything else: They are! But to be honest, I thought the same before I heard the guest lecture from Marije Roodhof. As representative of Interbrand, she conducted a presentation for the third-semester students in the MIIC course and the Master’s course Branding.

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The basics of Interbrand’s work

Interbrand’s offices can be found all over the world, in 26 different countries. Each and every day, their employees are consulting many well-known enterprises, such as P&G, Mercedes-Benz or BMW. Considerably, they are working with respect to a certain belief: That brands have the power to change the world. Accordingly, the way people view brands has been modified in recent decades: What has mainly been associated with a well-designed logo and good corporate identity has now become a business asset and the articulation of the business strategy. Due to the increase in customer research and the start of the data era, brands can assess more information about their customers and started to foster intangible assets rather than solely caring about revenues.

All the more important to establish a strong and remarkable brand! Initially, we discussed which characteristics are composing a good brand. As we noticed, most of these are addressing rather emotional aspects, such as trustworthiness or certain beliefs. In conclusion, brands can appear to be equivalent to good friends. People can relate to them and know what they are standing for. Based on these thoughts, we examined how to create an expressive brand. In order to achieve this goal, three factors are mainly important:

  1. Relevance
  2. Differentiation
  3. Credibility

Relevance implies that the products of a brand need to be of interest for the target group intended to be reached. A relevant company recognizes both the needs and the desires of its customers. Communicating the brand’s advantages may help to convince potential customers of its pertinence. Strongly related to relevance, the need for differentiation challenges firms to evolve varieties and a so-called USP, a unique selling proposition. Last but not least, credibility refers to the promises brands are making. In other words, when people see and buy a brand’s product, they know what they can expect and rely on this assumption.

So far, so good. Arriving in the middle of this lecture, we got to know the importance of brands and which features denote them. However, these insights were just the basis for what was coming next: The explanation of how to measure a brand’s value. Because after all, successful brands are creating value, and if you are able to measure it, you may also be able to manage it more easily.

How the world’s brands are measured by Interbrand

In order to estimate a brand’s value, Interbrand considers three core components:

  1. A financial analysis assessing the economic earnings of a brand’s current and future revenue streams.
  2. The role of the brand, depicting the impact a brand has on the customers’ buying decisions.
  3. The brand strengths, describing how well a brand influences the purchase decision in relation to competitors. This also helps to provide insights about a brand’s ability to create loyalty. In order to conduct the analysis of the brand’s strength, both internal and external factors are investigated.

Implementing and paying attention to these measurements is helpful for manager since the result delivers a common language for understanding the brand and how to create value for it. Moreover, short- and long-term opportunities can be identified and the brand strategy can be adjusted to guide performance.

In my opinion we all learned a lot about brand value and which features need to be considered. Besides, some interesting questions especially concerning the importance and potential development of brands arose during the lecture.

Eventually, we want to thank Mrs. Marije Roodhof for presenting at Karlshochschule and Mr. Bohnenkamp for arranging the interesting guest lecture.

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