In an environment where brands are so distinctively similar to each other that it is hard to differentiate as which product or service is better. The competition is so extreme that the functional differences have been narrowed to the extent that they are almost invisible. Therefore competitive advantage has gone beyond just satisfying the functional requirements of the customer. Now brands are focusing on the intangible requirements of the customer so that the brand could mean to the customer and they can identify themselves with the brand. These intangibles are the source of value creation for a brand and help a brand to create long term competitive advantage.
But Brand Valuation needs a strategic thinking so as to take the brand from current position to expected one. Many times brands get distracted and start focusing on short term goals like increasing sale and revenue and overlook the bigger picture. In the process of value creation, brand takes the center position while all the strategic planning and process are formed in order to promote the brand. Therefore all other functions like positioning, marketing communications; market etc. will all get impacted since they all will be based on the strategies formulated.
Company's intangible assets play a large part in creation of Brand Valuation. Brand logos and other related elements like tag line; colors etc. differentiate a company and its products from other companies' similar products. Along with logos; company trademark, symbols and trade name also play an important role in creating a separate identity and provide legal protection against any misuse of company name.
Goodwill associated with the brand also adds additional value. This goodwill is created over the year by customers' experience of high quality products and services provided by the company.
It is important to understand that any change in brand valuation will have impact on the brand audience. Brand health will drive profitability, growth and returns. The audience here we are talking about are consumers, suppliers, employees and investors. Therefore enough care and thought process is required for strategizing brand valuation as a small mistake can hamper the interest of multiple sections.